Resolution Supporting Equal Tax Treatment for All Vehicles


The resolution calls for equalizing the tax treatment of different types of vehicles by supporting the end of the $7,500 federal tax credit for electric vehicles and for adding vehicle registration fees for electric vehicles. Since drivers of electric vehicles do not purchase gasoline, they do not pay federal gasoline taxes which go into the Highway Trust Fund that pays for federal road maintenance. Under existing law, buyers of electric can get up to $7,500 in tax credits for the purchase of qualifying electric vehicles.

Resolution Supporting Equal Tax Treatment for All Vehicles

WHEREAS, the federal government currently offers a tax credit of $7,500 each for certain types of
vehicles up to a threshold of 200,000 per automobile manufacturer; and

WHEREAS, tax credits for politically favored companies or products distort markets and encourage additional lobbying for government favors; and

WHEREAS, tax credits for politically favored companies or products contradict the basic core principles of limited government and free markets; and

WHEREAS, an important principle of sound tax policy is “economic neutrality,” whereby the “purpose of the tax system is to raise needed revenue for core functions of government” and should “exert minimal impact on the spending and decisions of individuals and businesses;” and

WHEREAS, most funding for road construction and maintenance is derived from taxes on gasoline and other liquid fuels; and

WHEREAS, certain vehicles, due to their fuel or propulsion systems, use little or no liquid fuels and therefore do not contribute to the tax revenue used for road construction and maintenance; and

WHEREAS, many non-liquid fuel vehicles are heavier than comparably sized liquid-fueled vehicles, largely due to the onboard battery packs, and thus cause more wear and tear on road infrastructure; and

WHEREAS, the elimination of special-interest tax credits for vehicles, and the establishment of a system under which the owners and operators of all vehicles using public roads share in the cost of construction and maintenance for those roads, do comply with and reflect principles of “economic neutrality,” and “equity and fairness,” principles of taxation;

THEREFORE, BE IT RESOLVED that as a part of revenue-neutral tax reform {state} specifically supports efforts to eliminate federal tax credits for new qualified plug-in electric drive motor vehicles and the creation of an alternative fuel vehicle user fee whose revenue can be used to support highway construction and maintenance.