If you purchased an electric vehicle, that doesn’t mean you get to bypass road taxes.
Dozens of states have implemented taxes and registration fees targeting EV owners. That way, commuters can contribute what some lawmakers see as their “fair share” of highway funding, which is often collected via gas (motor fuel) taxes.
The latest addition to that list is Hawaii, which just launched its new state road usage charge program on July 1 for light-duty passenger electric vehicles.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Eligible EV owners in the Aloha State can opt to pay a state per-mile road usage charge of $8 per 1,000 miles, which is capped at $50 per year, or pay a flat annual state road user charge (RUC) of $50.
Both of these options replace the state’s current $50 EV registration surcharge, according to Hawaii’s Department of Transportation. By 2028, the state-per-mile RUC will become mandatory for EVs, and by 2033, it should include all light-duty vehicles.
“Instead of paying based on what type of car you drive — or can afford — a road usage charge means vehicle owners will pay only for how much they actually drive,” said Ed Sniffen, Hawaii’s Department of Transportation (DOT) Director.
While opting for an electric vehicle may come with higher annual fees or taxes, getting a federal EV tax credit worth up to $7,500 was a popular incentive.
Here’s the problem: The federal tax credit for clean vehicles is likely going away under President Donald Trump’s so-called “big beautiful bill” which Republicans aim to pass by the Fourth of July.
Read on to see if switching to an electric vehicle will still be a worthwhile investment for you.
Road taxes for EV drivers
As you may have guessed, road infrastructure and maintenance are paid for by federal, state, and local government revenue.
The funding to keep roads safe is gathered through a combination of taxes on motor fuel, fees on vehicles like registration and licensure, and tolls.
As more people switch to EVs, some states have implemented added fees to make up for lost gas tax revenue. These include:
- Higher registration fees compared to gasoline-powered vehicles
- Imposing pay-per-mile programs or an annual road usage fee so EV and hybrid drivers can contribute to road infrastructure
- Taxing electric vehicle drivers at higher rates
How high can EV registration fees go? In Colorado, you can expect to pay $50 if you’re registering an electric vehicle. However, in New Jersey, you’ll pay a registration fee as high as $290 starting in 2028. These fees vary depending on where you live.
Does your state have EV registration fees?
There are currently 39 states that require additional registration fees from electric vehicle drivers. If you’re in the market for an EV, some of these fees can make you think twice.
High upfront charges: In Texas, you’ll have to pay $400 for the registration of a new EV on top of standard registration fees. This initial payment covers the first two years of registration. For each subsequent year, you’ll have to pay a $200 annual fee. These fees are directed to the state’s highway funding.
Inflation adjustments: Folks in Pennsylvania who want to purchase an electric vehicle will also be hit by a $200 annual EV registration fee, which will increase to $250 in 2026. The registration fee will be indexed to inflation for subsequent years. Likewise, annual plug-in hybrid registration models will cost you $50 in 2025 and $62.50 next year, which is also adjusted for inflation.
Pay upon weight: In Oklahoma, the amount you pay on annual registration fees is based on the weight of your EV or hybrid vehicle. An EV vehicle under 6,000 lbs. will set you back $110, while a vehicle over 26,000 lbs. can cost you $2,250.
Trump’s bill kills EV tax credit
To encourage commuters to purchase electric vehicles and promote clean energy, the Biden administration’s Inflation Reduction Act (IRA) included a federal tax credit worth up to $7,500 for qualifying “clean vehicles.
The EV tax credit, which is also eligible for some used electric cars, was supposed to be in place until December 2032. However, it's now on the GOP chopping block under Trump’s newly enacted legislative tax package known as the “One Big Beautiful Bill Act.”
As reported by Kiplinger, the megabill will eliminate the EV tax credit for new, used, and leased vehicles. What does that look like?
- Republican lawmakers will eliminate the $7,500 tax credit for the purchase or lease of a new EV.
- The $4,000 tax break for the purchase of a used EV will also end.
- The EV tax credit will sunset after September 2025.
That means if you’d like to purchase an EV and still get a tax break, this year (the coming months) will be your last chance to snag that tax incentive before it's gone.
Stay tuned to Kiplinger’s coverage on Trump's "big, beautiful bill," as some of the measures in it will impact everyday choices from major purchases that promote clean energy, like your vehicle or solar panels, to crucial tax breaks for families and your access to healthcare.
Read More
- Why Homeowners Are Rushing to Install Solar Panels
- Is the EV Tax Credit Going Away Under Trump?
- Save More with Tax Credits for Energy-Efficient Home Improvements While You Still Can
-
Small Businesses Are Racing to Use AIThe Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
The Me-First Rule of Retirement SpendingFollow the 'Me-First" rule and you won't have to worry about running out of money when the stock market goes south.
-
IRS in Turmoil: GOP Budget Cuts and Staff Shake-Ups Threaten Taxpayer ServicesIRS Republican lawmakers advance a controversial budget bill that would gut IRS funding further, risking your 2026 tax filing season.
-
Are Trump Tariffs Legal? Three Things to Know About the Supreme Court CaseTax Law The outcome of this legal battle about tariffs will hit your wallet in one way or another.
-
Another State Rebels Against Trump’s New 2025 Tax Law: What Now?State Taxes Even if states adopt tax policies in the so-called ‘big beautiful bill,’ lawmakers may have workarounds at their fingertips.
-
Is Trump's Tax Plan Speeding Up the Looming Social Security Funding Crisis?Social Security Social Security's combined retirement funds are running out of cash, and its insolvency date is expected to occur in less than a decade.
-
New Trump Tax Bill: Five Changes Homeowners Need to Know NowTax Changes Trump’s new tax legislation is reshaping how tax breaks for homeowners work.
-
Is the ‘Pumpkin Spice Tax’ Coming for Your Fall Coffee Budget?Food Taxes Inflation pressures, tariffs, and talk of the so-called 'pumpkin spice tax' have some wondering about rising coffee prices.
-
Veterans Could Lose Food Benefits Under Trump’s Tax Law: What to KnowFood Benefits Veterans up to age 64 must work to keep food stamps under Trump’s new tax legislation.
-
How the 2025 Child Tax Credit Rules Impact Single ParentsTax Credits New changes to family tax credits, like the Child Tax Credit, will impact the eligibility of some households.
