Raw: [As the market share of electric vehicles (EVs) on the road grows, the gas tax’s ability to fund road projects and decrease traffic congestion erodes. Both federal and state real tax revenue per vehicle mile traveled has been on a steady decline for decades, creating a fiscal gap for road expenditures even as the demand for road infrastructure improvements has grown.]
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Home • Data • State Taxes • Electric Vehicle Taxes by State, 2025
See previous versions of this postElectric Vehicle Taxes by State, 2025August 19, 2025August 15, 20255 min readBy: Jacob Macumber-Rosin, Adam Hoffer, Brayden MyersDownload Data
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US states fund most of their road and infrastructure budgets with revenues from gasoline taxes. The historical rationale behind this is intuitive. The more people use public roads, the more gasoline they consume, making the gas taxA gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. These taxes are levied in a few ways, including per-gallon excise taxes, excise taxes imposed on wholesalers, and general sales taxes that apply to the purchase of gasoline. a well-designed user feeA user fee is a charge imposed by the government for the primary purpose of covering the cost of providing a service, directly raising funds from the people who benefit from the particular public good or service being provided. A user fee is not a tax, though some taxes may be labeled as user fees or closely resemble them..
As the market share of electric vehicles (EVs) on the road grows, however, the gas taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.’s ability to fund road projects and decrease traffic congestion erodes. Both federal and state real tax revenue per vehicle mile traveled has been on a steady decline for decades, creating a fiscal gap for road expenditures even as the demand for road infrastructure improvements has grown.
Tax treatment of EVs is complicated. EVs generate lower emissions than traditional combustion engine vehicles, suggesting tax-preferred status from an environmental perspective. Because EV users don’t pay gas taxes for their road use, however, separate fees and taxes may be needed to put EV road use on a more level status with traditional vehicle road use. Combining the fiscal gap with a desire to incentivize lower-emission vehicles, states have responded with a variety of tax policies.
The following map depicts states’ different approaches to incentivizing EV adoption and the imposition of higher registration fees for EV ownership.
2025 Data
2023
Expand or Collapse Table
States Apply a Variety of Tax Treatments to Electric VehiclesUS State EV Purchase Tax Credits and Annual Registration Fees, 2025
StateEV Purchase Tax CreditEV Annual Registration FeeHybrid Annual Registration Fee
Alabama0203103
Alaska000
Arizona000
Arkansas0200100 (a)
California0 (b)1180
Colorado350060.050
Connecticut750-5,00000
Delaware1,000-2,500 (c)00
Florida0 (d)00
Georgia0234.970
Hawaii0500
Idaho014075
Illinois4,000 (e)1000
Indiana023077
Iowa013065 (a)
KansasUp to 400016570
Kentucky012060
Louisiana011060 (a)
MaineUp to 7,500 (f)00
Maryland3,000 (g)125100 (a)
MassachusettsUp to 3,50000
Michigan016060 (a)
Minnesota0750
Mississippi0 (d)15075
Missouri013567.5
Montana0130-19070-100
Nebraska015075
Nevada0 (d)00
New Hampshire0 (d)10050
New JerseyUp to 4,000 (b)(h)2600
New MexicoUp to 300000
New YorkUp to 2,00000
North Carolina0214.5107.25
North Dakota012050
Ohio0200150 (a)
OklahomaUp to 5,50011082 (a)
OregonUp to 7,500 (f) (h)115 (i)35 (i) (j)
PennsylvaniaUp to 3,000 (f) (k)20050
Rhode IslandUp to 1,500200100 (a)
South Carolina060 (m)30 (m)
South Dakota0500
Tennessee0200100
Texas0200 (n)0
Utah0130.25 (o)56.5 (a)(o)
VermontUp to 5,000 (c)8944.5
Virginia2,500131.88 (l)0 (l)
Washington0 (e)15075 (a)
West Virginia0200100
Wisconsin017575 (a)
Wyoming02000
Notes:
(a) Value listed is for plug in hybrids only.
(b) Partial sales and use tax exemptionA tax exemption excludes certain income, revenue, or even taxpayers from tax altogether. For example, nonprofits that fulfill certain requirements are granted tax-exempt status by the Internal Revenue Service (IRS), preventing them from having to pay income tax..
(c) Funding currently exhausted; expected to resume mid-2026.
(d) Rebates available through municipalities.
(e) EV purchase is exempt from sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. .
(f) Credit amount depends on income level.
(g) Credit applies only to vehicles priced below $50,000.
(h) Available as a rebate, not a tax credit.
(i) Drivers may opt into a $0.02/mile pay-as-you-go system with an $86 annual registration fee.
(j) Hybrid registration fee applies to high-MPG vehicles generally, not just hybrids.
(k) Limited to 500 rebates for July 2025 – July 2026.
(l) Calculated as a function of vehicle miles driven; set at $131.88 for EVs.
(m) Fee levied biennially.
(n) $400 for new EV registrations, $200 for renewals.
(o) Users may elect to pay $0.0111 per mile driven instead.
Source: State departments of transportation; state statutes; author calculations
Data compiled by Brayden Myers , Jacob Macumber-Rosin, Adam Hoffer
Data compiled by Benjamin Jaros , Adam Hoffer
See Prior Analysis
For several years, residents of all states have been eligible to receive a federal tax credit of $7,500 for qualified EV purchases. However, this tax credit ends for vehicles purchased after September 30, 2025. Seventeen states offer an additional incentive beyond the federal credit, ranging from a $1,500 incentive in Rhode Island to a $7,500 credit in Oregon and Maine.
Contrary to a tax incentive, 40 states impose a higher annual vehicle registration fee for EVs and some hybrid vehicles to help offset forgone gas tax revenue. These fees range from $50 in Hawaii and South Dakota to $260 in New Jersey. These, however, have generally been justified as modest efforts to defray the lack of gas tax collections from EVs, which may be more environmentally friendly, but still put wear and tear on roads.
Major Changes Since July 2023
California and Alaska ended their electric vehicle tax credit programs.
New Mexico introduced a new electric vehicle tax credit.
Maryland, Montana, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Texas, and Vermont introduced new registration fees for electric vehicles.
Tennessee increased the registration fee for electric vehicles from $100 to $200.
Kansas increased the registration fee for electric vehicles from $70 to $165.
Indiana increased the registration fee for electric vehicles from $150 to $230.
Nebraska increased the registration fee for electric vehicles from $75 to $150.
Wisconsin increased the registration fee for electric vehicles from $100 to $175.
North Carolina increased the registration fee for electric vehicles from $140.25 to $214.50.
Eleven states both offer an incentive for the purchase of an EV and impose a higher registration fee for EVs than for combustion engine vehicles. The table below summarizes these policies.
Another response by states to backfill reductions in gas tax collections has been to implement a tax on EV charging stations. States like Georgia, Iowa, Kentucky, and Oklahoma impose a tax per kilowatt-hour distributed by charging stations. While this added user fee may help equalize treatment between combustion engines and EVs, because many users charge their EVs at home, these taxes can fail to fully account for EV road use.
Higher registration fees and EV charging station taxes are an attempt to better connect vehicle miles traveled (VMT) to transportation and road funding, yet in some instances, they are implemented in conflict with policies aimed at increasing EV adoption. A simpler transportation policy solution would be a VMT tax.
A VMT tax is levied on the number of miles traveled by an individual vehicle. This is usually done by odometer reading or through a GPS device. While there are privacy concerns with the use of GPS devices to track VMT, relying purely on odometer readings can result in drivers being charged for miles driven outside of the taxing state.
Moreover, as devices and apps used by insurance providers to track safe driving become commonplace, similar tools could be used to directly link the miles traveled to public road and infrastructure spending in the proper jurisdiction.
Currently, four states have active VMT tax programs:
Oregon drivers with vehicles rated above 20 mpg are allowed to opt to pay $0.02 per mile driven instead of the state’s $115 electric vehicle registration fee. Miles traveled are tracked by either an odometer plugin or a telematic device. This was enacted in 2013.
Utah electric vehicle drivers may opt to pay $0.0111 per mile driven, up to the value of the state’s electric vehicle registration fee. This is tracked via an app. The program was enacted in 2020.
Virginia allows drivers with vehicles rated above 25 mpg to opt into a per mile payment based on the vehicle’s fuel efficiency. For electric vehicle drivers, this value is set to $0.0114 per mile. Mileage is tracked via an OBD plugin. This was enacted in 2022.
Hawaii began the HiRUC program on July 1, 2025, allowing electric vehicle drivers to pay either $0.008 per mile or a $50 flat fee. The mileage is measured by odometer reading. Because of the state’s unique geographic situation, odometer-only reporting will likely avoid the issue of taxing out-of-state travel. This was enacted in 2025.
Vermont was expected to begin a similar program in 2025, but implementation has been postponed to 2027. Additionally, California and Washington have run significant VMT pilot programs.
The state EV taxation landscape reflects the evolving transportation sector and the pressing need to address both fiscal gaps in road funding and environmental concerns. As the EV market continues to evolve and technology advances, it’s likely that tax policies will also adapt.
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Previous Versions
DataSeptember 20, 2023August 15, 2025
How Are Electric Vehicles Taxed in Your State?4 min read
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TopicsDataEnvironmental, Energy, and Transportation TaxesExcise TaxesIndividual and Consumption TaxesOil and Gas Taxes
TagsTags:Revenue StabilityState Tax TrendsVehicle Miles Traveled (VMT) Tax
LocationsLocations:AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaStateTennesseeTexasThe District of ColumbiaUnited StatesUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming
Authors
ExpertJacob Macumber-RosinExcise Tax Policy Analyst
ExpertAdam HofferDirector of Excise Tax Policy
Brayden Myers
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