A new Consumer Reports study shows that Mississippi’s new tax on electric vehicles will be 158% higher than the comparable gas tax on a regular vehicle. That’s approximately 2.5 times more. It will be one of the highest electric vehicle taxes in the nation. And, unlike the gas tax, the electric vehicle tax will go up with inflation.
The tax, passed last year by the state legislature instead of a gas tax, applies to any vehicle with rechargeable batteries, fuels cells or other portable sources of current. The tax includes all hybrid vehicles. Unfortunately, the tax will be a drop of the bucket, making up less than .04% of the state highway funding in states where it has been adopted, according to the report. The Mississippi electric vehicle tax would be equivalent to a car getting about 14 highway miles per gallon.
In 2019, eight states passed new fees for EV registrations or increased current fees and, of these, Consumer Reports found that all but one would be “extremely punitive” — or would cost EV drivers at least 50% more than the gas taxes paid by the driver of an average new gas-powered car. All told, there are already 18 states with EV fees higher than the annual gas tax equivalent for an average new car, and at least eight more punitive fees have been proposed.
The real culprit in the loss of gas tax revenue is that conventional vehicles have become far more efficient. As they consume less gasoline, less revenue is generated for the highway funds. Moreover, gas taxes have not kept up with inflation for decades, the report states. Adjusted for inflation and fuel efficiency gains, gas taxes have fallen 64% over the last 25 years.
The passage of the electronic vehicle tax has done practically nothing for the real problem: Mississippi has never adjusted the 1987 gas tax for inflation. This failure must be corrected or our roads will cost far more to fix down the road and vehicle owners will spend far more than the extra $7 a month in gas taxes on new rims, tires and front ends. Neighboring Alabama and Tennessee have addressed this problem and adjusted the tax. It’s high time Mississippi state leaders step up to the plate and do the same. Using hypothetical lottery money to fund a fraction of the maintenance shortfall is not going to cut it.