Washington State Residents: Plug In, But Pay Up

It’s getting a little more difficult to be green in the Evergreen State these days. Beginning in February 2013, electric car owners will be receiving conflicting messages: Drivers are getting tax incentives from Washington D.C. for plugging in instead of fueling up, but those savings will be offset by Washington state’s new annual tax on fuel efficient cars.

The U.S. has made it a national priority to increase fuel efficiency, with plans to inject $7.5 billion into the electric vehicle industry over the next seven years, according to The Washington Post. The amount includes tax credits for as much as $7,500 toward the purchase of plug-in hybrids and all-electric cars such as the Chevy Volt, the Nissan Leaf or the Toyota Prius. The government also provides grants to electric battery manufacturers and loans to automotive companies for the production of electric vehicles.

Drivers of fuel efficient vehicles have additionally benefited from paying less in gasoline taxes. In some states, this can add up. After Americans factor in 18.4 cents per gallon of gas in federal tax, the state’s tax on gas can be as high as 39.15 cents per gallon in North Carolina or as little as 7.5 cents per gallon in Georgia.

The state of Washington has one of the highest state gas taxes in the nation, with drivers paying a tax of 37.5 cents per gallon.

(You can find out how much your state taxes are by checking out bankrate.com’s interactive map.)

Now, to make up for lost revenue, Washington state will be charging residents who own fuel-efficient vehicles an annual tax of $100. The state has decided that electric car owners need to “contribute their fair share to the upkeep of our roads,” says Washington State Senator Mary Margaret Haugen who sponsored the bill.

It’s not only the Evergreen State sending inconsistent signals to fuel conscious drivers: Oregon, Kansas, Arizona and Utah have also toyed around with a similar tax, says The New York Times.

For consumers and global resources investors alike, I believe government policies are precursors to change. It’s interesting to see that the state has chosen to garner more money from its residents to pay for its roads instead of employing fiscal discipline or finding cost effective ways to maintain its infrastructure.


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