In 36 states, electric vehicle (EV) drivers pay more in annual fees and taxes than drivers of gasoline-powered vehicles. As EVs gain market share, many state policymakers have moved to offset declining gas tax revenues by layering on EV-specific fees. These typically include additional registration charges, sales taxes on public charging, and per-kilowatt-hour (kWh) electricity taxes. While these measures are often framed as efforts to ensure all drivers contribute to road upkeep, they are frequently used to compensate for the long-standing inadequacy of the gas tax—a system that has failed to keep pace with inflation, rising construction costs, and improved fuel economy. The result is a growing patchwork of policies that disproportionately burden EV drivers, often charging them more than their fair share and more than many gasoline vehicle owners. This inequitable treatment risks undermining state and federal electrification and emissions-reduction goals.

The gas tax has long been the cornerstone of U.S. transportation funding. First adopted by Oregon in 1919, it’s now levied by all 50 states and the federal government. It functions as a user-pays model, charging drivers per gallon of gasoline under the principle that those who use the roads more should contribute more. But that model is breaking down. Improved fuel efficiency, stagnant tax rates, and the rise of electric and hybrid vehicles have steadily eroded the gas tax’s value. Many states haven’t raised their gas tax in decades, and even inflation-indexed rates often fall short of covering the growing cost of road maintenance and expansion. In 2022, fuel taxes still accounted for 38.4% of state transportation revenue—but that figure is declining. Instead of modernizing fuel taxes, many states are now shifting the burden onto a small but growing population of EV drivers. This sidesteps the root problem: the gas tax is no longer a sustainable foundation for 21st-century infrastructure funding. 

EV Registration Fees  

State-imposed EV registration fees have become one of the most visible stopgap solutions—but they’re often poorly calibrated. Today, 39 states impose an additional registration fee on top of the standard vehicle registration—targeted specifically at EVs. In many cases, these flat fees exceed what the average gasoline driver pays in fuel taxes, regardless of how much the EV is driven. For example, Texas now charges a $400 fee at initial EV registration and a $200 annual renewal fee, per Senate Bill 505 (2023). This creates a disproportionate cost for EV drivers—particularly those who drive fewer miles, as the flat fee structure fails to account for actual road usage. It also sends a contradictory policy signal at a time when public agencies are working to accelerate zero-emission vehicle adoption. (See appendix for all state EV registration fees) 

Additional EV Fees 

Importantly, registration fees are just part of the picture. Many EV drivers also face per-kWh taxes and sales taxes at public charging stations, which—when combined with registration fees—create what Atlas Public Policy calls the "EV penalty": a scenario in which EV drivers in 36 states pay more in total annual transportation-related fees than gas vehicle drivers. 

There’s currently no structure in most states to prevent the stacking of these fees. An EV driver may be subject to a double or even triple tax, depending on where they live and where they charge. Meanwhile, gas drivers typically pay only one tax at the pump and are exempt from sales or electricity taxes on their fuel. 

Georgia illustrates how quickly these layered fees can add up. The state imposes a $210.87 annual registration fee for battery electric vehicles, compared to a gas tax of $0.31 per gallon. A typical gas driver using about 490 gallons annually pays $151.90 in state fuel tax—nearly $60 less than the EV registration fee alone. But Georgia also levies a 2.8¢ per-kWh tax on public charging and a 4% state sales tax on electricity purchases. For an EV driver relying on public fast charging, this can add another $116 per year, bringing the total tax burden to over $325—more than double the average for a gas-powered vehicle. For drivers without home charging—disproportionately renters and low-income households—these costs create a structural barrier to EV ownership. 

Federal Proposal Could Compound the Problem 

While states continue to add new EV fees, a recent federal proposal would expand this burden even further. In May 2024, House Republicans introduced legislation to impose a new $250 annual fee on electric vehicles and a $100 fee on hybrid vehicles. The fees would be collected through state registration systems, with revenue directed to the Highway Trust Fund – a fund historically supported by gasoline taxes.  

At the same time, the proposal would eliminate the federal $7,500 tax credit for new EV purchases and the $4,000 credit for used EVs, ending both by December 31, 2025. Automakers that have sold fewer than 200,000 would see the credit sunset a year later, at the end of 2026.  

Taken together, these measures would mark a sharp shift in federal EV policy – replacing adoption incentives with additional cost burdens. For drivers already facing stacked registration and charging fees at the state level, this approach risks deepening the “EV penalty” and stalling momentum toward zero-emission transportation goals.  

Policy Recommendations: Toward Smarter, More Equitable Road Funding 

States seeking sustainable and equitable funding models should look to two proven approaches: Colorado’s phased, inflation-adjusted EV fee structure, and the miles-driven Road Usage Charge (RUC) systems pioneered in Oregon and Utah.

1. Follow Colorado’s Lead on Balanced Fee Design

Colorado offers one of the most thoughtful approaches to balancing EV and internal combustion engine (ICE) road funding obligations. Through House Bill 21-260, the state established two key EV registration-related fees. First, a base EV registration fee of $50 starting in FY 2022–23, adjusted annually for inflation, with revenue split between the Highway Users Tax Fund and the Electric Vehicle Grant Fund. Second, an additional Road Usage Equalization Fee that scales up over time to approximate what gas vehicle drivers pay in fuel taxes. For battery electric vehicles, this fee starts at $4 in FY 2022–23, rises to $16 in FY 2025–26, and increases to $96 by FY 2031–32. Plug-in hybrids follow a lower, parallel fee schedule starting at $3 and increasing to $27 over the same period. 

In parallel, Colorado indexed its gasoline fees to inflation to preserve the value of gas tax contributions over time. This dual-track approach ensures that both gas and electric vehicle drivers contribute fairly to road maintenance based on long-term cost trends. 

Colorado also exempts EV charging from state sales tax, preventing the compounding of fees that occur in many other states.

2. Explore Road Usage Charges for Long-Term Equity

At the same time, states should invest in long-term solutions like Road Usage Charges (RUCs)—fees based on actual miles driven rather than fuel consumed. Oregon pioneered this approach with Senate Bill 810 (2013), expanded under House Bill 2881 (2019). Utah followed with Senate Bill 136 (2018) and House Bill 186 (2022). 

RUCs are technology-neutral, scalable, and directly tied to road usage, making them a more sustainable model than flat fees or per-gallon taxes. They also account for rising fuel efficiency in ICE vehicles and increasing energy efficiency in EVs, both of which reduce the effectiveness of traditional fuel-based revenue. RUCs ensure that every driver contributes proportionally, no matter how efficient their vehicle is. 

While implementation challenges exist—including privacy, administration, and public buy-in—states can start with voluntary pilots, like Oregon and Utah have, building capacity and trust over time. 

Conclusion 

As states confront declining gas tax revenue, the path forward must balance fiscal responsibility with fairness. Current EV fee structures often do the opposite—penalizing a small but growing group of clean vehicle adopters while allowing outdated fuel taxes to stagnate. 

This isn’t inevitable. States like Colorado have shown it’s possible to modernize fuel taxes, phase in equitable EV fees, prevent stacked taxes, and reinvest in infrastructure—all while supporting clean transportation goals. At the same time, mileage-based RUC systems offer a durable framework that can eventually replace fuel taxes altogether. 

The solution isn’t a patchwork of punitive fees—it’s a cohesive, forward-looking system where every driver pays fairly based on how much they use the roads, not what powers their vehicle. To future-proof transportation funding and accelerate the shift to zero-emission vehicles, policymakers must rethink how we tax the road—and design systems grounded in equity, transparency, and sustainability. 

Comparing State EV Fees and Gas Taxes 

To better understand the disparity in road funding contributions, the table below compares gas tax rates, electricity taxes, sales taxes, and EV-specific fees across all 50 states.