GREG HARTON: State’s tax on electric cars looms – NWAOnline


When human behaviors and technologies change, a shift in the way government taxes people will eventually follow.

Take, for example, the transition many folks have made to online shopping. For years, the sales online happened in a relatively tax-free environment. Shoppers at local, bricks-and-mortar stores paid local and state sales taxes on their purchases, but not so at Amazon.com and other online sites.

Local retailers decried their own government’s unequal treatment — taxing transactions at physical stores that provide local employment and economic activity, while letting the online cherry-pickers steal away purchases with their online ease-of-business and direct home delivery.

Change can be resisted for a while, but change gonna come. So says the late Sam Cooke and folks working in the newspaper business.

Come Oct. 1, the Tax Man cometh anew for people who drive electric and hybrid vehicles. Annual registration fees for electric vehicles increase by $200. It’s $100 for people who drive hybrid vehicles that use both gas and electric-assist motors to turn their rides into fuel sippers.

A gentleman dropped by the office early last week upset that his family would face payment of this new fee. To his way of thinking, the vehicle is driven lightly. His thought was that it didn’t make sense for his family to be forced to pay $100 a year more when they drive so little.

The new registration fees are part of Act 416, the legislation passed last spring by Arkansas lawmakers who were looking for ways to raise new money for highway maintenance and construction.

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Electric and hybrid vehicle registration fees are expected to bring in about $1.9 million a year.

The theory is this: No matter how a vehicle is fueled, as long as it has tires, it’s contributing to the deterioration of roads and highways that need continual upkeep. Most Arkansans pay their part through their purchases of fuel — gasoline and diesel. Act 416 imposed new levels of taxation on fuels, too, with state officials estimating the annual impact to be around $58 million.

If anyone needs help understanding that taxes aren’t always fair, consider the rest of what Act 416 does: It will shift millions of dollars in casino tax revenue to the Arkansas Department of Transportation for use in building and maintaining highways, with some funding also going to local governments for road projects.

What does betting at a casino have to do with highways? Pretty much nothing, but lawmakers saw the casino tax revenue as a new source of funding worth allocating to an existing state need. They also were drawn to it because of its potential to grow in the years ahead.

Some don’t care for the approach. Essentially, it’s the state getting in bed with the gambling industry to exploit Arkansans (and, they hope, visitors) through the false promise of jackpots to help fund an essential state service. The Legislature has determined that to be a legitimate approach, perhaps having been conditioned into such thinking by the acceptance of the Arkansas lottery to fund colleges through scholarships to the state’s students.

The visitor to our office wasn’t happy to be paying the new registration fee on his hybrid vehicle at all, but that battle is lost. When the state needs money, you can bet your asphalt the Tax Man will always find a way.

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It doesn’t matter if you’re helping to end climate change by driving an electric car. Roads still have to be paid for.

Maybe that’ll change when someone invents one of those Luke Skywalker-style Landspeeders that over a couple of feet off the ground. It’s been more than 40 years since George Lucas imagined it. We’ve all got Star Trek-inspired communicators in our pockets, so where’s our hovering vehicles?

Our government will find a way to tax them once they’re real, if not before.

Commentary on 09/22/2019

Print Headline: State’s tax on electric cars looms

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