Kentucky Introduces New 2024 Laws: Electric Cars Face Double Taxation, Gas-Powered Ones Pay Only Single Tax

Kentucky Electric Vehicle Owners Face Higher Taxes

From the start of this year, owning an electric vehicle (EV) in Kentucky has become more costly due to the implementation of two new taxes, which are higher than those imposed on gasoline-powered vehicles. The new taxes on EVs are part of a larger pattern of overtaxing these eco-friendly vehicles while gasoline-powered vehicles, which cause more environmental and infrastructural damage, continue to be taxed less.

EV owners in Kentucky are now required to pay an additional annual registration fee of $120 – a fee that is already in place in most other US states. Moreover, public EV charging stations in Kentucky are now charged an additional 3 cents per kilowatt hour of electricity distributed, and another 3 cents for chargers located on state property. This new tax will disproportionately impact commuters and apartment dwellers who depend more on public charging, potentially making EV ownership more expensive for renters than homeowners.

These new taxes are reportedly meant to offset road repair costs, a view largely promoted by the fossil fuel industry, which argues that EVs do not contribute to these costs. However, reality paints a different picture, with gas vehicles covering less than one-third of Kentucky’s road costs, leaving the state to shoulder the majority of the road maintenance expenses.

Despite Kentucky’s reputation as a leading location for the manufacture of electric vehicles, these additional taxes could deter EV adoption, negatively affecting the state’s industry and public health.

It’s worth noting that this isn’t the first time that a sub-national jurisdiction has attempted to impose taxes on EVs. The Kentucky situation draws parallels to this, shedding light on the global trend of taxing eco-friendly vehicles as nations grapple with the shift from fossil fuels to renewable energy sources.

In 2021, the Australian state of Victoria introduced a tax on Zero and Low-Emission Vehicles (ZLEVs), charging up to 2.8 cents for every kilometer traveled in an EV. However, the tax was later scrapped, with the Australian High Court ruling that only the federal government has the authority to impose excise duties.

The implementation of higher taxes on EVs in Kentucky raises concerns about the equitable treatment of eco-friendly vehicles and the impact on the transition to a greener transportation system. As the demand for EVs continues to grow, policymakers should consider incentivizing their adoption rather than imposing additional financial burdens that hinder the progress towards a sustainable future.

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