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Electric Vehicle Charging Taxes: A State-By-State Overview
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The electric vehicle (EV) and hydrogen electric vehicle (HEV) revolution is well underway, with an increasing number of drivers switching to eco-friendly options every day. However, as EVs and HEVs become more common, states are implementing taxes and regulations on charging stations, potentially affecting drivers’ and businesses’ finances. In this brief guide, we'll explore how different states are handling EV and HEV charging taxes, providing valuable insights for both current and future clean vehicle owners. Delaware: Planning for an EV-Centric FutureAlthough Delaware has not passed recent legislation directly related to EV and HEV taxes, the state is taking proactive steps to prepare for an electric vehicle-dominated future. The state has passed a bill requiring newly constructed residential dwellings to include infrastructure for charging electric vehicles. This forward-thinking legislation positions Delaware for the projected surge in clean vehicle sales by the year 2040.According to Representative Krista Griffith, co-sponsor of the bill, "Major vehicle manufacturers are pledging to go all-electric, and we need to take the step to ensure that we’ve got the appropriate electrical charging infrastructure in place." Furthermore, The First State offers The Clean Vehicle Rebate Program. This rebate is not a tax credit. is not a tax credit. It is a $2,500 cash rebate for electric vehicles purchased or leased after May 1, 2023. Residents must apply within 90 days of their purchase date.Georgia: Excise Tax on EVs and Hydrogen GasGeorgia is taking a unique approach to EV and HEV taxation with an excise tax on both electric vehicles and hydrogen gas used for charging. Effective on July 1, 2023, this tax amounts to 26 cents per 11 kilowatt-hours, equivalent to a gallon of conventional gasoline. Additionally, one recent report explains, Georgia requires private entities offering public chargers to meter the total kilowatt-hours dispensed per station. The Peach State’s taxation approach has garnered criticism as it primarily affects clean vehicle owners using public charging stations, potentially discouraging electric vehicle purchases. The Associated Press notes that alienating EV and HEV drivers is not in the state’s best interest. Georgia has been a major beneficiary of the nationwide electric vehicle investment boom, with over 40 electric vehicle-related projects getting underway since 2020. These projects are estimated to result in $22.7 billion of investment and 28,400 jobs.According to Governor Brian Kemp, "We want to make Georgia the e-mobility capital of the nation."Kentucky: Charging Stations Face New TaxationKentucky, a burgeoning hub for EV battery production, is introducing a new tax that might complicate the state’s charging infrastructure. Starting in January, all publicly available EV chargers, regardless of whether they offer free electricity, will be subject to a usage tax based on the amount of electricity dispensed, with a rate of $0.03 per kilowatt-hour. While the tax aims to capture revenue from out-of-state EV and HV drivers, critics argue that it may discourage the installation of public charging stations.According to Lane Boldman, executive director of the Kentucky Conservation Committee, "The biggest concern is that it basically is not going to bring in the revenue that makes it worth the expense, so you're going to see people stop providing public chargers."This is just the start for the electric vehicle industry in The Bluegrass State. WDRB notes that the Ford Motor Company and its Korean partner, SK On, are constructing two battery factories in Glendale, Kentucky. The $5.8 billion BlueOval SK Battery Park is expected to open in 2025. The factories will employ 5,000 people.
Additionally, the U.S. Department of Energy awarded two grants totaling nearly $500 million to Ascend Elements, a Kentucky manufacturing company. The grants will go toward production of battery materials and new batteries for electric vehicles. Texas: Higher Registration Fees For EV OwnersIn Texas, owning an electric or hydrogen-powered vehicle has become more expensive thanks in large part to a new law signed by Governor Greg Abbott. This legislation imposes a registration fee of up to $400 for electric vehicle owners and an additional $200 for each renewal, with the aim of generating $38 million in new revenue. The measure took effect on September 1, 2023.A Kiplinger report points out that proponents argue that it ensures EV drivers contribute to highway expenses. State Senator Robert Nichols (District 3), bill sponsor, said, “With the growing use of EVs, the revenue from the fuel tax is decreasing, which diminishes our ability to fund road improvements for all drivers.”However, opponents are worried that the increased Texas EV and HEV registration fee will punish electric vehicle adopters, while still not effectively addressing the state’s problems with road funding. For instance, a Consumer Reports Advocacy article deemed the measure as a “punitive tax on people who choose to go electric.”Utah: Cashing In on EV AdoptionUtah lawmakers have been cashing in on electric vehicle adoption by implementing multiple taxes and fees. All EVs, plug-in hybrid electric vehicle (PHEV), and hybrid electric vehicle (HEV) owners are required to pay an extra annual registration fee on top of the standard fee. According to the Alternative Fuels Data Center, 2023 fees are:EV$130.25PHEV$56.50HEV$21.75In addition, starting January 1, 2024, the retail sale of electricity for EV charging will be subject to a 12.5% tax. The tax may be based on kilowatt hours sold, the cost to charge per hour, or a flat subscription fee – final details are still being determined by state authorities.Wyoming: Level 2 Chargers Caught In the CrossfireIn Wyoming, a recent draft bill initially raised concerns for Level 2 electric vehicle (EV) charging station operators. Now, however, state lawmakers have amended the proposal so that a new tax and annual licensing fee will no longer impact Level 2 chargers.According to Cowboy State Daily, Level 2 chargers are more powerful than standard residential plugs but charge more slowly than Level 3 DC fast chargers, like the well-known Tesla Superchargers.Following debate regarding the bill, the state’s Joint Transportation, Highways and Military Affairs Committee agreed that only Level 3 chargers should be subject to new fees. The revised bill proposes that Level 3 station operators will pay a 4-cent tax per kilowatt-hour sold, striking a balance between infrastructure growth and road support.Level 2 operators like Patrick Lawson, CEO of Wild West EV, have spoken out to say they are relieved by this move – they believe the taxation and extra fees would have likely put most Level 2 stations out of business.As electric vehicles become increasingly popular, state governments will continue to adapt their tax policies to account for a changing world. While taxation may help fund road infrastructure and bridge revenue gaps, it's essential to strike a balance that encourages EV and HEV adoption and ensures fairness for all drivers. Stay informed about your state's EV and HEV tax regulations to make the most of your eco-friendly driving experience.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
