Featured Wisconsin Hybrid Tax- is it legal?

It is a Repub/Democrat thing, as well as huge Rural/Urban divide. I have sat in on recent BiPartisan Policy Center panel discussions re: Infrasrtructure..

Repubs will agree to higher gaso taxes for infrastructure projects, but if and only if we change to a miles-driven gaso tax basis. Repubs do not agree with electrics and a hybrids paying less taxes. The other factor is the Rural/Urban divide, the rural voters feel strongly they get screwed by paying high taxes and not getting services for their taxes, And the rural folks need pick-ups, and they have to travel big distances and burn lots of fuel. By the way, most studies seem to show the rural areas actually do get more than their fair $hare of the pie, but it's the perception that counts re: attitudes, and the rural folks feel totally shafted.

Where do we go from here? Not sure but if it's like Virginia we will have to do tax increases in a compromise manner that we do not like. Most BEV are probably liberal, so liberals like higher taxes. So do not complain if we switch to miles driven and BEV drivers have to pay their fair share. When we have a tax increase in Virgina, it is bifurcated so the Dem parts of the state have to pay more. We did not accept higher gaso taxes (due to rural opposition) and went to extra sales tax instead, higher sales tax on the Dem/more urban-suburban parts of the state.

 

I think what needs to be shouted from the mountain tops is that fees are extremely inefficient (half is lost), lead to bigger government
to collect and thus are anti-conservative And anti-republican
They are “optional” In rural and not so rural areas.
I’ve been noticing a lot more expired plates lately .

Republicans need to come to terms with half of fees being pissed away compared to the 99% efficient gas tax and 94% efficient sales taxes

The percentage of people who drive is dropping, in my state the number of registrations has dropped from a peak of 8.5 million to 6.5 million and based on all indications will be continuing to drop.
This means the miles of commercial use vrs consumer will start to favor commercial, many of which are road tax exempt. All signs point to commercial vehicles staying fossil powered for decades.

concentrating the fees onto individuals at ever increasing rates will speed the trend and the supply and commercial side will need to be dealt with if we want funding as more folks opt out.

 

Do any of these studies adjust for the great differences in public vs private ownership in rural vs urban areas? These differences make direct per-capita differences absurd, at least here out west, but I don't yet know of any reasonable way to adjust.

At least from the Rocky Mountains to the Pacific Coast, rural lands have a far higher rate of government ownership (federal and state) than do urban lands. These lands are exempt from property taxes, and the 'owners' are exempt from paying income and numerous other taxes. But these properties still need many (though certainly not all) of the tax-funded government services provided to private properties too. Plus, the operation and maintenance of these government lands consume tax monies from the treasury, rather than add tax revenues to it. But comparisons per-acre don't work either, because the typical levels of development are not at all comparable.

Numerous right-wingers have a solution: sell these government lands and turn them into privately owned tax-paying assets, this will help shrink the perceived tax imbalance. But numerous left-wingers and conservationists immediately decry this loss of valuable public assets.

I don't know how to make a valid urban-vs-rural tax pay-vs-consume comparison, but the ones I've seen appear meaningless.

 

Not sure...I was quoting a former Pa. Congressman on the BPC panel. We do not have the public lands issue here as much, but Pa/Va have some rural urban divide. Especially in Virginia we expect flip from purple to full-blue in Nov, but til now the rural Repubs had the control of the House/Senate so that gave rural a big voice. Interesting future we face here as the new party takes control soon.

 

OK...so this is interesting...

WI DOT is not willing to take any responsibility for categorizing vehicles to be subject to the hybrid-electric vehicle surcharge (that's YOUR $75). Instead, they outsource the whole process to a company called IHS Markit, apparently using some software application called VINtelligence. IHS Markit just gives a final result...in the case of my 2003 Honda Insight, "full hybrid-electric vehicle"...that's $75 please. Since they outsource this, it will likely be difficult (probably impossible) to get the details on the categorization process through open records requests, but I'm trying.

But, the fact they use IHS Markit is also interesting. See, IHS Markit is into data analytics, but not just for automotive VIN categorization and stuff. Putting on my tin-foil, conspiracy theory hat....IHS Markit is also very into energy sector analytics...and I don't think it is so much for wind and solar. They are owners of folks like PFC Energy...a global energy research and consultancy group...previously known as Petroleum Finance Company. Mainly, it's gas and oil, and maybe a little clean energy mixed in. OK...then the other thing is that, like lots of companies, IHS Markit happens to be a member of ALEC...you know, the folks that write the model legislation that is the basis for the hybrid fees.

Maybe they are really good guys. It's hard to tell. But I'd be real interested in whether other states are using the same company, and the VINtelligence software, to categorize vehicles for the hybrid taxes. And, if so, how IHS Markit managed to be of so much interest to these states. It looks like a nice, national contribution to the cause.

B

PS...the well know vice-chair of IHS Markit, Daniel Yergin, is an apparent advocate for fracking and shale oil extraction. Probably has no correlation...

 

My bet is on graft.

 

Page 5 of this paper shows in black and white why the ~100,000 gas-only Prius in Wisconsin needed to be penalized with a $75 fee. I knew this was the case (that trying to punish only EVs and PHEVs was not a sustainable budgetary proposition, providing only $.5M in revenue), but I didn't realize that the state actually admitted it in print. So you Prius owners are providing the other $7,000,000/yr. It's interesting to follow the threads!

B

 

I've received responses to one of my WIDOT Open Records Requests about details on the use of IHS Markit's VINtelligence application. That's the proprietary method WIDOT uses to categorize gas-only hybrid-electric vehicles to be subject to the $75 surcharge. It looks like WIDOT gives IHS Markit (or its Polk "subsidiary") $11,500/year for the privilege of hiding the categorization process for this taxation within VINtelligence. So, 150 (gas-only) payers of the surcharge get to contribute their $$ to this opaque company for the privilege of being scr...wed. IHS Markit (Polk) makes a nice sales pitch that their VINtelligence app is used in at least 47 other states, and numerous counties, around the country. So, figure they make between a half and one million bucks telling the government who should be taxed (and, admittedly, who should and should not be allowed in HOV lanes that allow "inherently low emission vehicles" - ILEVs). And, of course, the government doesn't need to have any idea about how IHS Markit comes up with their categorizations.

Wisconsin did a sole source purchase of VINtelligence, so IHS Markit did a good job convincing WIDOT that they were the opaque product of choice to get them the $7M revenue stream they promised. Of course, WIDOT could have done this in-house using a free VIN decoder base, like NHTSA's decoder. But then the process would need to be properly vetted and open to scrutiny by folks like me, ...you know... the public, subject to arbitrary application of surcharges/taxation.

For Prius owners, I still recommend contesting the fee based on equal protection as posted earlier. Unfortunately, this is not a challenge to the technical implementation of the surcharge...like a direct comparison between specs of vehicles subject vs vehicles not subject to the tax. That means it is more likely subject to litigation than to a correction internal to WIDOT and the VINtelligence app.

B

 

The Wisconsin Hybrid Tax IS ILLEGAL! Citing the WI Legislative Fiscal Bureau Paper #696:

"a consumer's choice to purchase a hybrid-electric vehicle for its higher fuel efficiency is the same choice other consumers make when choosing the more fuel efficient vehicle between two conventional vehicles. Hybrid technology is evolving such that hybrid vehicles available in the U.S. market now come in all-sized vehicles. It does hold that between two comparably-sized vehicles, one conventional and one fully hybrid-electric, the hybrid electric would typically pay less in fuel costs, including state fuel taxes. However, the same concept would hold for any consumer who makes a decision to purchase a more fuel efficient vehicle when choosing between two conventional vehicles. That consumer would also pay less in fuel costs, including state taxes, than if the consumer had chosen the less fuel efficient vehicle. [Alternative 4] Consequently, the Committee could delete the current law additional registration fee of $75 on hybrid-electric vehicles."

By the rules of Equal Protection, this type of tax is illegal:

"Equal protection requires that classification rest on real and not feigned differences, that the distinction have some relevance to the purpose for which the classification is made, and that the different treatment be not so disparate, relative to the difference in classification, as to be wholly arbitrary."

The reason gas-only Prius hybrid electric vehicles are being taxed is to facilitate taxation of PHEV and EV vehicles, as per this cite from WI Legislative Fiscal Bureau Paper #35:

"the Department determined that it was unable to identify by vehicle identification number the subset of hybrid-electric vehicles that have batteries with more than four kilowatt hours of capacity. As a result, the Department is only assessing the $100 fee on electric ("non-hybrid, electric") vehicles, which can be identified.

Hybrid-electric vehicles represent less than 2.0% of the state's total vehicle fleet, while electric vehicles represent less than 0.5%. Due to the low number of electric vehicles in the state, the estimated revenue resulting from this fee is expected to be relatively minor in the near-term (less than $0.5 million in the 2017-19 biennium). As this segment of the fleet increases over time, the fee is likely to become a somewhat more significant source of revenue."

The administrative costs would barely be covered if the revenue was limited to EV and PHEV fees, generating about $500,000.

The communities of gas-only hybrids, PHEVs and EVs is small, so it is difficult to get traction against this through any kind of public protestation. Litigation is the potential alternative.

I've tried getting the Sierra Club interested, but they seem focused on EVs only. If anyone on this forum has an "in" with them, or any other organization that would be willing to litigate, please let them know that EVs (and PHEVs) are subject to the punitive taxes largely because gas-only Prius vehicles are paying the administrative bills the states are incurring.

The ideal scenario is to win the litigation for gas-only hybrids, including a refund of all fees already collected. And then go after the states that tax EVs and PHEVs based on the unsustainable budgetary implications of collecting insufficient revenue to cover administrative costs.

B

 

Revisiting this topic,
The wording of the Wisconsin hybrid law had to be significantly reworded by the legislative review board to be enforceable but I can’t find the final wording of the law. The copies I’ve found online don’t appear to reflect the final wording. Anyone have a link to it that is actually current?

in any event

an individual in a state with a near identical hybrid law was bringing about a lawsuit against his state but his case was rejected and he was given a form to complain that his vehicle didn’t meet the hybrid definition and got the hybrid fee refunded.

the state claims that because he can request a correction every single year he doesn’t have a case.

I own the exact same car and it appears to be the exact same law which by the letter should not apply to the Honda Insight, I was trying to find the form to make a complaint to the dmv for a registration correction and similarly am not finding the current state forms.

Asking gets you no where.

If anyone is wondering why in some cases folks with a Wisconsin hybrid still aren’t paying the 2018 WI hybrid fee today it’s because of the unenforceable nature of the law in its original wording which then took a couple years to fix and took a few more years to get through the notory and upgrades to identify applicable hybrid cars.

 

I couldn't find any info on registrations in the Peoples Democratic Republic of NJ for hybrids or plug-ins, but here's the changes for EVs.

Under New Jersey law effective July 1, 2024, zero emission vehicles (ZEVs) are subject to an annual fee in addition to the existing registration fee. The additional fee applies to any vehicle certified as a ZEV pursuant to the California Air Resources Board ZEV standards for the applicable model year. The additional fee is payable in full at the time of initial registration and at every renewal. Beginning July 1, 2024, the annual fee is $250. The annual fee increases $10 per year for four years thereafter.
The New Jersey Motor Vehicle Commission (NJMVC) is in the process of programming changes to implement the new fee. For ZEV registration renewals due between July 1, 2024, and November 1, 2024, that have already been mailed out to the customer, the ZEV owner will receive a supplemental notice with the additional fee due

Comrade Murphy is banging EV owners an additional $250 on top of the regular registration fee. In my case, that's $250 on top of $71.50 for a total of $321.50 for the 2017 Bolt. When the 2023 Bolt renews, that's $250 plus $84 for a total of $334. The EV fee also increases an additional $10 each year and stops at $290, for now. I already renewed the '17 in July for the $71.50, so I'm waiting for the bill for the additional $250. In 2028, I'll be paying $735.50 to register two cars.

 

Pennsylvania also has a $250 BEV fee now. Which is in line with what a typical car on the road these days in our fuel taxes for 15k miles. PHEVs pay 25% of that. Not finding anything for hybrids. Before this, plug in owners were suppose to be paying a fuel tax on kWh charged. That would have been less, as the rate was based on the gas tax and kWh per gallon, but it relied on people self reporting it.

What disappoints me is that we have an annual inspection requirement, so going per mile would not have been hard. PennDOT even looked into it.

 

EVs are exempt from inspection in NJ, but it's still included in the registration fee. Inspection consists of sitting in line forever and then plugging in for emissions tests.

 

So what’s the way to have fairness? I think it has to be miles driven for every type of vehicle plus weight class. How can that be done? Someone suggested annual inspections could be used to record miles driven. I would be driving a gas car in your state, such low reg fees. An ev would be out of the question since I drive so little.

 

How about changing the weight classes for starters. For example, a Cadillac Escalade weighs around 2000 lbs. more than my Bolt, but the registration fee was the same, until the $250 extra. That would be a good start.

 

They are just charging based on how it will be used, a station wagon. It's how Pa labels SUVs.

I say it should be done by what fleet the manufacturer puts it in for CAFE; car or truck.

 

And this is my gripe, everything over 3500 lbs. pays $84. It would be fairer if they did in levels. I see clickbait on how EVs are tearing up the roads with their weight. I'll bet a 6000 lb. "station wagon" is tearing up a lot more road than my Bolts.

 

Sample weight fees in my state, from $53 under 4,000 pounds, to $3110 at 105,500 pounds:

RCW 46.17.355: License fees by weight.

 

And my compact Ranger was far lighter than a friend's Tahoe, yet it paid the higher truck rate.

 

Wisconsin recently passed legislation establishing a 3 cent per kWh Consumption Tax for Retail sale public charging. ($0.30 per 10 kWh) It is designed to be equivalent to the state Gas tax which is $0.34 per gallon.

The Tax is earmarked specifically to support Public EV infrastructure expansion. That said the State is not allowed to own or operate public use EV chargers. They can only own or operate EV charging stations for state owned fleet vehicles. They can Lease state owned land to a Private Charge point network operator to place EV charging stations on public lands like Rest Areas.

Meanwhile, they didn’t repeal or reduce the previous EV surcharges imposed over the past 4 years. $175 BEV $75 Hybrid defined any vehicle which uses electric and gasoline

R controlled Legislature.


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