Imposes additional annual registration fee for electric vehicles; reduces rate of highway fuel taxes; authorizes DOT to conduct alternative revenue feasibility study.
In a significant step, S2821 proposes a 33% reduction in the taxes imposed on highway fuels under the Motor Fuels Tax and the Petroleum Products Gross Receipts Tax, which are collectively referred to as gas taxes. These reductions, beginning in State Fiscal Year 2025, aim to alleviate financial burdens on traditional fuel users while concurrently encouraging the adoption of cleaner energy through the imposition of fees on electric vehicles. Given that revenues from gas taxes have been in decline due to shifts in consumer behavior and fuel efficiency, the bill also mandates a feasibility study to explore alternative revenue sources for the TTF, further addressing the ongoing funding concerns.
Senate Bill S2821 seeks to address the financing challenges for transportation infrastructure in New Jersey, aiming for a more equitable tax structure between electric vehicles and those that use traditional gasoline. The bill introduces an additional annual registration fee of $300 for passenger electric vehicles and $450 for commercial electric vehicles, effective July 1, 2025, with all collected fees deposited into the Transportation Trust Fund (TTF). This legislation acknowledges the growing prevalence of electric vehicles while ensuring that all vehicle owners contribute to road maintenance and infrastructure supports.
Notably, the bill's provisions for increased fees on electric vehicles have generated mixed reactions. Proponents argue that the fees will ensure fair financial contributions toward infrastructure from all vehicle users, while opponents express concerns over the financial implications for electric vehicle owners, especially given the already high costs associated with purchasing such vehicles. Additionally, the reduction in gas taxes may lead to concerns about adequately funding transportation infrastructure in the long term, particularly as the state relies on these taxes to fund essential transportation projects. The proposed feasibility study will look into various alternative revenue sources such as mileage-based fees and pollution taxes, further highlighting the ongoing dialogues around equitable taxation and environmental sustainability.