Oregon Launches EV Rebates Funded by Auto Sales Tax

Oregon is one of five states that has no sales tax, but that will change on January 1, with Gov. Kate Brown's signature on a landmark transportation funding bill that applies a half-cent sales tax to auto sales and increases gas taxes by 10 cents.

2 minute read

September 1, 2017, 2:00 PM PDT

By Irvin Dawid


Democratic Gov. Kate Brown embarked on a two-day, statewide tour on Aug. 28 to promote the signing of landmark transportation funding package. The bill, HB 2017, includes a much-talked about bike tax, first in the nation; a 10-cents gas tax increase, and a 0.5 percent motor 'vehicle privilege' tax that funds a new Zero-Emission Incentive Fund to fund two rebate programs.

By relying on the privilege tax, the Electric Vehicle (EV) Rebate Program takes a much different funding approach than a controversial bill in California which uses cap-and-trade auction revenues paid by all major emission sources to supplement the existing California Clean Vehicle Rebate Project.

In some ways, the privilege tax takes a direct approach, unlike California, somewhat similar to a 'feebate" with the major exception that electric vehicles are also subject to the tax. In Norway, which has the highest market penetration per capita of electric vehicle sales, EVs are not subject to a sales tax of 25 percent nor a *registration tax.

Depending on the battery size, consumers who purchase an electric vehicle with a retail price less than $50,000 are eligible to receive a rebate up to $2,500, similar to the current California program.

The program goes further by establishing a "Charge Ahead Oregon Program" that establishes additional rebates up to $2,500 to low and moderate income residents who retire their high-emission vehicles and purchase new or used EVs.

The first $12 million annually of privilege tax revenue goes to the Zero-Emission Incentive Fund. Remaining funds are transferred to the Connect Oregon Fund, as are revenues from the $15 excise tax paid by those who purchase bicycles costing more $200 and with a wheel diameter of 26-inches or larger. Revenues from the bike tax are restricted to funding bicycle/pedestrian infrastructure 

*For more elements of the comprehensive transportation package, see July post after HB 2017 passed the legislature. Note the EV registration fee, also described by Green Car Report's John Voelcker.

As for the four states where one can purchase motor vehicles and pay no sales taxes after January 1, they would be Montana, Alaska, New Hampshire and Delaware.

Monday, August 28, 2017 in Planetizen

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