Electric vehicles have never been more relevant. Since 2015, the global share of new passenger EVs has increased every year by an average of 50%. In the US alone, Q4 2021 EV sales jumped up 72%, year-over-year, the best quarter for EV sales in the US by far.
As EVs continue to grow in popularity, and sales continue to climb, consumers and companies alike will have an increasing number of questions around EV tax exemptions, rebates and title-and-registration needs.
While many of these areas continue to evolve, the title-and-registration team at ACERTUS has been closely monitoring these changes – both at the federal and state levels. The team has compiled some of the most important points surrounding EVs, fees and title-and-registration requirements to help companies navigate these rapidly changing standards.
What to Know: Tax Exemptions
For many individuals and organizations, tax exemptions are a huge incentive to purchase new EVs. Currently, there are 45 US states, as well as the District of Columbia, that provide incentives to those who own EVs or plug-in hybrid electric vehicles (PHEVs), either through a specific utility operating in the state or via state legislation. Incentives range from tax credits and rebates to fleet acquisition goals, exemptions from emissions testing and utility time-of-use rate reductions. One of the most common incentives is a price reduction for those who charge electric cars during off-peak hours, such as utility companies offering lower off-peak pricing per every kilowatt-hour.
The state of California encourages EV adoption through the Clean Vehicle Rebate Program (CVRP). Under the CVRP, there is $7,000 in tax incentives available for those who purchase or lease a battery electric vehicle (BEV), PHEV or fuel-cell electric vehicle (FCEV). The program effectively gives out rebates on a first-come, first-serve basis and helps to offset the initial cost of investing in low-emission vehicles (LEVs) and zero-emission vehicles (ZEVs).
Additionally, California has a set of regulatory policies called the Advanced Clean Air Program, which mandates that car manufacturers must sell a certain number of LEVs and ZEVs each year. So far, the District of Columbia and 12 states have adopted California’s Advanced Clean Air Program – Colorado, Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Virginia, Vermont and Washington. Other states are currently working through the regulatory process and may soon adopt similar standards.
Beyond state-level EV incentives, the US federal government currently offers up to $7,500 in tax credits for EVs and PHEVs built in or after 2010, depending on the battery capacity of the vehicle. And while the Biden Administration’s proposed Build Back Better legislation has not passed through the Congress at this time, if it does pass and become law, available federal EV tax credit amounts will increase from $7,500 to $12,500 – which would give both consumers and companies even more reason to adopt EVs.
What to Know: Title and Registration & Compliance on Heavy CMVs
When it comes to titling and registering EVs, requirements are still evolving. Providers that offer title-and-registration services like ACERTUS are closely watching what develops at the federal level, as well as state by state.
Currently, many aspects of titling and registering EVs and PHEVs are nearly the same as titling and registering fuel-based vehicles. One area that’s notably different is when it comes to special fees that apply to EVs and PHEVs. Many US states are putting these fees in place to address lower gas tax revenues and create more equity among drivers of different types of vehicles.
At the moment, twenty-eight different US states have laws requiring a special registration fee for EVs, and of those, 14 states also assess a separate, slightly lower fee for PHEVs. Fees can range from about $50 per year in states like Colorado, South Dakota and Hawaii to $225 per year in Washington. Some states, like Oklahoma, uses a tiered EV-fee system based on vehicle weight, with a flat fee of $110 for EVs under 6,000 pounds. Typically, revenue from these additional EV and PHEV registration fees is used toward state transportation funds. However, a few of these states also allocate fee revenue to supporting EV charging infrastructure.
However, special registration fees aren’t the only way states are working to address lower gas tax revenue and equity between drivers. Many states have, are moving forward with or are considering, pieces of legislation that deal with road user charges (RUCs). Seven states – Maine, Nevada, New Mexico, Oregon, Utah, Virginia and Washington – have laws that pertain to RUCs (also called Vehicle Miles Traveled fees or Mileage-Based User Fees). RUCs are a funding mechanism that helps to more closely link transportation taxes to the use of roadways by a driver, in lieu of more traditional fuel taxes.
An RUC funding model requires drivers to pay based on miles driven, instead of gallons of fuel used. Certain states, like Oregon and Utah, actually allow drivers to participate in a RUC program instead of paying special registration fees for EVs and PHEVs. Additionally, the federal government has been supportive of these state RUC programs via the Surface Transportation System Funding Alternatives (STSFA) grant program, which awards grants to states that enact RUCs.
In a similar vein, compliance on heavy, electric commercial motor vehicles (CMVs) is still evolving. While EVs do not take fuel, many states in the US still require them to have International Fuel Tax Agreement (IFTA) stickers and follow IFTA standards. This will likely change over time, particularly as EVs become more popular and an increasing number of electric CMVs are produced. Those with large commercial EV fleets must also track mileage and stay on type of any applicable Heavy Use Taxes (HUT) and Weight/Mile Taxes, if they’re operating in states where those apply, just as they would with fuel-based fleets.
How an Expert Partner Can Help
While the fleet title-and-registration process can be time-consuming and complex – particularly when it comes to handling this work for EVs and PHEVs in a rapidly changing environment – expert providers like ACERTUS can help. Although the responsibility for utilizing EV and PHEV tax exemptions ultimately falls on each respective company, once that company sends updated and complete information over to ACERTUS, its title-and-registration team will make sure all paperwork is up-to-date, consistent and accurate before sending it off to the relevant state (or multiple states). ACERTUS can also help maintain client records on tax numbers and tax-exemption forms, keeping all forms on file for each of its partners.
Outside of helping companies stay on top of EV and PHEV tax exemptions, the title-and-registration team at ACERTUS can certainly help companies with EV and PHEV registrations, renewals, titling, title vaulting, state transfers, replacement credentials, refinancing, lien-holder changes, overpayment refunds and tax returns, duplicate titles and more. Additionally, ACERTUS has a designated compliance team that can assist companies with EVs and PHEVs stay on top of IFTA, Department of Transportation (DOT) requirements and any relevant HUT and Weight/Mile Taxes. This compliance team can also help oversee Driver Qualification (DQ) file management, driver training files and toll and transponder fees.
ACERTUS is the only full-scale, tech-enabled automotive logistics platform designed to move, store, recondition and title and register finished vehicles – whether they’re fuel-based, electric or hybrid. With a transformative combination of technology, people and experience, ACERTUS delivers a proven, complete and start-to-finish service, turning logistics into a competitive advantage for automakers, fleets, retailers and anyone looking to move vehicles.
ACERTUS wants to be your EV and PHEV title-and-registration partner, as well as help with your fleet operations. Get a breakdown of our full range of vehicle-logistics services – including transportation, fleet maintenance, reconditioning, compliance, storage and more – at https://acertusdelivers.com. To connect with one of our team members, get a quote or learn more about how ACERTUS can help with vehicle fleet management, contact us here or call us at: 855-ACERTUS (855-923-2655).
