Sponsors (5)
The bill raises dedicated highway funding by taxing EVs and batteries, improving infrastructure financing but increasing costs for EV buyers, potentially slowing EV adoption and imposing compliance burdens on small sellers.
Drivers and taxpayers will see increased funding for highways and bridges because a new targeted excise on electric vehicles and batteries directs revenue to the Highway Trust Fund.
People who buy electric vehicles and batteries will face higher purchase costs due to the new excise tax after 12/31/2025, raising out‑of‑pocket expenses for prospective EV owners.
Higher EV prices are likely to slow adoption of electric vehicles, which could increase long‑term fuel costs and pollution by delaying the shift away from fossil‑fuel vehicles.
Small dealers, installers, and businesses that sell or install EVs and batteries may incur additional administrative and compliance costs from the new IRS tax provision.
Based on analysis of 2 sections of legislative text.
Imposes a federal tax on sales of electric vehicles and batteries and directs the revenue to the Highway Trust Fund.
Introduced February 12, 2025 by Dustin Johnson · Last progress February 12, 2025
Imposes a new federal tax on the sale of electric vehicles and batteries and directs the revenues to the federal Highway Trust Fund. The change is added to the Internal Revenue Code as a new provision (section 4091) and takes effect for sales after December 31, 2025. The law updates the tax code table clerically and amends the list of revenue sources that are transferred to the Highway Trust Fund to include receipts from the new electric-vehicle-and-battery sales tax. Specific tax rates or collection mechanics are not specified in the provided summary.