Sponsors (3)
The bill directs more Highway Trust Fund revenue to roads and transit—benefiting motorists and state/local projects—but pays for it with a new tax on electric vehicles that raises costs for EV buyers and businesses and may slow EV adoption while adding IRS administrative burden.
Motorists, middle-class families, state and local governments, and taxpayers: receive increased Highway Trust Fund revenue dedicated to roads and transit, which should support more federal funding for highway and transit projects and upkeep.
Buyers of electric vehicles, battery purchasers, and small businesses that buy or sell EVs: will face higher purchase and fleet/operating costs because of a new tax on EVs starting Jan 1, 2026, raising prices for consumers and businesses.
Drivers, transportation workers, and the general public: higher EV prices could slow EV adoption, potentially postponing emissions reductions and increasing gasoline consumption compared with expected EV uptake.
IRS and Treasury staff and federal administration: will incur additional tax administration and implementation burdens to create and collect a new chapter in the tax code, adding workload and enforcement complexity.
Based on analysis of 2 sections of legislative text.
Imposes a federal tax on sales of electric vehicles and batteries and directs revenue to the Highway Trust Fund, effective after Dec 31, 2025.
Creates a new federal tax on the sale of electric vehicles and their batteries and directs the revenue to the federal Highway Trust Fund. The tax applies to sales after December 31, 2025, and is added to the Internal Revenue Code so the IRS collects and transfers the receipts to highway funding.
Introduced February 12, 2025 by Debra Fischer · Last progress February 12, 2025