Sponsors (3)
The bill establishes a new federal tax on EVs and batteries to create a steady funding stream for highways and transit, trading more reliable infrastructure funding for higher EV prices, potential slower EV adoption, disproportionate burdens on lower-income buyers, and added business compliance costs.
Drivers, transit riders, and taxpayers: revenues from a new federal tax on EVs and batteries will be transferred into the Highway Trust Fund to pay for roads and transit projects, supporting transportation infrastructure and workers.
Taxpayers and local governments: making EV and battery sales receipts subject to appropriation creates a predictable federal revenue stream for highway and transit funding.
Buyers of electric vehicles: purchasers will face higher up-front costs because an added federal tax on EVs and batteries applies to sales after Dec 31, 2025.
Lower- and middle-income households: using EV sales as a revenue source may be regressive, causing these buyers to bear a disproportionate share of the tax burden.
Consumers and the environment: higher EV prices could slow consumer adoption of electric vehicles, delaying greenhouse gas emissions reductions and consumer savings on fuel and maintenance.
Based on analysis of 2 sections of legislative text.
Creates a new federal tax on sales of electric vehicles and batteries and directs receipts to the Highway Trust Fund.
Imposes a new federal tax on the sale of electric vehicles and batteries and directs the revenue to the Highway Trust Fund for highways and roads. The tax is added to the Internal Revenue Code as a new chapter and its receipts are explicitly counted as transfers to the Highway Trust Fund for sales after December 31, 2025. The Act establishes a short title and updates the Internal Revenue Code table of parts and the Highway Trust Fund receipt sources to include the new tax. It does not show the detailed tax rate or base in the provided text, but makes the statutory change to collect and route those revenues beginning with sales after the 2025 cutoff date.
Official title: Amend the Internal Revenue Code of 1986 to establish a tax on the sale of electric vehicles and batteries.
Introduced February 12, 2025 by Debra Fischer · Last progress February 12, 2025