Electric and plug-in hybrid electric vehicles use Florida’s highway systems without paying highway fuel tax. Although electricity purchases collect consumption tax, they do not directly contribute to the State Transportation and Communications Trust Fund.
With the growing popularity of electric and plug-in hybrid electric vehicles, policymakers are encouraged to consider how market share affects states’ ability to invest in transportation infrastructure.
The latest report from the 2023 Florida Tax Watch Show found that Florida had nearly 255,000 registered EVs and 57,000 registered PHEVs.
EV and PHEV fees do not contribute taxes to the State Transportation and Communications Fund (STTF). Gallon of gasoline will donate 27.2 cents to the gas-powered vehicle STTF. EVS and PHEV pay sales tax at public billing stations, but do not pay taxes or fees exclusively for STTFs. According to the Florida Department of Transport (FDOT), an increase in EV market adoption by 1% can reduce STTF revenue by 0.5%, considering all transport revenue streams.
Without policy changes, STTF revenues may not reach 20% of forecast revenue in 2040 due to increased share of the overall automotive market. Based on the latest data, Florida Taxwatch estimates that EV usage has already reduced motor fuel tax revenues of between $46.4 million and $78.3 million per year.
Since 2020, Florida State Assembly members have considered charging registration fees for EVs and PHEVs in all sessions. None of the bills reached the floor. In 2025, four bills were introduced with the intention of redistributing a portion of the sales tax revenue to the STTF. The bill is a positive first step towards recapturing some of the lacking revenues and should be seriously considered with short-term solutions, but it cannot regain the “fair share” sentimentalized by the motor fuel tax.
“Policymakers need to explore how technology, business partnerships, or interstate coalitions can support a fair equity tax model,” said Dominic Calabro, president and CEO of Tax Watch.
Florida Tax Watches recommend:
Until a sustainable, long-term solution is developed, we will implement laws that will provide additional funding to STTFs and redistribute sales taxes on dates that will provide additional funding to STTFs.
Analyze the financial impact of imposing registration fees and EV taxes on charging stations to determine whether a combined approach is possible.
Hosted workshops with automakers determine the data available and how they can be used to create a more fairer tax code.
