TALLAHASSEE — On April 11, Florida TaxWatch released Fair Share Taxes Driven Away by Electric Vehicles. Florida TaxWatch undertakes this independent research project to better understand the impacts of increased market share of electric vehicles (EVs) and plug-in hybrid vehicles (PHEVs) on motor fuel revenues and to consider the strategies used by other states to address this problem.

Florida TaxWatch President and CEO Dominic M. Calabro said, “Electric vehicles and plug-in hybrid electric vehicles can cruise the state’s highway system without paying the Highway Fuel Tax. Although the purchase of electricity collects a sales tax, it does not directly contribute to the State Transportation Trust Fund. As electric vehicles and plug-in hybrid electric vehicles continue to grow in popularity, policymakers should consider how their market share affects the state’s ability to invest in transportation infrastructure.”

Florida TaxWatch Executive Vice President and General Counsel Jeff Kottkamp said, “Florida is one of the few states that has not implemented an alternative way to collect tax dollars from electric vehicle drivers. Given the legislature’s understandable aversion to increasing taxes, Florida TaxWatch considers the monthly redistribution from sales tax revenue to the State Transportation Trust Fund, as proposed in current legislation, to be a responsible first step.”

In 2023, Florida had nearly 255,000 registered EVs and 57,000 registered PHEVs, which is 2,097 percent (EVs) and 467 percent (PHEVs) greater than the number of registrations in 2016. In response to increases in affordability and quality, some projections expect EVs will comprise 40 to 50 percent of the total passenger car sales in the United States by 2030.

EVs and PHEVs charges do not contribute taxes to the State Transportation Trust Fund (STTF). For gas-powered vehicles, a gallon of gas contributes 27.2 cents to the STTF. Although EVs and PHEVs pay sales tax at public charging stations, they do not pay any taxes or fees that are dedicated to the STTF. According to the Florida Department of Transportation (FDOT), when factoring all transportation revenue streams, every one percent increase in EV market adoption could reduce the STTF revenue by 0.5 percent.

In the absence of policy changes, revenue for the STTF may fall short of projected revenues by up to 20 percent in 2040, due to EV and PHEV’s increasing share of the total car market. Based on most recent data, Florida TaxWatch estimates that EV usage has already reduced the motor fuel tax revenue between $46.4 million to $78.3 million, annually.

Every session since 2020, Florida legislators have considered imposing higher registration fees on EVs and PHEVs. None of the bills made it to the floor. In 2025, four bills were filed with the intention of redistributing a portion of sales tax revenue to the STTF. Although the bills are a positive first step to recouping some of the missing revenue – and should be seriously considered as short-term solutions – they fail to recapture the “fair share” sentiment once embodied by motor fuel taxes.

Policymakers need to explore how technology, business partnerships, or interstate coalitions can support a fair share tax model. Florida TaxWatch recommends the following:

1. Implement legislation that redistributes sales tax with a sunset date, providing the STTF with additional funds until a sustainable, long-term solution is developed.
2. Analyze the fiscal impact of imposing registration fees and EV taxes on charging stations, determining if a combined approach is possible.
3. Host workshops with automakers to determine what data is available and how it can be used to create a fairer tax code.

To learn more and access previous reports, go to: https://floridataxwatch.org/Research/Full-Library/Fair-Share-Taxes-Driven-Away-by-Electric-Vehicles