New Jersey legislators sent a bill to the governor’s desk March 18 that would place a $250-a-year fee on zero-emissions vehicles, brushing aside criticism from environmentalists and car dealers that the fee would hinder electric vehicle sales. 

The Senate voted 24-14 to approve the bill, A4011, which would revise the New Jersey Transportation Trust Fund Authority Act to increase revenue to help support state transportation infrastructure and mass transit expenses. The state Assembly voted 48-28 to support the bill, which includes an increase in the state gas tax and revises the way in which it is levied. 

Gov. Phil Murphy’s (D) office did not immediately respond to an inquiry as to whether the governor would sign the bill. 

Starting July 1, 2024, buyers of zero emissions vehicles would pay $250 a year to $290 a year when a vehicle is registered initially or is renewed. The fee in the first year would be $250, rising $10 a year until it reaches $290 a year in the fourth year, and stops increasing. Buyers would have to pay the fee for four years at once, for an upfront payment of more than $1,000. 

Supporters see the bill as a way to increase investment in state transportation and to secure revenue from EVs and other zero-emission vehicles that otherwise might not contribute because they don’t pay the gas tax. But opponents said the fee — coupled with Gov. Murphy’s plan to make EV buyers pay state sales tax, from which they currently are exempt — would hamper EV sales. (See NJ Bill Would Levy Annual Fee on EV Ownership.) 

“Clearly, the state’s aggressive EV mandates are on a collision course with our fiscal realities,” said James Brian Appleton, president of the New Jersey Coalition of Automotive Retailers. 

“No one disputes the notion that EV drivers must pay their fair share to maintain roads and bridges or that some form or some amount of user fee must be paid,” he said. “Consumers will not react well to this and shrinking EV incentives. And adding more than $1,000 to the upfront purchase price of a new electric car will render the governor’s goal of 100% EV sales in New Jersey unachievable.” 

Doug O’Malley, state director for Environment New Jersey, said the bill — if Murphy signs it — would give the state one of the highest EV fees in the nation. He said the bill, which was introduced March 4, has moved like “greased lightning” through the Legislature. He speculated the sponsors wanted to get it approved before the state budget season begins in earnest in the next few weeks. 

“This is a real setback for EV drivers. This is essentially a $1,000 tax that could well dissuade potential EV drivers from making the switch,” he said, adding it’s an upfront fee that gas vehicle buyers don’t have to pay. 

“It’s the opposite of a pay-as-you-go system,” he said. “No one pays the gas tax upfront for four years.”