Minn. working group keeps 5¢/kWh excise tax, narrows scope and advances mileage-based option

The Minnesota Legislature’s Electricity-as-Vehicle-Fuel Working Group met Jan. 21, 2026, and voted to include a set of recommendations in its draft report: keep the 5¢ per kilowatt-hour excise tax on public EV charging, eliminate sales tax on electricity at public charging stations, broaden the excise tax to include Level 2 chargers, and endorse a voluntary mileage-based road-user charge as an alternative to the EV registration surcharge.

The chair, Johnson Stewart, opened the meeting and said the working group had 38 recommendations to consider and asked members to work through grouped proposals so staff could assemble a draft report for later review. Members voted on a series of discrete items and instructed staff to record how many members supported, opposed or abstained for each recommendation for inclusion in the final document to the legislature.

Why it matters: members framed the debate around two goals—maintaining constitutionally dedicated funding for roads and finding a fair, implementable way to capture revenue from electricity used as vehicle fuel. Supporters of keeping the excise tax argued it helps replace lost gasoline tax revenue and respects the constitutional direction to dedicate fuel taxes to the Highway Tax Distribution Fund. Opponents said the per-kilowatt-hour approach can burden renters and drivers who rely on public charging and risk 'triple taxation' when combined with sales tax and registration surcharges.

Key votes and outcomes (as recorded for the report):

- Adopt Johnson Stewart-1 (grouped recommendation): adopted (Austin reported 18 in favor). Provenance: SEG 319–SEG 436. - Require quarterly receipts from charging-station operators (Kwik Trip letter): adopted (14 in favor). Provenance: SEG 437–SEG 580. - Repeal 5¢ per kWh excise tax: motion failed (5 in favor, 11 against as reported). Provenance: SEG 586–SEG 1311. - Keep excise tax at 5¢/kWh: adopted (recorded in-roll as 8 in favor, 4 against; chair said final counts will be reconciled in the report). Provenance: SEG 1312–SEG 1419. - Tie the excise tax to inflation: adopted (9 in favor, 4 against). Provenance: SEG 1428–SEG 1541. - Eliminate sales tax on electricity at public charging stations: adopted (13 in favor, 0 against). Provenance: SEG 1555–SEG 1612. - Expand excise standard to include Level 2 chargers: adopted (11 in favor, 3 against, 6 abstentions). Provenance: SEG 1696–SEG 1833. - Clarify definition of 'public charging station' (amended to allow further study): adopted (10 in favor, 0 against, 10 abstentions). Provenance: SEG 1836–SEG 2346. - Voluntary mileage-based road-user charge (opt-in alternative to EV surcharge): included for report (7 in favor, 2 against, 11 abstentions). Provenance: SEG 2350–SEG 2736. - Continue state support for NEVI charging network (funding): adopted (14 in favor, 1 against, 5 abstentions). Provenance: SEG 2746–SEG 2936. - Establish a similar task force in five years to revisit technology and policy: adopted (16 in favor, 1 opposed, 3 abstentions). Provenance: SEG 2944–SEG 3092.

What members said: Fresh Energy’s Anjali Baines urged repeal of the excise tax to avoid what she called “triple taxation” for drivers who pay the EV surcharge, sales tax and a public-charging excise. Representative Elkins presented calculations showing a per-kilowatt-hour equivalent nearer 3–4¢ could match gasoline tax burden for many vehicles. John Pollard, representing the building trades, framed the excise tax as necessary to address long-term transportation-funding shortfalls: “we’re trying to fund our transportation system,” he said.

Implementation and next steps: the group instructed staff to compile roll-call results, feedback and letters received into a draft report for members’ review; one additional meeting was expected. Several members asked staff to note abstentions and passes so the final report would reflect the range of positions.

Votes at a glance (short form for inclusion in the working-group report): each entry in the official report will list the motion text, proposer, recorded yea/nay/abstain counts and the transcript provenance noted above.

Endnote: the working group repeatedly emphasized the difficulty of precisely measuring electricity used as vehicle fuel (noting high rates of home charging) and framed several of its recommendations as interim measures until metering technology or alternative mechanisms (for example, wholesale-level taxation or improved submetering) become practical.