Working group weighs Minnesota’s new 5¢/kWh excise, Virginia mileage pilot and operator concerns

The Electricity-as-Vehicle-Fuel Working Group on Nov. 20, 2025 heard federal, state and industry perspectives as it prepares recommendations for the 2026 legislative session.

Assistant Commissioner Scott Cummings of the Virginia Department of Motor Vehicles described Virginia’s multi-step response to declining fuels-tax revenue, explaining that “Virginia has been using taxes on motor fuels to fund transportation for over 100 years,” and that rising vehicle fuel efficiency—not only electric vehicles—threatened that revenue. He said Virginia deployed short-term measures (indexing the gas tax, a highway-use fee) while running a mileage-based user-fee pilot called Mileage Choice to gather operational experience.

Why it matters: Minnesota faces the same structural problem as other states—fuel-efficiency gains reduce pumpside revenue even as mileage rises—so Virginia’s blend of near-term adjustments and a pilot to test per-mile billing provides a practical model for implementation and stakeholder outreach.

Jeremy Neapman, a supervisor in the Minnesota Department of Revenue’s Petroleum Tax Unit, summarized the statute the legislature enacted this year. “It creates a 5¢ per kilowatt hour of electricity delivered to at a public charging station,” Neapman said, adding the excise applies only to public charging stations with capacity of 50 kilowatts or more and that public charging station operators (owners/operators who sell electricity as fuel for profit) are responsible for remitting the tax. Neapman said operator licensing will begin on Jan. 1, 2027, licenses will be renewed annually, and a legacy-charger exemption applies to chargers installed before Oct. 1, 2023 that lack metering until Jan. 1, 2032.

The Department of Revenue also flagged implementation choices that will affect revenue flows: Minnesota’s sales-and-use tax currently applies to electricity as vehicle fuel unless law is changed, meaning receipts could go to the general fund rather than the highway fund unless statutory direction is added. Agency staff recommended clarifying a federal-government exemption in statute to ensure constitutional compliance and said filing frequency and legacy-charger definitions are practical issues that could change fiscal projections.

Industry and operator testimony focused on costs, competitiveness and consumer experience. Adam Schwartz, EV charging program manager for Kwik Trip, said NEVI and related federal funding were essential: “NEVI funding…brought up to 80% of the cost” for many sites, and he estimated DC fast sites cost roughly $750,000–$1,000,000 each to build. Kwik Trip said simplifying reporting and mirroring petroleum administration would reduce operator burden and urged parity so that DC fast chargers are not competitively disadvantaged by divergent tax treatments for lower-capacity public chargers.

Advocacy groups raised timing and grid-cost concerns. Angelie Baines of Fresh Energy noted that DC fast charging imposes greater grid stresses than level-2 charging and cautioned that excise timing should not hamper a nascent public-charging market. Industry and advocates also discussed receipts and transparency: Kwik Trip said it embeds taxes in its retail kWh price rather than listing an excise line item on customer receipts.

Data gaps and projections: participants debated how many public sites meet the 50 kW threshold. Estimates referenced in the meeting ranged from a few dozen to roughly 500 qualifying sites; Department of Revenue staff said earlier revenue projections assumed many chargers would qualify as legacy exemptions and that updated counts could increase projected excise receipts.

Process and next steps: the chair asked members to submit informal feedback by the working group’s Dec. 1 meeting and said a Dec. 15 session is scheduled; the group aims to finish recommendations before the start of the legislative session. The chair emphasized that the working group will collect data, hear additional state models (Utah was suggested) and deliberate trade-offs among revenue, market development and operator burden.

Formal actions: the working group approved its Oct. 27 meeting minutes by voice vote at the start of the session.

What to watch: how Minnesota resolves the sales-tax/excise interaction, the final count of 50 kW+ public chargers, the licensing design for operators starting Jan. 1, 2027, and whether the working group recommends any adjustments to exemptions, filing frequency or metering requirements before implementation.