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Minnesota working group weighs mileage charges, public charging tax and higher EV registration surcharges
Summary
A legislative working group heard presentations and stakeholder views on options to replace lost gas-tax revenue — including mileage-based user fees, a public fast-charging excise tax and higher EV registration surcharges — and debated equity, privacy and administrative tradeoffs.
State Senator Anne Johnson Stewart convened the Electricity as Vehicle Fuel working group on Oct. 27, 2025, to consider how Minnesota should fund roads as electric vehicles (EVs) replace gasoline-powered cars. Representative Steve Elkins, who has proposed a mileage-based road-user charge for EVs, told the group three main options remain on the table: higher flat registration surcharges, an excise tax on electricity dispensed at public (non-residential) charging stations, or a mileage charge collected via odometer or manufacturer telemetry.
Elkins argued an EV mileage charge best matches a user-pays principle: the more you drive, the more you pay. He described administrative approaches used elsewhere — telemetry vendors such as SmartCar and third‑party administrators like Emovis — and cited industry and academic studies that found current in‑vehicle charging meters are too variable to rely on for taxation. Elkins gave an example calculation for an electric Ford F‑150 Lightning and said equivalent mileage rates would be tied to the gas tax and average vehicle MPG to keep revenue neutral.
The nut of the debate centered on precision, privacy, cost and equity. Elkins and others said mileage collection can be done without trip-level tracking and could be voluntary; critics stressed collection costs and complexity. Stakeholders asked whether meters, vehicle telemetry or smartphone apps are the most cost-effective route and how to prevent double taxation if a driver pays both a mileage charge and a per-kWh public-charging tax. Elkins and others said a properly designed system would avoid double charging: owners would either pay the registration surcharge or opt into a mileage program, not both.
Drive Electric Minnesota and Fresh Energy urged caution about overly large flat surcharges that could skew incentives and slow adoption. Carolyn Berninger of Drive Electric Minnesota noted EVs remain a small share of Minnesota’s fleet and said poorly designed fees risk undermining climate and public-health goals. Anjali Baines of Fresh Energy highlighted grid benefits from overnight, off-peak charging and cited analyses showing EVs can provide net utility revenues and public-health benefits when paired with low-carbon electricity.
Questions from members and online participants highlighted distributional concerns: renters and multifamily residents who lack home charging could face higher costs if public charging is taxed; rural drivers and out‑of‑state visitors raise enforcement and apportionment questions; and collectors asked how collection costs (SmartCar quoted roughly $5 per collection in testimony) would affect net revenue. Elkins and stakeholders recommended further analysis and pilots to refine vendor pricing, privacy safeguards under the Minnesota Consumer Data Privacy Act, and equity protections for people without home charging.
The working group will take additional information at future meetings; Chair Johnson Stewart encouraged members to provide suggestions for future witnesses and agreed to follow up on technical and equity questions raised during the session.
