Madison County has 2,300 registered electric vehicles today, according to county License Director Mark Craig, and the answer to the payment question is largely “no” – unless the vehicle is a hybrid model also using gasoline.

The Huntsville Area Metropolitan Planning Organization (MPO) recently announced $421 million in planned road improvements for I-565, the Northern Bypass, U.S. 231, and the Arsenal East Connector.

These improvements are to catch up to rapid growth in the Huntsville area. Besides that metro growth, thousands of residents from surrounding counties and towns such as Decatur, Fayetteville, Tenn.; New Market and Cullman commute to Huntsville daily on Alabama roads during the work week.

More than 80 percent of Alabama state tax revenues are earmarked, the most of any state, according to research by Troy University economics professor Dr. Daniel Sutter. And highways are funded by earmarked gasoline taxes.

“Electric vehicles do not use gas (unless a hybrid model), hence there are no proportional gas tax collections from these electric vehicles users to assist in funding transportation infrastructure,” Shane Davis, Director of Urban and Economic Development in Huntsville, said this week.

A key word there is “proportional.” The Rebuild Alabama Act of 2019 did levy an additional “registration” fee of $200 for each new electric battery vehicle and $100 for each plug-in hybrid electric vehicle. Those additional fees increased by $3 in 2023 and will increase by $3 every four years. According to the Alabama Department of Revenue, the first $150 collected from the annual license tax and registration fee from each battery electric vehicle and the first $75 collected from the annual license tax and registration fee on each plug-in hybrid electric vehicle is to be distributed as follows:

• 66.67% State
• 25% Counties

“The remainder is deposited into the Rebuild Alabama Fund,” the revenue department says.

Meanwhile, Alabama has a gasoline tax rate of 31.20 cents per gallon, according to the Tax Foundation which ranks it 39th among the 50 states in terms of tax rate on gasoline. That money does pay for road improvements.

Alabama and the Tennessee Valley Authority (TVA) also help government and non-government entities build the charging infrastructure for electric vehicles.

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