Bill Summary
The "Fair Sharing of Highways and Roads for Electric Vehicles Act of 2025," commonly referred to as the "Fair SHARE Act of 2025," proposes a new tax on the sale of electric vehicles (EVs) and their associated battery modules. This legislation amends the Internal Revenue Code of 1986 by introducing a tax of $1,000 on each electric vehicle sold and $550 on each battery module weighing over 1,000 pounds, intended for use in electric vehicles. The aim of this tax is to generate revenue that will be transferred to the Highway Trust Fund, thereby ensuring that the growing number of electric vehicles contributes to the maintenance and development of highway infrastructure. The tax will take effect for sales made after December 31, 2025. This legislation seeks to create a more equitable allocation of transportation funding as the automotive landscape shifts towards electric mobility.
Possible Impacts
The "Fair Sharing of Highways and Roads for Electric Vehicles Act of 2025" (or "Fair SHARE Act of 2025") introduces a tax on the sale of electric vehicles (EVs) and their batteries. Here are three examples of how this legislation could affect people:
1. **Increased Purchase Costs for Consumers**:
- With the imposition of a $1,000 tax on each electric vehicle and a $550 tax on battery modules over 1,000 pounds, the overall cost of purchasing an electric vehicle will increase significantly. This could deter potential buyers who are considering making the switch to EVs, particularly those who are sensitive to price changes. As a result, the growth of the electric vehicle market may be slowed down, affecting the transition to cleaner transportation.
2. **Impact on EV Manufacturers and Supply Chains**:
- Manufacturers of electric vehicles and their components may face increased costs due to the new taxes, which could lead to higher retail prices or reduced profit margins. Companies might respond by increasing the prices of their vehicles, cutting back on production, or even reconsidering their investments in electric vehicle technologies. This could impact jobs within the EV manufacturing sector and associated supply chains, potentially leading to layoffs or shifts in employment patterns.
3. **Funding for Infrastructure Development**:
- The revenue generated from this tax will be transferred to the Highway Trust Fund, which is used for maintaining and developing road infrastructure. This could lead to improved road conditions and infrastructure enhancements, benefiting all drivers, including those who continue to use traditional gasoline or diesel vehicles. However, the effectiveness of this funding in addressing infrastructure needs will depend on the total revenue generated and how effectively these funds are allocated and utilized.
In summary, while the legislation aims to create a fairer system for funding infrastructure, its immediate effects could lead to higher costs for consumers and manufacturers and potential shifts in the market dynamics of electric vehicles.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1253 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 1253
To amend the Internal Revenue Code of 1986 to establish a tax on the
sale of electric vehicles and batteries.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 12, 2025
Mr. Johnson of South Dakota (for himself and Mr. Taylor) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish a tax on the
sale of electric vehicles and batteries.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Sharing of Highways and Roads
for Electric Vehicles Act of 2025'' or the ``Fair SHARE Act of 2025''.
SEC. 2. TAX ON SALE OF ELECTRIC VEHICLES AND BATTERIES.
(a) Imposition of Tax.--
(1) In general.--Subchapter A of chapter 32 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new part:
``PART IV--ELECTRIC VEHICLES AND BATTERIES
``Sec. 4091. Tax on Electric Vehicles and Batteries.
``SEC. 4091. TAX ON ELECTRIC VEHICLES AND BATTERIES.
``(a) Battery Module.--There is hereby imposed a tax equal to $550
on each battery module with a weight of greater than 1,000 pounds which
is--
``(1) sold by the manufacturer, producer, or importer
thereof, and
``(2) intended for use in an electric vehicle.
``(b) Electric Vehicles.--There is hereby imposed a tax equal to
$1,000 on each electric vehicle sold by the manufacturer, producer, or
importer thereof.
``(c) Definitions.--In this section--
``(1) Battery module.--The term `battery module' has the
same meaning given such term in section 45X(c)(5)(B)(iii).
``(2) Electric vehicle.--
``(A) In general.--The term `electric vehicle'
means a light-duty vehicle which satisfies the
requirements under section 30D(d)(1)(F).
``(B) Exception for hybrid vehicles.--The term
`electric vehicle' shall not include any motor vehicle
which draws propulsion energy from onboard sources of
stored energy which are both--
``(i) an internal combustion or heat engine
using consumable fuel, and
``(ii) a rechargeable energy storage
system.
``(3) Light-duty vehicle.--The term `light-duty vehicle'
means a motor vehicle, as defined in section 30D(d)(2), which
has a gross vehicle weight rating of less than 8,500 pounds.''.
(2) Clerical amendment.--The table of parts for subchapter
A of chapter 32 of the Internal Revenue Code of 1986 is amended
by adding at the end the following new item:
``PART IV--ELECTRIC VEHICLES AND BATTERIES''.
(b) Transfer of Revenue to Highway Trust Fund.--Section 9503(b)(1)
of the Internal Revenue Code of 1986 is amended--
(1) in subparagraph (D), by striking ``and'' at the end,
(2) by redesignating subparagraph (E) as subparagraph (F),
and
(3) by inserting after subparagraph (D) the following new
subparagraph:
``(E) section 4091 (relating to tax on electric
vehicles and batteries), and''.
(c) Effective Date.--The amendments made by this section shall
apply to sales after December 31, 2025.
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