Bill Summary
The "Fair Sharing of Highways and Roads for Electric Vehicles Act of 2025," also known as the "Fair SHARE Act of 2025," proposes amendments to the Internal Revenue Code of 1986 to establish a new tax on the sale of electric vehicles (EVs) and their battery modules.
Key provisions of the legislation include:
1. **Tax Imposition**:
- A tax of $1,000 will be levied on each electric vehicle sold by manufacturers, producers, or importers.
- A tax of $550 will be imposed on each battery module weighing over 1,000 pounds intended for use in electric vehicles.
2. **Definitions**:
- The act defines "electric vehicle" as a light-duty vehicle that meets specific criteria, excluding hybrid vehicles that rely on both an internal combustion engine and a rechargeable battery.
3. **Revenue Allocation**:
- Revenue generated from these taxes will be transferred to the Highway Trust Fund, which supports the maintenance and development of the nation's highways and roadways.
4. **Effective Date**:
- The new taxes will apply to sales occurring after December 31, 2025.
Overall, the legislation aims to ensure that electric vehicle users contribute to infrastructure funding, similar to traditional fuel taxes, in a growing market for electric mobility.
Possible Impacts
Here are three examples of how the "Fair SHARE Act of 2025," which establishes a tax on the sale of electric vehicles and batteries, could affect people:
1. **Increased Cost for Consumers**: The imposition of a tax of $1,000 on electric vehicles and $550 on battery modules will increase the overall purchase price for consumers. This may deter some potential buyers from choosing electric vehicles, thereby slowing the adoption of environmentally friendly transportation options. Families or individuals on tight budgets may find electric vehicles less accessible, potentially leading to a continued reliance on traditional gasoline-powered cars.
2. **Impact on Electric Vehicle Manufacturers**: Manufacturers of electric vehicles and batteries will face additional costs due to this new tax. This could lead to higher retail prices as companies pass on the tax burden to consumers. As a result, manufacturers may also need to reassess their pricing strategies, production costs, and profit margins, which could impact their competitiveness in the market. Companies might also reduce investment in research and development for electric vehicle technology, hindering innovation.
3. **Funding for Infrastructure**: The revenue generated from this tax will be transferred to the Highway Trust Fund, which supports the maintenance and development of highways and roads. This could lead to improved infrastructure that benefits all drivers, including those who own electric vehicles. However, some may argue that electric vehicle owners are already contributing to road maintenance through fuel taxes and might see this as an unfair additional burden, especially if they feel that their taxes are not being equitably reinvested in electric vehicle infrastructure, such as charging stations.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 536 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 536
To amend the Internal Revenue Code of 1986 to establish a tax on the
sale of electric vehicles and batteries.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 12, 2025
Mrs. Fischer (for herself, Mr. Ricketts, and Ms. Lummis) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
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.
<all>