Senate approves transportation package that cuts gas tax, adds fee on high-speed EV charging

The Utah Senate on the floor passed third substitute House Bill 301 on a 19–5 vote, cutting the state motor fuel tax by 2¢ per gallon, capping the rate at 34.5¢ per gallon and creating a new tax on certain public electric-vehicle (EV) charging stations while increasing vehicle registration fees.

“Therefore, this bill goes through and reduces the gas tax by 2¢ per gallon, adjusts and locks in the rate to 34.5¢ per gallon,” Senate sponsor Senator Harper said during floor remarks, and later described the EV surcharge as targeted mostly at high-capacity (Level 3) chargers along interstates and travel corridors. The sponsor said the changes broaden the payer base and stabilize transportation funding over time.

The bill also adds an electricity sales tax-like surcharge on commercial charging stations that provide paid, high-rate charging, while exempting home charging and low-power units. Harper said the Legislature patterned the approach on laws recently adopted in states such as Oklahoma and Kentucky and that deposits into registration fees will help maintain rural B and C roads.

Several senators questioned whether the EV surcharge effectively taxes out‑of‑state drivers who use interstate fast chargers. “Is this designed to tax interstate travelers?” asked Senator Bullen, expressing concern about the message and whether the charge targets nonresidents. Harper replied the surcharge is intended largely for Level 3 chargers commonly sited by interstates and travel hubs and said lawmakers may consider a credit for Utah residents in a future session.

Senator Kwan pressed whether the proposal would create double taxation for EV drivers—owners, operators and consumers could face overlapping charges. “There is a statewide sales and use tax, municipal energy taxes in some places, and then this would be another tax on top,” the sponsor acknowledged, saying local taxes vary by municipality and could result in layered charges in some locations.

Supporters emphasized rural impacts. Senator Owens said small, sparsely populated counties with extensive B and C road mileage will receive additional registration-fee dollars to help preserve local road networks. Senator Kennedy noted the bill is not revenue neutral in the initial years but said sponsors expect it to become neutral by year three and slightly increase revenues by year five.

The Senate’s roll call recorded 19 yeas and 5 nays; the bill will be signed by the president pro tempore and returned to the House for further consideration.

What’s next: the bill will return to the House; sponsors said they may revisit residency credits or related offsets in a future session after monitoring the bill’s initial implementation and fiscal impacts.