This bill proposes significant updates to the current statutes regarding the taxation of alternative fuel vehicles in Arizona. Under current law, there is no use fuel tax imposed on alternative fuels, which is set to change with the new legislation. The bill introduces a use fuel tax for alternative fuel vehicles, specifying different tax rates based on the type of fuel used and the class of the vehicle. For example, light motor vehicles powered exclusively by electricity will pay an annual fee based on a calculated ratio, while heavy-duty vehicles will have a tax based on kilowatt hours consumed or gas gallon equivalents, depending on the fuel type.

Additionally, the bill removes existing exemptions for alternative fuels from the use fuel tax, thereby aligning the tax obligations of alternative fuel vehicle operators with those of traditional motor fuel users. It also includes definitions for terms such as "usable diesel gallon equivalent" and establishes a legislative intent to ensure equitable taxation for highway use and maintenance. The enactment of this bill requires a two-thirds majority vote in both houses of the legislature and will take effect immediately upon the governor's signature.

Statutes affected:
Introduced Version: 28-5606