Victoria residents who previously paid the state’s unconstitutional tax on electric vehicles (EVs) will soon receive their money back, along with interest, according to Treasurer Tim Pallas. The tax, aimed at collecting funds from EV drivers to support road infrastructure, generated $3.9 million in the last fiscal year.

The Victoria government is currently determining which drivers are eligible for the tax refund. EV owners can expect reimbursement within the first half of 2024.

The Age estimates that the government will return approximately $7 million. Additionally, the government has decided to pay interest on the retained funds.

Victoria had previously levied an EV tax of two cents per kilometre driven. The tax was designed to offset the loss of revenue arising from EV drivers not paying petrol taxes.

Two Victorian EV owners challenged the tax in court, arguing that only the federal government can implement excise taxes on the consumption of goods. In mid-October, the High Court of Victoria agreed, declaring the tax to be unconstitutional.

The High Court’s ruling will prevent other states from levying similar taxes. New South Wales and Western Australia had been planning to implement EV user charges.

The Victorian EV tax received heavy criticism from Australia’s EV industry. According to Behyad Jafari, the CEO of the Electric Vehicle Council, the government failed to consult the industry before imposing the tax.

In spite of its stated goal of achieving net zero emissions by 2045, the Victoria government has recently done a poor job of encouraging EV adoption. In addition to implementing the EV user tax, the government ended its $3,000 EV rebate last June. Originally, the government had promised that the rebate would be available until May 2024.

Image Source: The Driven