Victorian EV owners to receive road-user charge refunds, including interest

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Victoria’s Treasurer Tim Pallas has this morning confirmed the Victorian government will repay, with interest, those billed by the state’s Zero and Low Emission Vehicle road-user charge which was last month ruled unconstitutional.

In a high-profile ruling in October, Victoria’s High Court sided with two electric vehicle (EV) owners to strike down the Victorian government’s Zero and Low Emission Vehicle Distance-based Charge Act 2021. The court deemed the Victorian government’s tax on electric vehicles “invalid”, saying Australia’s Constitution enshrines that only the Commonwealth government has the power to enforce such taxes.

The Victorian Treasurer this morning said electric vehicle owners will receive their money back in the coming months with interest.

The Victorian government reportedly raised $3.9 million (USD 2.6 million) last financial year from the road-user charge, but treasury officials have said they expect to hand back about $7 million to taxpayers.

“We’ve even decided to be sufficiently generous, albeit that there isn’t an obligation to pay interest,” Treasurer Tim Pallas told reporters on Wednesday. “But we’ll pay interest on the retention of those funds.”

“We’re now going through the process of identifying who it is we need to rebate, and we’ll go through the process of making those returns.”

The legal battle around the EV road user charge was closely watched around Australia as other states were reportedly looking to legislate similar taxes. 

Hopes of such moves now appear moot with the High Court deeming the tax an “excise,” an inland tax on goods, that only the Commonwealth government has the power to apply, according to section 90 of the Constitution.

The High Court’s full October decision is available here.

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