Two electric car owners are gearing up for a battle in the High Court in Canberra today, as they take on a road-user tax imposed on drivers of electric vehicles (EVs) in Victoria.

The levy, introduced in Victoria in July 2021, charges road users based on how much they travel.

Depending on the type of car, drivers can be charged about 2 cents per kilometre, which must be declared by the owner after the annual registration period.

But today drivers Christopher Vanderstock and Kathleen Davies will cry foul, urging the High Court to strike out the law on the basis the state does not have the power to impose the charge.

At the heart of the matter is whether the charge amounts to an excise or not, because under the constitution only the Commonwealth can impose an excise charge.

All the states and territories have lined up together supporting Victoria’s right to impose the charge.

But the drivers have a powerful ally in the Commonwealth.

Both argue the Zero and Low Emission Vehicle Distance based Charge Act, known as the ZLEV charge, imposes a tax on goods.

“An excise is in essence a tax on some step taken in dealing with goods,” the Commonwealth submissions said.

“The tax … is calculated by reference to the quantity of the consumer’s usage of a ZLEV. It imposes an excise.”

The case is a continuation of a long battle in the High Court over the definition of an excise.

All the states argue the Commonwealth is on the wrong track, that the charge is not an excise, because it is not imposed on any goods, but rather an activity.

The Queensland submissions suggested the tax does not meet any of the criteria defining an excise which include a tax on goods that is imposed before consumption and which alters the price of the goods.

Today outside court, the lawyer representing Mr Vanderstock and Ms Davies, David Hertzberg, said the tax was a “cash grab”.

“What our clients believe is that governments should be doing everything they can to encourage people to make the switch to electric vehicles, which are better for the environment and better for our health,” Mr Hertzberg said.

“So this case is about challenging Victoria’s electric vehicle tax which is an obstacle to reducing emissions and improving air quality.

“The fuel excise is levied by the federal government, not the states, so there’s no shortfall as far as Victoria is concerned — this tax is just a cash grab.”

That view is backed by others.

“Whatever its outer limits, an excise must at least be a tax on ‘goods’,” the Northern Territory’s submissions said.

There is a lot at stake for the states as the uptake of electric vehicles picks up momentum.

But the case may have wider implication for all levels of government, as the High Court is asked to draw the line on what can and cannot be taxed by the states.

The case comes as all states, territories and the Commonwealth work towards increasing the number of electric cars on Australia’s roads.

Late last year the federal government introduced the Electric Car Discount with further measures to be delivered as part of the National Electric Vehicle Strategy.

Extracted in full from: High Court to hear challenge against Victoria’s electric vehicle tax, determine if levy is unconstitutional – ABC News