Electricity Laws and Incentives in Arizona

The list below contains summaries of all Arizona laws and incentives related to electricity.

Laws and Regulations

Alternative Fuel Vehicle (AFV) Dealer Information Dissemination Requirement

New motor vehicle dealers must make information about AFVs and Arizona-based incentives for purchasing or leasing AFVs available to the public. For the purpose of these requirements, alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas.

(Reference Arizona Revised Statutes 1-215 and 28-4414)

Alternative Fuel Vehicle (AFV) Special License Plate

The Arizona Department of Transportation (ADOT) must issue a special license plate or sticker to dedicated AFVs. Dedicated AFVs include vehicles powered exclusively by propane, compressed natural gas, electricity, hydrogen, or a blend of hydrogen with propane or natural gas. AFVs may not be capable of operating on any other fuel type. There is no limit to the number of AFV license plates ADOT can issue. The Arizona Department of Environmental Quality (ADEQ) must inspect vehicles converted to operate solely on alternative fuel and issue an Alternative Fuel Certificate before converted vehicles may receive the AFV special plate or sticker. State or agency directors who conduct activities of a confidential nature and use AFVs are exempt from the requirement to display an AFV special license plate. For more information, see the ADOT Specialty Plates website.

(Reference House Bill 2887, 2025 and Arizona Revised Statutes 1-215 and 28-2416)

Electric School Bus Purchase Authorization

School districts may establish contracts for vehicles and other transportation services as an alternative to maintaining and operating a transportation program. A school district may select a pre-approved or private contractor that:

• Provides electric school buses, electric school bus infrastructure, charging and charging management services, or electric school bus services; and,
• Is approved by the Arizona School Bus Advisory Council.

(Reference Arizona Revised Statute 15-923)

Electric Vehicle (EV) Definition and Implementation Plan

The Arizona Corporation Commission (Commission) defines EVs as transportation vehicles that use electricity for propulsion. The Commission issued an EV policy statement that provides guidelines on EVs, charging infrastructure, and transportation electrification to utilities the Commission regulates. The policy addresses the state of EVs in Arizona, EV benefits, and barriers to adoption. This policy purposefully does not define the Commission’s role with respect to EV charging infrastructure operated by non-utilities at this time, but the Commission will explore it in the future. For more information, see the Commission’s EV policy statement and the Corporation Commission website.

(Reference Docket RU-00000A-18-0284 decision number 77044)

Electric Vehicle (EV) Parking Space Regulation

An individual is not allowed to stop, stand, or park a motor vehicle within any parking space specifically designated for parking and charging EVs unless the motor vehicle is an EV and has been issued an alternative fuel vehicle special plate or sticker. Violators may be subject to a civil penalty of at least $350.

(Reference Arizona Revised Statutes 28-876)

Federal Fleet Operation Regulations

Federal fleets based in Arizona that operate primarily in counties with a population of more than 1.2 million people must be comprised of at least 90% alternative fuel vehicles. Alternatively, federal fleets may meet acquisition requirements through alternative fuel use or apply for waivers. For the purpose of these requirements, alternative fuels include propane, natural gas, electricity, hydrogen, qualified diesel fuel substitutes, and a blend of hydrogen with propane or natural gas.

(Reference Arizona Revised Statutes 1-215 and 49-573)

Joint Use of Government Fueling Infrastructure

To the extent practical, an Arizona state agency or political subdivision that operates an alternative fueling station must allow vehicles, other state agencies, or political subdivisions to fuel at the station. For the purpose of this requirement, alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas.

(Reference Arizona Revised Statutes 1-215 and 49-572)

Public Utility Definition

A company that sells electricity for the purpose of electric vehicle charging is not considered a public service corporation. Companies may charge a flat or time-based fee for this electricity.

(Reference Arizona Revised Statutes 40-213)

School Transportation Advisory Council

The Student Transportation Advisory Council must advise the Arizona Department of Administration on increasing public safety, transportation efficiencies, and transportation options related to modernizing and innovating K-12 student transportation. Recommendations may include electric transportation and charging infrastructure.

(Reference Arizona Revised Statute 28-3053)

State Incentives

Alternative Fuel Vehicle (AFV) Parking Incentive

An individual driving a dedicated AFV may park without penalty in parking areas that are designated for carpool operators, provided the vehicle is using alternative fuel. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas.

(Reference Arizona Revised Statutes 1-215 and 28-877)

Alternative Fuel and Alternative Fuel Vehicle (AFV) Use Tax Exemption

Arizona use taxes do not apply to natural gas or propane used in an AFV, AFVs converted to operate on alternative fuels, or the equipment used to convert a diesel vehicle to an AFV. Recognized alternative fuels include propane, natural gas, electricity, hydrogen, and a blend of hydrogen with propane or natural gas.

(Reference Arizona Revised Statutes 1-215 and 42-5159)

Arizona's National Electric Vehicle Infrastructure (NEVI) Planning

The U.S. Department of Transportation’s (DOT) NEVI Formula Program required the Arizona Department of Transportation (ADOT) to submit an annually updated EV Infrastructure Deployment Plan (Plan) for fiscal years 2022 through 2026 to their FHWA Division Office, describing how the state intended to distribute NEVI funds and their physical and cybersecurity strategies, and including a Community Engagement Outcomes Report. The submitted plans must address updated NEVI Guidance.

For more information about Arizona’s NEVI planning process, see the ADOT Arizona Electric Vehicle Program website.

Reduced Alternative Fuel Vehicle (AFV) License Tax

For AFVs purchased by December 31, 2022, the vehicle license tax for an AFV registered in Arizona is $4 for every $100 in assessed value. The minimum amount of the annual AFV license tax is $5. AFV assessed values are determined as follows:

• For AFVs initially registered between before December 31, 2022, the assessed value of the AFV is 20% of the manufacturer’s suggested retail price (MSRP);
• For each succeeding year, for the purpose of calculating the license tax, the assessed value of the AFV is reduced by 15% from the value from the preceding year.

For the purpose of this tax, AFVs include those powered exclusively by propane, natural gas, electricity, hydrogen, or a blend of hydrogen with propane or natural gas. For more information, see the ADOT AFV website. The reduced alternative fuel vehicle license tax does not apply to any vehicle purchased on or after December 31, 2022.

(Reference Arizona Revised Statutes 1-215 and 28-5805)

Zero Emission Vehicle Emissions Test Exemption

Electric vehicles registered in Arizona are not required to complete annual emissions testing. All alternative fuel vehicles, excluding electric and hydrogen vehicles, used to commute into Phoenix or Tucson are required to be emissions tested before they are registered. For more information, visit the Arizona Department of Environmental Quality website.

(Reference Arizona Revised Statutes 49-541, 49-542 and 49-542.05)

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