Reduced Alternative Fuel Vehicle (AFV) License Tax

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 January 1, 2022, and 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, 28-5801, 28-5805)

Jurisdiction: Arizona

Type: State Incentives

Enacted: Apr 25, 2018

Amended: Jun 7, 2019

Technologies: EVs, Hydrogen Fuel Cells, Natural Gas, PHEVs, Propane (LPG)

See all Arizona Laws and Incentives.