- California is considering replacing its high motor fuel tax –– which sits at 68.1 cents per gallon, the nation’s highest –– with a mileage-based fee under the California Road Charge program. The goal is to address declining revenue caused by widespread electric vehicle (EV) ownership.
- Drivers would pay based on miles driven, with options like two cents per mile (e.g., $16.66/month for 10,000 miles annually in a 26 MPG car) or four cents per mile. The program aims to fund road maintenance equitably among gas-powered and EV drivers.
- A 2024 pilot program tested mileage recording methods such as tracking devices, odometer photos and in-vehicle software. The state is preparing to fully transition from gas-powered vehicles by 2035.
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California is exploring eliminating its national high motor fuel tax and replacing it with a new fee structure based on miles traveled. The proposal aims to shore up road funding by decreasing the motor fuel tax because of the state’s high electric vehicle ownership rate.
A gallon of gas in California is currently taxed at an average of 68.1 cents per gallon, the highest rate in the nation. The average driver pays around $300 a year in motor fuel taxes. EV owners, estimated to be more than a third of all commuters in California, don’t pay that tax. The state charges an annual fee on top of the vehicle registration.
California is one of several states that plan to phase out the ability to purchase gas-powered commuter vehicles by 2035. It would exacerbate the state’s current diminishing motor fuel tax revenue…