Lawmakers May Tax Mileage Instead of Fuel

January 15, 2009
Filed under Trailer News

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The National Commission on Surface Transportation Infrastructure Financing is considering
higher taxes to maintain highways and other infrastructure. According to the American Road
and Transportation Builders Association, the federal gas tax has been unchanged since 1993,
and nearly half the states have not raised their taxes since 1997. However, lawmakers are
concerned that more fuel-efficient vehicles such as hybrids and electrics will reduce fuel
tax revenues. As a result, several states are testing ways to tax drivers for miles driven,
instead of how many gallons of fuel they bought. Extra could also be charged for rush-hour
driving. Ohio, Pennsylvania, Florida, Colorado and Minnesota have discussed ways to change
the tax method and in an Oregon pilot program, 300 vehicles were fitted with GPS
transponders that communicate wirelessly with filling-station pumps, allowing drivers to
pay a mileage tax instead of a fuel tax. Officials say that the GPS devices do not track
vehicle locations in great detail, but can determine when a driver had left certain areas,
including state lines. Idaho and Rhode Island have considered systems that would require
drivers to report their mileage when they register vehicles. North Carolina suggested
charging motorists a quarter-cent for every mile as a substitute for the fuel tax.
Officials say the changeover would be gradual, with devices installed in new vehicles, as
retrofitting vehicles is too expensive, so older vehicles would continue to pay fuel taxes.
Some drivers are concerned about privacy, while others say the tax eliminates a financial
incentive for more fuel-efficient vehicles.

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