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California’s Mileage Tax Proposal: Inside the State’s Most Controversial Transportation Overhaul

  • Writer: Richard Sykes
    Richard Sykes
  • 2 days ago
  • 4 min read

ANTELOPE VALLEY, CA — California lawmakers are moving closer to replacing—or supplementing—the traditional gas tax with a mileage‑based tax, a system that would charge drivers for every mile they travel. Supporters argue the shift is necessary as electric vehicles reduce gas‑tax revenue, while critics warn it could burden working families, especially in rural regions. The proposal is not yet law, but the state’s actions signal a clear trajectory toward implementation.

What AB 1421 Actually Does

Assembly Bill 1421, authored by Assemblymember Lori Wilson, does not impose a mileage tax immediately. Instead, it directs state agencies to research, design, and recommend a full mileage‑based tax system, including how much to charge and how to collect the data. The findings must be delivered to the Legislature by January 1, 2027. 1

The bill builds on more than a decade of pilot programs and studies that began with SB 1077 in 2014. Those pilots tested ways for drivers to report mileage—ranging from odometer photos to devices that do not require GPS tracking. Participants did not pay real fees; they received simulated statements. 2

AB 1421 extends the state’s Road Usage Charge Technical Advisory Committee through 2035, ensuring long‑term oversight and development of the system. 3

Critics note that AB 1421 does not repeal the gas tax, raising fears that Californians could end up paying both.

Why California Is Considering a Mileage Tax

California’s gas tax—currently $0.61 per gallon—generates billions for road maintenance. But as electric and hybrid vehicles become more common, the California Transportation Commission projects a $31.3 billion revenue loss over the next decade. 1

Supporters of the mileage tax argue:

  • EV drivers pay little or no gas tax, despite using the roads.

  • Road maintenance costs are rising, and the funding gap is widening.

  • A mileage tax ensures all drivers contribute proportionally to road upkeep.

Assemblymember Wilson frames the issue as one of fairness:

“How do we ensure all motorists pay their fair share, no more and no less?” 1

Critics Warn of Double Taxation and Financial Burden

Opponents—primarily Republican lawmakers—argue the proposal is a hidden tax increase that will hit working families hardest.

Assemblymember David Tangipa, who represents rural areas where long commutes are common, called the proposal:

“A direct assault on everyday Californians in rural portions of California that own gas vehicles.” 1

Key concerns include:

Double Taxation

Critics note that AB 1421 does not repeal the gas tax, raising fears that Californians could end up paying both. Tangipa emphasized that nothing in the bill prevents a dual‑tax system. 1

Wilson has pledged to amend the bill to avoid double taxation, but no such language exists yet.

Cost to Families

Assemblymember Carl DeMaio warned that combining the gas tax, car registration fees, and a mileage tax could cost a two‑car household up to $4,200 per year. 1

Privacy and Tracking Concerns

Although the state insists GPS tracking would not be mandatory, critics argue that any system collecting mileage data risks:

  • Government overreach

  • Data breaches

  • Third‑party tracking

Pilot programs have offered non‑GPS options, but opponents remain skeptical. 2

Impact on Commuters in the Antelope Valley

Antelope Valley commuters face unique challenges under California's proposed mileage tax. Because these residents often drive longer distances for work, school, and essential services, a flat per-mile tax could disproportionately increase their transportation costs compared to urban drivers who travel shorter distances.

Key points include:

  • Longer Commutes Mean Higher Costs: Rural residents typically drive more miles daily, so the mileage tax could significantly raise their annual expenses.

  • Limited Public Transit Options: Unlike urban areas, the Antelope Valley has fewer public transportation alternatives, making it harder for residents to reduce driving.

  • Economic Impact on Working Families: Many rural households rely on personal vehicles for multiple jobs or family needs, so the tax could strain budgets, especially for lower-income families.

  • Potential Perception of Unfairness: Rural commuters may feel penalized for geographic necessity rather than choice, fueling opposition to the tax.

Overall, the mileage tax raises equity concerns for rural communities like the Antelope Valley, highlighting the need for careful policy design to avoid undue burdens on these essential commuters.

 A Decade‑Long March Toward Implementation

California’s movement toward a mileage tax has been gradual but deliberate:

  • 2014: SB 1077 launches the first statewide exploration of mileage‑based taxation.

  • 2016–2017: First pilot program tests reporting methods.

  • 2017–2024: Additional pilots refine the system.

  • 2025: AB 1421 introduced, shifting focus from exploration to execution.

  • 2026: AB 1421 passes its third Assembly reading, advancing toward the Senate. 1 2

The state is no longer asking whether a mileage tax is possible—it is determining how to implement it.

What Comes Next

If AB 1421 becomes law:

  • State agencies will finalize recommendations by January 2027.

  • Lawmakers could vote to enact a mileage tax as early as 2027–2028.

  • The gas tax could be reduced or replaced—but that remains uncertain.

  • New technology for mileage reporting would need to be deployed statewide.

The Bigger Picture

California is not alone. States like Oregon, Utah, and Virginia have already launched voluntary mileage‑based programs. But California—home to 30 million registered vehicles—would be the largest and most influential adopter.

The debate reflects broader questions about:

  • How to fund infrastructure in an EV‑dominated future

  • How to balance fairness with affordability

  • How much data the government should collect from drivers

Conclusion

California’s mileage tax proposal is still in the research phase, but the state’s direction is unmistakable. With billions in transportation revenue at stake, lawmakers are preparing for a future where drivers pay for road use not at the pump, but by the mile. Whether this shift becomes a model for the nation—or a cautionary tale—will depend on how the state addresses concerns about cost, privacy, and fairness in the years ahead.




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