What is a Vehicle Miles Traveled Tax?

By: Shelia Dunn, Communications Director for the National Motorists Association
Most experts agree that the way America funds infrastructure is broken. Many of our roads are in terrible shape. The Highway Trust Fund is nearly empty. Many local governments have difficulty paying for year-round road maintenance. A discussion of the VMT tax.

Most experts agree that the way America funds infrastructure is broken. Many of our roads are in terrible shape. The Highway Trust Fund is nearly empty. Many local governments have difficulty paying for year-round road maintenance.

The reasons vary. The federal and state gas taxes have never been adjusted for inflation. Many states divert funds to use for other purposes such as transit and education. Automakers, the federal government, and at least one-third of state governments are pushing electric vehicles, which means no gas tax from those owners. Is a road user charge or a vehicle miles traveled tax the answer?

A VMT tax means that anytime you drive, you will be taxed by the mile. As soon as you leave your driveway and come back again, you will be assessed for every mile you drive. This also would likely be in addition to the federal and state tax you pay per gallon of fuel at the pump unless you are operating an electric vehicle.

How the government will assess that fee is still up in the air. It could be a monthly charge based on vehicle tracking, which means some sort of GPS-based monitoring. Your ‘privilege of driving fee’ could be paid yearly at the same time as your license plate renewal is due and after a vehicle inspection. (How intrusive and expensive would that be?)

Other road user charges might come into play too. If drivers are tracked by location and time of day, they could easily be hit with a traffic congestion surcharge. Portland, Oregon, is currently running a VMT experiment through the end of the summer on how this might work.

Auto privacy would also be a problem. Motorists would likely be tracked wherever they travel. Driving to a different state or even a different county might mean you pay different fees based on local assessments.

Whatever the case, the solution to assess a fee will not be as easy as paying at the gas pump as we do now.

Meeting climate goals to reduce vehicle emissions has prompted several states such as California and Minnesota to work on various schemes to reduce vehicle miles overall. A road user fee would likely be used as a stick to get us out of our cars (especially if the gas tax is retained for internal combustion-engined vehicles, creating double taxation against most drivers).

Rural Americans, in particular, would feel the brunt of a VMT tax. Just as rural broadband programs have been difficult to implement, rural vehicle electrification will be costly if not impractical.

The NMA has always supported the gas tax as the most practical and equitable method for funding highway infrastructure. Electric vehicle owners could be charged an annual amount covering their fair share of road and bridge upkeep.

A VMT tax would add billions of government administrative costs annually, open the door for the double taxation of most vehicle owners, create privacy issues for all motorists, and disadvantage rural communities. 

Written By: Shelia Dunn, Communications Director for the National Motorists Association

2 Comments

  1. Guy Olsen

    Why does the VMT tax appear to be the only solution being considered to offset reduced gas tax proceeds, due to widespread EV usage?

    Unless I’m mistaken, at charging stations, EV users pay based on the amount of power they use. So, there is no reason why electricity used to charge EVs cant be taxed at the charging station like gas is at the pump. This is not even new technology; pretty much every building in the country already has it — an electric meter.

    The one stumbling block would be how to assess the tax when charging at home. The answer lies in the special connector and power supply, which EV charging requires — it could include a separate meter, with the power utility assessing the tax. Alternatively, EV users could pay a flat fee, at registration renewal that would cover home charging.

    So there IS a potential alternative to the VMT tax — one that would obviate the need for intrusive vehicle tracking.

    Reply
    • Jim R Jeffrey

      Hi Guy, I agree . If you want an EV, fine. However, Its not right to create another tax to subsidize an up and coming trend
      EV’s are coming, ready or not. The additional taxes being considered should apply to the electric car owner and not tacked on to overtaxed gas powered car owner.

      Reply

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