California to start pilot program for mileage-based tax for motorists

The state will also refund the participant's gasoline tax or EV registration fee at the end of the program.

According to media reports, the increasing number of EVs on the roads of California has started causing a dent in the state's budget.

The state charges $300 a year as gasoline tax for its ICE-powered vehicles, while EVs just pay a $100 annual registration fee. This has started to result in a major dent in the funds collected, used for the road's maintenance. Hence, the state has decided to replace the 'gasoline tax' with a new mileage-based tax system to offset the losses. As per officials, the state recorded 1.1 million electric cars and 1.3 million hybrids, back in 2022.

Lauren Prehoda, Spokesperson for Caltrans, mentioned that the annual cost of maintaining California's road networks is around $8.5 billion and that the vast majority of comes via gasoline taxes. Prehoda stated, "On average, Californians pay about $300 a year in state gas taxes. EVs have a $100 [annual] registration fee. That's a $200-million-a-year-loss."

As per the new system, California Road Charge will record the number of miles driven annually by motorists and tax them accordingly. The exact rate for the same though is yet to be fixed. However, a cost simulator lists three options: $0.02, $0.03 and $0.04 per mile.

Ahead of the introduction of the new tax system for motorists, the state has announced the start of a pilot program for the same. The pilot program is scheduled to start in August 2024, with officials selecting an unspecified number of applicants in July. Those who want to be part of the pilot program can sign up for the same on the California Road Charge website. The participants will then be asked to take monthly road charge payments between August 2024 to January 2025, after which they will need to fill out two surveys about their experience.

The state will also refund the participant's gasoline or EV registration fee at the end of the program. In addition, they will also give participants $400 in gift cards.

The data gathered at the end of the pilot program will help lawmakers determine whether or not the state should replace the gasoline tax.

Source: Autoblog