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States Move to Tax Vehicle Mileage

NewLettersBrace yourself for another tax that may be coming your way: State and federal officials are now looking to tax vehicle mileage via a little black box.

The box would transmit the mileage you drive to a collection agency that would then use that information in order to tax your driving.

The idea has been met with quiet resistance in Washington, but some states are already embracing the plan — and say it’s the method of choice for funding much-needed road and highway infrastructure fixes.

And because of funding gaps, it appears the idea may actually get off the ground (via the LA Times).

The push comes as the country’s Highway Trust Fund, financed with taxes Americans pay at the gas pump, is broke. Americans don’t buy as much gas as they used to. Cars get many more miles to the gallon. The federal tax itself, 18.4 cents per gallon, hasn’t gone up in 20 years.

And because federal politicians dislike raising the gas tax even a little, states and even cities are looking to make the move without the U.S. government’s involvement.

The most eager is Oregon, which is enlisting 5,000 drivers in the country’s biggest experiment. Those drivers will soon pay the mileage fees instead of gas taxes to the state. Nevada has already completed a pilot. New York City is looking into one. Illinois is trying it on a limited basis with trucks. And the I-95 Coalition, which includes 17 state transportation departments along the Eastern Seaboard (including Maryland, Pennsylvania, Virginia and Florida), is studying how they could go about implementing the change.

In 2012, the U.S. Senate greenlit a $90-million pilot project but House leadership killed it, saying too many constituents’ lives involved logging extra miles to and from work.

Leaders also expressed privacy concerns about tracking the number of miles a person uses on a daily or monthly basis.

The ACLU of Nevada recently released a statement about the proposal, stating that the black box devices could be turned into tiny tracking devices.

Still, as long as that concern can be abated, look for mileage taxing to come up very soon.

“People will be more willing to do this if you do not track their speed and you do not track their location,” said Ryan Morrison, chief executive of True Mileage, a company using the technology to help states in the pilot programs. “There have been some big mistakes in some of these state pilot programs. There are a lot less expensive and less intrusive ways to do this.”

Article printed from InvestorPlace Media, https://investorplace.com/ipm_invpol/states-move-tax-vehicle-mileage/.

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