California is actively piloting and considering the potential implementation of a mileage tax or “user pay” system to test if this is a viable alternative to the current gasoline tax. This is primarily a result of the increase in electric vehicles (EVs), making drivers purchase less gasoline overall.
The purpose of this is to lessen the financial burden of gas car drivers, ensuring that all vehicles pay equally: gas, electric, and hybrids. Rather than imposing a tax based on per gallon, drivers would pay a set tax per mile driven.
California’s gas revenue is meant for roadway maintenance, public transit, transportation projects, and the upkeep of infrastructure. A portion of this is also used for additional costs in environmental programs such as the Cap-And-Trade program and the Low Carbon Fuel Standard.
California’s Assembly Bill (AB) 1421 passed the Assembly with a 49-21 vote and was read for the first time by the Senate on January 29, 2026. The bill is currently under review by the Rules Committee for further consideration.
AB 1421 is an extension and continuation of the efforts from the existing Senate Bill (SB) 339. SB 339 was an extension and expansion of the previous SB 1328, both of which derived from the original framework of SB 1077, advancing the goals in creating a more realistic pilot program and researching other transportation funding mechanisms.
SB 1077 established the Road Charge Technical Advisory Committee (TAC) and the development of a pilot program to evaluate a road usage charge as an alternative to the current gas tax. SB 339 is unique and served more as an execution phase of this study since it was the first to require an active road usage charge (RUC) pilot program, testing voluntary, actual revenue collection rather than based solely on simulations.
The TAC works under and supports the California Transportation Commission (CTC). In essence, AB 1421 extends the operations of the TAC until January 1, 2035 and requires the CTC to submit a final report on the potential mileage-based road usage fee to the Legislator by January 1, 2027. This bill only authorizes a study, not an actual establishment or implementation of a mileage tax.
“This is a commuter punishment aimed squarely at working families who have no alternative but to drive. A mileage tax would mean: Tracking how far Californians drive, Charging drivers per mile, on top of: Gas taxes, Vehicle registration fees, Sales taxes, Local transportation taxes. Families already paying thousands a year just to get to work would be hit again — even as our roads remain riddled with potholes and congestion,” said Supervisor Jim Desmond.
California is expensive as it is, and the mileage tax proposes an overwhelmingly high cost for average and low-income families. Many families have parents who must drive far distances to drop off their children to school or just go to work.
“California does not have a revenue problem. It has a spending problem. The state already collects more than enough money to maintain and repair our roads — even with more electric vehicles on the road. Instead, we’ve watched: $24 billion spent on homelessness with little accountability, $9 billion spent on healthcare for people here illegally, Billions more lost to failed programs, bloated bureaucracy, and mismanagement,” said Desmond.
Additionally, many families may be forced to have their children drive, accumulating the costs to merely drive and get to places, especially for large families. Although this is meant to promote tax equality for those who drive gas fueled vehicles, this hinders drivers who must make large commutes.
“But that also means longer drives, because housing closer to job centers has become completely unaffordable for most middle-class families. Driving here isn’t a luxury. It’s a necessity…A per-mile tax wouldn’t just hit families — it would raise the cost of doing business for anyone who drives for work. Those costs don’t disappear. They get passed on to consumers, making everything more expensive,” said California State Senator Suzette Martinez Valladares in The Signal.
There are also privacy concerns and fear of government overreach if a law such as this were actually proposed and passed. Many fear that the storage of detailed driving data could be potentially misused.
If passed, they insist that they would ensure that programs would comply with strict privacy standards such as the California Consumer Privacy Protections Act (CCPPA). However, these would offer limited, if any, protections since it would likely fall under statutory exemption, meaning that they would have to create separate privacy protections to safeguard driving data.
Additionally, it invites scrutiny of if drivers would have to pay for the Global Positioning System (GPS) device and installment, possibility for individuals to tamper or disable this technology and potential punishments that follow, and if it would become a condition of vehicle registration and enforced through registration renewal systems.
It also raises the question of what a mileage tax entails for non-residents and visitors. Residents from neighboring states like Nevada often make short commutes in California. They would most likely struggle to accurately report the miles they drove, potentially have the costs of rental cars increase, whether they would pay a standard fee just to drive, if they would have privacy protections, and much more.
The TAC previously recommended the inclusion of out-of-state motorists during a meeting back in 2015 expressing extensive assessments and several alternative options which can be found here. The issue was again inquired during an Assembly Committee on Transportation hearing on January 12, 2026 requiring the CTC to prepare and submit a report that includes regional and state solutions that include out-of-state vehicles.
California State Representative Carl DeMaio and the Reform California movement have created a petition in order to oppose the potential California mileage tax.
“The typical California driver with an average drive of 15,000 miles a year will be forced to pay $900-1200 a year in higher taxes just to drive on poorly maintained freeways they already paid for with the original gas and sales tax,” according to Reform California.
To calculate an approximate cost of what a driver would spend if a tax similar to this were enforced can be found here.
