How would a per-mile fee be calculated to replace rather than supplement state gas taxes?
Executive summary
A per-mile fee designed to replace, not supplement, state gas taxes would be calculated by converting current and projected gas-tax revenue into a cents-per-mile rate, then adjusting for vehicle class, credits for gas taxes already paid, and collection method costs; states and pilots have already produced concrete rate examples (e.g., ~1–3¢/mile in several studies and pilots) and mechanisms for crediting fuel taxes [1] [2] [3]. The core choices are arithmetic (total revenue ÷ total taxed miles), measurement (odometer self-report, telematics, or transponder), and policy adjustments to address equity, heavy-vehicle impacts, out-of-state travel and administrative costs [4] [5] [6].
1. Convert the revenue target into a per-mile price: total revenue divided by taxable miles
The basic calculation is straightforward on paper: take the transportation revenue that the state now raises from gas taxes (and any portion intended to be replaced) and divide that dollar figure by the total number of miles driven by the taxed vehicle fleet in the same period to produce a cents-per-mile rate (a VMT or MBUF approach) — the Tax Foundation and multiple state studies describe this conversion as the fundamental step in replacing per-gallon taxes with per-mile charges [7] [8]. Practical examples from reporting and opinion pieces show illustrative rates in the low cents per mile range—for instance Oregon’s voluntary program near 1.9¢/mile, Caltrans pilots around 2.5–3¢/mile, and opinion calculations suggesting 1.1–1.9¢/mile for passenger vehicles and much higher rates for heavier vehicles like buses [1] [2] [9].
2. Decide which miles count and how to measure them: odometer, telematics, or hybrid reporting
States have tested multiple measurement systems: simple annual odometer self-reports at registration renewal (low tech, lower collection cost), automated telematics or in-vehicle devices that report miles (higher cost and privacy concerns), and photographic or remote methods used in pilots [5] [6] [2]. Washington and Axios reporting explain crediting of gas taxes already paid by participants, refunding those amounts against the per-mile charge so the fee truly replaces, rather than piles on top of, the gas tax [6]. Pilots and calculators (Pennsylvania, California) explicitly let users set a hypothetical per-mile rate and compare charges to current fuel taxes, demonstrating how the measurement choice changes billing cadence and administrative load [4] [10].
3. Differentiate by vehicle class, weights and special use to match road wear and equity
A straight flat per-mile rate ignores vehicle weight and axle effects; authoritative commentaries and state analyses recommend tiered rates so heavier trucks and buses pay more per mile—examples range from modest passenger car cents to multiples for delivery trucks and buses in illustrative calculations [1] [7]. States like Oregon and pilots have used different schedules and noted interstate freight reporting systems could be adapted to allocate and assess charges for commercial vehicles, preserving the principle that those who cause more road damage pay more [1].
4. Account for collection costs, credits, exemptions and anti-double-tax rules
Replacing the gas tax requires rules to prevent double payment: pilots and state proposals include automatic credits for gas taxes already paid and deductions for off-road or out-of-state miles [6] [3] [10]. Collection costs matter: gas-tax collection is low-cost today, while mileage programs can add administrative and technology expenses—state estimates for odometer reporting put costs at roughly 4–6% of revenues while automated options raise costs [5] [11]. Reasoned policy design therefore folds collection costs into the per-mile rate or finances them separately so net replacement revenue meets budget needs [11].
5. Political design: pilots, voluntary phases, and who bears the burden
States are using pilots, voluntary opt-ins for EVs, and phased rollouts to test public acceptance and calibrate rates; Washington, California, Oregon and others have run or proposed pilots that included incentives, credits and privacy protections to reduce opposition [6] [2] [9]. Opposition frames the fee as a new tax on driving and raises equity concerns for rural and low-income drivers, while proponents point to fairness across fuel types and long-term sustainability as gasoline sales decline [12] [13]. The legal and political choice to “replace” requires explicit statutory crediting of gas taxes and transparent rate-setting tied to revenue needs; without that, a per-mile fee risks becoming a supplement rather than a substitute [6] [10].