California Mileage Tax AB 1421: The Pilot, Rates, and Who Pays

California’s AB 1421 extends the state’s voluntary road usage charge pilot program by eight years, pushing its sunset from January 1, 2027 to January 1, 2035, and requires the California Transportation Commission to report its research findings and recommendations to the Legislature by January 1, 2027. The California mileage tax under AB 1421 is not a new tax and not a mandatory per-mile fee. The bill keeps an existing test program running longer. No California driver is required to pay a per-mile road charge because of it.

What the Bill Changes

The mechanics of AB 1421 are narrow. Existing law under SB 339 (2021) directed the California State Transportation Agency, in consultation with the California Transportation Commission, to run a road charge collection pilot. The statute authorizing that work was set to be repealed on January 1, 2027. AB 1421 replaces that repeal date with January 1, 2035, so the pilot’s legal framework survives long enough to keep collecting data and refining the model.¹

Alongside the extension, the bill requires the commission to submit a report on its research and recommendations to the Legislature’s policy and fiscal committees by January 1, 2027.² That report is what the next legislative debate will be built on.

What AB 1421 does not do is equally important. It does not set a per-mile rate. It does not make participation mandatory. It does not replace the gas tax. It does not add a charge on top of the gas tax. Any of those steps would require separate legislation.

Why California Is Testing a Per-Mile Charge

The state’s road maintenance budget leans heavily on the gasoline excise tax, which stood at 61.2 cents per gallon as of July 2025. As electric vehicles and high-efficiency hybrids grow as a share of traffic, that revenue base narrows even though those vehicles still use the roads. Zero-emission vehicle owners currently pay a $100 annual road improvement fee at registration, but that flat charge doesn’t scale with miles driven.³

A road usage charge bills drivers by distance traveled instead of by fuel purchased. California has been studying that model since 2014, when SB 1077 first directed the state to explore it. SB 339 in 2021 authorized the current pilot, which is the first in California’s history to test actual payment collection rather than simulated charges.

The Pilot AB 1421 Keeps Alive

The program AB 1421 extends is voluntary. SB 339 specifies that if any vehicle group other than state-owned vehicles is selected, participation must be voluntary.⁴ Drivers sign up; nobody is enrolled without consent.

The pilot is also designed to avoid double taxation. Participants pay a mileage-based fee during the study and receive a credit or refund for the estimated state fuel taxes they paid on gas during the same period. Electric vehicle owners get a prorated credit against the annual road improvement registration fee.⁴ The goal is revenue neutrality: the per-mile charges collected should roughly match what those same drivers would have paid under the existing gas tax system.

The pilot’s final report, covering cost issues, implementation methods, and a comparison of two fee-calculation approaches, is due to the Legislature by December 31, 2026.⁵

How the Per-Mile Rate Works in the Pilot

The pilot tests two rate structures. Participants are randomly assigned to one of two groups. One group pays a flat per-mile rate that applies equally to every vehicle. The other pays an individually calculated rate equal to the state gas tax divided by the vehicle’s EPA-estimated fuel economy, so less efficient vehicles pay less per mile and more efficient ones pay more.⁴

For the flat-rate group, the Road Charge Technical Advisory Committee recommended 2.8 cents per mile for the 2024–2025 pilot period, up from the initial 2.5 cents per mile. The increase accounts for inflation from fiscal year 2021–2022 through 2024–2025.⁶ These rates apply only to pilot participants. They are not a rate a general California driver pays.

How Mileage Is Reported and What the State Sees

The pilot offers several ways to report miles because no single method fits every driver.

A plug-in device that connects to the vehicle’s OBD-II port and records mileage automatically. Some versions track only total distance; others capture general location data to separate in-state from out-of-state miles.
Built-in vehicle telematics, where a factory-connected car transmits mileage directly without extra hardware.
A smartphone app that uses GPS or motion sensors, again with location-tracking and non-location versions available.
Manual odometer reporting, where drivers submit periodic photos or have readings verified in person.

Two of the automated options collect no location data at all, recording only total miles. Manual odometer reporting involves no electronic tracking. The tradeoff on manual methods is that they can’t automatically strip out miles driven outside California, so a driver who crosses state lines often could overpay unless they keep separate records.⁵

Privacy protections were baked in from the earliest study phase. SB 1077 required the Technical Advisory Committee to consider the need to protect personally identifiable information, the ease of re-identifying location data even after stripping personal details, and whether law enforcement or other agencies could access collected data.⁷

Will You Have to Pay a Per-Mile Fee?

Not because of AB 1421. The bill does not convert the pilot into a mandatory system. Moving from voluntary testing to a required per-mile charge for California drivers would take new legislation, and that legislation would need to answer questions the pilot is still working through: what the rate should be, how gas tax credits work at scale, which vehicles are covered, and how the collection system is administered.

The state’s interim report outlines a possible administrative structure that could eventually cover all 33 million registered passenger and commercial vehicles in California, likely through a phased rollout of 10 to 12 years after any enabling legislation passes. An alternative approach would apply the charge only to a subset of vehicles, such as zero-emission cars and trucks, which currently contribute the least to gas tax revenue. For commercial vehicles, the interim report suggests California could use the existing International Fuel Tax Agreement process already administered by the California Department of Tax and Fee Administration rather than building a new collection system from scratch.⁵

Even under an optimistic timeline, that 10-to-12-year phased rollout would put a fully mandatory system for all vehicles no earlier than the mid-2030s.

Equity Questions Still on the Table

A flat per-mile fee lands differently depending on where a driver lives and what they earn. Rural drivers typically log more miles for commuting, errands, and medical care because destinations are farther apart and transit is limited. Low-income drivers often own older, less fuel-efficient vehicles and already carry a heavier gas tax burden relative to income. Whether an eventual permanent system includes tiered rates, income-based credits, or exemptions for essential travel is one of the open questions the January 2027 commission report is expected to address.⁸

Key Dates

2017: California completed its first road charge pilot, which simulated per-mile charges for roughly 5,000 volunteers without collecting actual payments.
2021: SB 339 authorized the first pilot to test real payment collection.
2024: The live collection pilot launched, with participants paying 2.8 cents per mile and receiving credits for gas taxes paid.
December 31, 2026: Final report on the SB 339 pilot due to the Legislature.⁵
January 1, 2027: California Transportation Commission report on research and recommendations due to the Legislature’s policy and fiscal committees.²
January 1, 2035: New sunset date for the pilot program’s authorizing statute, established by AB 1421.¹

If you’re a California driver, the practical takeaway is short. AB 1421 changes nothing about what you pay today. It gives the state more time to study a per-mile alternative to the gas tax and requires a report to lawmakers in early 2027. Any decision to make that alternative mandatory would come later, in a separate bill, with its own debate.

1
California Air Resources Board. Assembly Bill 1421 (Wilson, Lori), Vehicles: Road Usage Charge Technical Advisory Committee
2
Digital Democracy. AB 1421: Vehicles: Road Usage Charge Technical Advisory Committee
3
Alternative Fuels Data Center. Zero Emission Vehicle (ZEV) Fee
4
LegiScan. California SB 339 2021-2022 Regular Session Chaptered
5
California State Transportation Agency. SB 339 Road Charge Collection Pilot – Interim Pilot Report
6
California Transportation Commission. Update on the Pilot Road Charge Rate for 2024-2025
7
California Department of Transportation. California Road Charge Pilot Program Final Report 2017
8
California Road Charge. Impacts to Key Communities