California Per-Mile Tax: Rates, Reporting, and Gas Tax Overlap

There is no mandatory California per-mile tax on drivers today. The state has been testing a mileage-based road charge through voluntary pilot programs since 2016, and the final report on the most recent pilot is due to the legislature by December 2026. The program is designed to eventually replace the gas tax as more Californians drive electric and fuel-efficient vehicles, but no law currently requires you to pay a per-mile fee, and no bill on the table sets a date for making one mandatory.

Why the State Is Looking at a Per-Mile Charge

California pays for road maintenance mostly through its gasoline excise tax, which sits at $0.612 per gallon as of mid-2025.¹ Every gallon you buy includes that tax, and the revenue funds highway repairs and local road projects. The problem is simple. As cars get more efficient and electric vehicles skip the pump entirely, less gas gets sold, and the money available for roads shrinks. A per-mile charge would tie road funding to actual driving rather than to fuel purchases.

Where the Program Stands Right Now

Senate Bill 1077, signed in 2014, created a Road Usage Charge Technical Advisory Committee to study alternatives to the gas tax.² That committee ran an initial pilot in 2016 and 2017 with about 5,000 volunteer drivers who tested mileage-reporting methods without actually paying real charges.

Senate Bill 339, signed in 2021, authorized a second and more advanced pilot focused on genuinely collecting revenue from volunteers.³ Caltrans ran that collection pilot from August 2024 through January 2025. Participation was voluntary.⁴

Two dates matter for what comes next. The final report to the legislature is due by December 2026, and the entire road charge chapter of the Vehicle Code expires on January 1, 2027, unless lawmakers pass new legislation to extend or replace it.³ Legislators will effectively be deciding the program’s future at the same time they receive the pilot’s findings.

What a Per-Mile Rate Might Cost

The SB 339 pilot tested two ways of setting the rate. Half the participants paid a flat rate per mile, identical for every vehicle regardless of fuel type or efficiency. The other half paid an individualized rate calculated by dividing the state gas tax by their vehicle’s EPA fuel-economy rating. A car rated at 30 miles per gallon would owe roughly 2 cents per mile under the individualized method, using the current $0.612 gas tax divided by 30 mpg.³

The state’s road charge site uses illustrative rates of $0.02, $0.03, and $0.04 per mile for comparison, and notes that any actual rate would be set by the legislature.⁵ At $0.03 per mile, a driver covering 12,000 miles a year would owe $360. That’s roughly what someone driving a 20-mpg car already pays in state gas tax.

How Mileage Would Be Reported

Both pilots let participants choose how to report their miles, and that choice was deliberate. Some options record only how far you drove; others use GPS. The first pilot found that offering a range mattered for adoption, because drivers uncomfortable with location tracking could opt for methods that captured distance only, and drivers with older cars weren’t shut out by a technology requirement.⁶

Manual options put the reporting on you. Under odometer reading, you submit your odometer at set intervals and pay for miles since the last report. A mileage permit lets you prepay for a set number of miles. A time permit is a flat prepayment for unlimited driving over a fixed period.

Automated options handle it for you. A small OBD-II device plugs into your car’s diagnostic port and transmits mileage. A smartphone app logs trips through GPS or Bluetooth. Newer vehicles with factory-installed cellular connections can report mileage directly. GPS and non-GPS versions of the automated options were both tested.

Would You Be Charged Twice If You Buy Gas?

No. Double-taxation is the biggest design challenge for a per-mile charge, and SB 339 addresses it directly. Pilot participants who bought gasoline received a credit or refund for the estimated gas taxes they paid during the pilot period. Electric-vehicle owners, who already pay an annual Road Improvement Fee in place of gas tax, received a prorated credit for that fee.³ The collection pilot confirmed the offset worked in practice.⁴

The goal is revenue neutrality. A driver paying $360 a year in gas tax who also owes $360 under the road charge would see no net change. The per-mile charge is meant to replace the gas tax, not stack on top of it.

What EV Owners Actually Pay Today

While the per-mile charge remains in development, California already collects extra revenue from zero-emission vehicle owners through the Road Improvement Fee. If you own a ZEV from model year 2020 or later, you pay $121 per year at registration renewal.⁷ The fee isn’t assessed on your first registration when you buy a new ZEV from a dealer. It kicks in at renewal. This is the state’s interim way of recapturing some of the road-funding revenue that EVs don’t generate at the pump.

Privacy Protections in the Pilots

SB 1077 required the advisory committee to specifically study the risks of location-data reidentification, the danger of combining location data with other technologies, and whether law enforcement or other agencies could access collected data.²

In the first pilot, all personal information, including mileage and account data, had to be destroyed within 30 days after the pilot ended. Non-personal aggregate data could be retained for research.⁸ The SB 339 collection pilot made similar commitments to protect and then destroy participant location and personally identifiable data.⁴

Choice of reporting method is itself a privacy safeguard. If you pick odometer reporting or a mileage permit, the state knows how far you drove but not where. How these protections would scale to a mandatory, statewide system is one of the open questions the final report will need to address.

Rural and High-Mileage Drivers

A per-mile charge hits hardest if you drive a lot and don’t have alternatives. That describes many rural Californians, who cover longer distances for routine errands and have limited transit access.⁹ The state has commissioned studies comparing the financial impact on rural versus urban households and on “super-commuters” who spend more than three hours a day in round-trip travel.

The individualized rate method partly addresses one equity angle. A driver whose car gets poor gas mileage already pays more gas tax per mile than a hybrid driver does, so the individualized per-mile rate would reflect that rather than flatten the cost. It doesn’t solve the underlying issue that rural drivers rack up more miles than urban ones. Whether the legislature builds in any discount, credit, or cap for high-mileage drivers is a policy question the December 2026 report will likely inform.

What Happens Next

Two events will decide the program’s near future: the final pilot report due in December 2026 and whatever the legislature does before January 1, 2027, when the current authorizing law expires.³ If lawmakers do nothing, the road charge chapter of the Vehicle Code disappears. More likely, they’ll either extend the pilot for further study or begin drafting a framework for a phased mandatory rollout. Neither outcome is guaranteed. Until then, the gas tax remains California’s primary road-funding mechanism, supplemented by the $121 annual fee on newer zero-emission vehicles.⁷

1
California Department of Tax and Fee Administration. Fuel Taxes – Tax Rates
2
California Legislative Information. SB-1077 Vehicles: Road Usage Charge Pilot Program
3
LegiScan. CA SB339 – 2021-2022 Regular Session – Chaptered
4
California Road Charge. Road Charge Collection Pilot
5
California Road Charge. California Road Charge
6
California Department of Transportation. California Road Charge Pilot Program Final Report
7
California DMV. Registration Fees
8
California Department of Transportation. Road Charge Privacy Policy
9
California Road Charge. Impacts to Key Communities