California’s Tax on Miles Driven: Pilots, Rates, and Privacy

California does not currently have a tax on miles driven. The state charges a gas tax at the pump and a flat annual fee on electric vehicles, but no per-mile road charge applies to any driver today. California has been researching one for over a decade, and the most recent test, the Road Charge Collection Pilot, ran from August 2024 through January 2025. A final report to the Legislature is due by December 31, 2026, and any mandatory per-mile system would require new legislation after that.¹

Why California Is Studying a Per-Mile Charge

The gas tax funds most of California’s road maintenance, and it has a math problem. As cars get more efficient and electric vehicles take a larger share of the road, fuel sales drop while road wear does not. A per-mile charge taxes the driving itself, so every vehicle contributes regardless of what it runs on.

California’s combined taxes and fees on gasoline hit 70.9 cents per gallon as of January 1, 2026, the highest in the country.² The state excise tax alone rose to 61.2 cents per gallon on July 1, 2025. Replacing that revenue with a usage-based fee is the core goal behind the road charge work.

What the Pilot Programs Actually Tested

Two laws shape the effort. Senate Bill 1077, signed in 2014, created an advisory committee and authorized a first pilot that enrolled roughly 5,000 volunteers and tested a rate of 1.8 cents per mile.³ Senate Bill 339, signed in 2021, went further by testing actual billing and payment, not just mileage tracking.⁴

Participation was voluntary. SB 339 explicitly requires that participation be voluntary for any vehicle group other than state-owned vehicles.⁴ The pilots covered passenger cars and light-duty trucks powered by gasoline, hybrid, and electric drivetrains. Heavy-duty commercial trucks and motorcycles were not part of either primary testing phase. The collection pilot is no longer recruiting, and no public sign-up is open.

What a Per-Mile Charge Might Cost

No rate has been set. The Legislature would decide that figure, and the current California Road Charge website uses hypothetical rates of 2, 3, and 4 cents per mile in its public calculator, noting explicitly that all rates shown are hypothetical.⁵

SB 339 set up two study groups to compare structures. One group paid a flat per-mile rate that was the same for every vehicle. The other paid a rate calculated by dividing the state fuel tax per gallon by the EPA’s estimated fuel economy for that specific make, model, and year.⁴ Under the individualized approach, a truck getting 18 mpg would pay more per mile than a sedan getting 35.

For a rough sense of scale: dividing the 61.2-cent state excise tax by an average of 25 mpg lands near 2.4 cents per mile. A driver covering 12,000 miles per year at that rate would owe about $290 for the year. At 3 cents per mile, the same driver would owe $360. These are ballpark figures, not fixed rates, and the actual number depends on which existing taxes and fees the Legislature decides the road charge should replace.

How Gas Tax Credits Would Work

A road charge would not stack on top of the gas tax. SB 339 requires that pilot participants receive a credit or refund for the estimated state fuel taxes they already paid at the pump, and it extends the same treatment to electric vehicle registration fees on a prorated basis.⁴ The intent is revenue replacement, not a second tax.

Who wins and who loses depends on the vehicle. A fuel-efficient hybrid that currently pays little gas tax per mile might owe slightly more under a flat road charge. A gas-guzzling truck that generates high per-mile fuel tax revenue today could break even or pay less. Electric vehicle owners, who pay no gas tax at all, would see the road charge as a genuinely new cost after their EV fee credit is applied.

What Electric Vehicle Owners Pay Today

EV owners in California pay an annual Road Improvement Fee of $121 for model year 2020 and later zero-emission vehicles, collected at registration renewal.⁶ This flat fee exists because EV drivers don’t contribute through the gas tax. Under a future road charge, that fee would likely be replaced or credited against per-mile charges. SB 339 already builds in a prorated credit within the pilot.⁴

An EV driver covering 12,000 miles a year at a hypothetical 2.4 cents per mile would owe about $290, minus the prorated $121 credit. Net new cost: roughly $170 for the year. That’s more than the flat fee alone, which is the point critics raise. A per-mile system charges a high-mileage EV driver more than a low-mileage one, while the current flat fee treats them the same.

How Miles Would Be Reported

The collection pilot offered three ways to report miles each month.¹ A plug-in device attaches to the OBD-II diagnostic port found in most cars built after 1996 and transmits mileage wirelessly, with drivers choosing whether the device uses GPS. Vehicle telematics uses the automaker’s built-in connected-car system to share mileage directly. And the simplest option, an odometer photo, requires only a phone camera and the program’s website each month.

Privacy Questions the Law Has Not Answered

SB 1077 directed the advisory committee to weigh protecting personally identifiable information, the risk of re-identifying location data even after personal details are stripped, and questions of law enforcement access.⁷ The statute says travel locations or patterns “shall not be reported” and requires safeguards for personal information.

The pilots addressed privacy partly through choices in technology. Non-GPS plug-in devices and odometer photos let drivers participate without revealing where they drove. The 2017 pilot reported no data breaches during its run, and 78 percent of participants rated privacy and data security favorably.³ What current law does not do is set specific data destruction timelines or require a warrant for law enforcement access. Any permanent program would likely need more detailed privacy legislation.

Out-of-State and Private Road Miles

Miles you drive in Nevada or on private property shouldn’t fund California road maintenance, but separating them out is not simple. GPS reporting can distinguish in-state from out-of-state driving. The non-GPS plug-in and the odometer photo method cannot. The 2017 pilot acknowledged that certain compliance issues, including out-of-state mileage, couldn’t be adequately tested in a voluntary program.³ A mandatory system would need a clear mechanism, likely GPS data, self-reporting, or a flat adjustment. That question is still open heading into the December 2026 report.

What Happens Between Now and Any Mandatory Charge

The SB 339 authorization sunsets on January 1, 2027, unless the Legislature extends or replaces it.⁴ The final report due by December 31, 2026 will give lawmakers findings on billing systems, participant behavior, administrative costs, and equity impacts. Turning those findings into a mandatory program would require new legislation setting the rate, the collection infrastructure, privacy rules, and enforcement.

No timeline exists for when, or whether, a road charge becomes mandatory. California is further along in its research than most states, but scaling from a few thousand volunteers to millions of registered vehicles is a large jump. For now, every California driver keeps paying the gas tax at the pump, and EV owners keep paying the $121 annual Road Improvement Fee at registration.

1
California Road Charge. Road Charge Collection Pilot
2
U.S. Energy Information Administration. Many States Slightly Increased Their Taxes and Fees on Gasoline in the Past Year
3
California Department of Transportation. Road Charge Pilot Program Final Report 2017
4
LegiScan. California SB 339 2021-2022 Regular Session Chaptered
5
California Road Charge. California Road Charge
6
California DMV. Registration Fees
7
California Legislative Information. California Vehicle Code SB 1077 Chaptered