Oregon plans to introduce a tax on mileage

Oregon plans to introduce a tax on mileage

Wow, just wow

"Facing a $10 billion dollar revenue shortfall for transportation financing, the Oregon Legislature is expected to consider a bill to require drivers with a vehicle getting at least 55 miles per gallon of gasoline to pay a per-mile tax after 2015 to offset the loss in tax revenue for fuel efficient cars at the gas pump where the government has traditionally collected money to build and fix roads. Oregonians currently pay 30 cents per gallon, a tax that is automatically added at the pump but as cars become more fuel efficient and alternative fuel sources are identified, state officials project gas tax revenue will decline. 'Everybody uses the road, and if some pay and some don't, then that's an unfair situation that's got to be resolved,' says Jim Whitty of the Department of Transportation. Opponents of the Oregon proposal say it will hurt a new industry. 'It will be one more obstacle that the industry and auto dealers will face in convincing consumers to buy these new cars,' says Paul Cosgrove, a lobbyist for the Alliance of Automobile Manufacturers. Other states, such as Nevada and Washington, are also looking at a per-mile charge and a Washington law that would charge electric car owners an annual fee goes into effect in February. Oregon did a pilot study of the mileage tax (PDF) where participants paid 1.56 cents per mile and got a credit for any gasoline tax they paid at the pump. According to the study although initial media portrayals of the system were almost uniformly negative 91% of test participants preferred the mileage tax to paying gas taxes."

Bennett R. | 03. Januar 2013

That's idiotic! It's effectively the opposite of a carbon tax.

DouglasR | 03. Januar 2013

As a compensation, however, Oregon will allow EV drivers to throw their trash out the window of their cars (because current ICE drivers are allowed to pollute for free).

walla2 | 03. Januar 2013

Perhaps you can get receipts from gas stations from friends and family and offset the tax or even make some money.

It might be dishonest, but Oregon's lack of vision (in all things) should be punished.

walla2 | 03. Januar 2013

Using the Oregon DOT thinking, people riding buses, riding bikes, using trains, walking on sidewalks, and taxiing on the runways should also have to pay the mile tax. It's not fair that people on buses should get off tax free for using our roads. I'm from the South, and I thought we were backwards. Well, we are but not this bad.

sergiyz | 03. Januar 2013

Well, according to this it's not just Oregon...
The Washington state will collect an annual fee from EV owners effective Feb 2013.
I really hope CA is not gonna do anything like that any time soon.

walla2 | 03. Januar 2013

The $100 fee is well known in Washingon. I don't like it either but at 1.56 cents, the Oregon tax would exceed $100 after 6400 miles. At 12000 miles, you would pay ~ $200 extra plus the taxes on electricity in Oregon. The no EV sales tax in Washington seems like a good deal to offset the EV annual tax given that normally car taxes would be over 8% in Washington State. That more forward thinking tax break saved me over $9000 or 90 years of the $100 annual tax on EV's.

Desai | 03. Januar 2013

This better not catch on! How contradictory is that you offer a tax rebate for purchasing energy efficient cars and then want to charge tax because they are not using gas?!

cprenzl | 03. Januar 2013

this is crazy

brijam | 03. Januar 2013

I live in Oregon, and I'm taking delivery of my Model S in a few short weeks.

I have no problem with the tax. It seems quite fair. The tax is used for road upkeep, not for preventing pollution. How else are we going to pay for the roads equitably?

I have the same feeling about people who brew their own biodiesel having to pay road tax as well, and back when I was brewing my own I was fine with paying my share of the road tax, although the paperwork was no fun.

hfcolvin | 03. Januar 2013

But you can smoke dooby in Oregon so I guess it makes it all worthwhile.

Maybe they should tax that.

krazy57wagon | 04. Januar 2013

So if you have a vehicle that gets > 55 mpg, and use that to drive interstate, it makes perfect sense to have to pay per mile. Wouldn't it make more sense to add tolls and reduce the tax on gas? This way everyone contributes to maintaining the roads in Oregon. But lets be realistic, if they do this, they won't reduce the current tax. Either way, I'm glad I live in California :)

Brian H | 04. Januar 2013

If the gov't submitted to a public audit of how much of the gas tax and mileage tax actually was spent on the roads, as opposed to going into the general revenue trough ...

Carefree | 04. Januar 2013

Here in Arizona they were discussing the exact same thing. A tax per mile for EVs to offset the loss in gas tax money. Yes, it is crazy esp. because the number of EV vehicles is so small that it would not make any difference in the road maintenance budget.

If EVs ultimately become main stream, I can see states adopt such a tax - the money has to come from somewhere or we won't have roads to drive on.

DFibRL8R | 04. Januar 2013

There has been some discussion of milage tax in Virginia as well to offset decreasing revenues from gas tax as vehicle fuel efficiency increases. I predict many of the incentives/tax breaks that promote EV use will slowly disappear if more and more people go electric. The government has to get their money from somewhere. As early adopters, we benefit from these incentives but they will likely get phased out.

bbryant | 04. Januar 2013

Considering the condition of roads in WA especially around Seattle,
they need the money, but will they spend it on the roads? The test drive in Seattle took advantage of the poor road quality to promote the ride quality of the S and had no problem finding potholes.

I will pay up gladly IF they fix up.

Thumper | 04. Januar 2013

As I posted on the Club site, I live in Oregon and think the Washington flat fee of $100 is about right for an EV annual fee. If one drives 10K miles/year and gets 30 MPG that would be about $100 at the current 30¢/gallon tax rate. The proposal for 1.56¢/mile is too high. None of these schemes is perfect, but contributing close to our fair share for roads will not only get us roads but will mitigate resentment from the ICE crowd. I support a reasonable fee.

hsadler | 04. Januar 2013

I have seen this coming as a way to pay for roads. But the difference is - people driving through the state would contribute nothing. With the gas tax that was done.

What if I live one mile from the state line, and my job is 30 miles in the next state? My mile tax would not reflect my fair use of that state's roads. Just like the gas tax does nothing for my location if I cross state line to buy cheaper gas.

But, I agree, the gas tax was unfair since cars had different mpg's. Especially when wear and tear of a road is roughly based on a mile.

pilotSteve | 04. Januar 2013

I am especially concerned about how Oregon drivers will be required to "report" their miles. This proposal (I believe) would add a dedicated GPS transponder to rat you out..... on miles as well as speed etc.

Bad idea IMO!

ps. I support the WA road tax if its used to actually repair roads and not make bike lanes etc. Might be another sweet spot to live in SW Washington and drive to work in Oregon. No income tax in WA, no per-mile EV tax in WA, no sales tax on EV in WA..... and no sales tax on other things in OR.

Hey, they make the rules, we just play the game!

pilotSteve | 04. Januar 2013

I am especially concerned about how Oregon drivers will be required to "report" their miles. This proposal (I believe) would add a dedicated GPS transponder to rat you out..... on miles as well as speed etc.

Bad idea IMO!

ps. I support the WA road tax if its used to actually repair roads and not make bike lanes etc. Might be another sweet spot to live in SW Washington and drive to work in Oregon. No income tax in WA, no per-mile EV tax in WA, no sales tax on EV in WA..... and no sales tax on other things in OR.

Hey, they make the rules, we just play the game!

portia | 04. Januar 2013

hmmm, I won't mind if they really use themoney for fixing roads, but we know that is rarely the case, here in CA .

larryh | 04. Januar 2013

Although something like this will eventually be necessary, now is not the time.

kafahsholtz | 04. Januar 2013


I live in Washington, and consider the $100 'noise'. I mean, fine, and I didn't have to pay the 10% sales tax, which is quite the incentive.

That being said, I do think that gas and diesle should be taxed at a higher rate, to reflect the damage it is doing to people and the environment. I've had friends move to rural areas due to concerns about childhood asthma, which I think (and studies show) can be directly associated with tailpipe emissions. Not to mention the environmental damage unburned hydrocarbons are doing to our water quality, both lakes and Puget Sound and Hood Canal.

Being in healthcare, I believe part of the revenue should be directed towards healthcare insurance for the poor, as well as efforts to clean up our water.

Okay, I'll get off my soap box. But I figure that with my Model S I get to have my cake, and eat it as well (especially as compared to the average Cadillac, BMW, Jaguar and Mercedes owner).


ckessel | 04. Januar 2013

Seems reasonable, pay for what you use. Gas has been a proxy (albeit and inexact one) for road usage since nearly every car uses gas. They should drop the gas tax completely and just adopt it for all vehicles, perhaps due at the plate renewal time.

Unfortunately, even miles driven is a bad proxy as road damage varies based on vehicle weight. And studded tires are horrendous for roads.

mdtaylor69 | 04. Januar 2013

Or you could tax tires when you buy them. Even better, double the tax for studded ones.

DanD | 04. Januar 2013

The Portlandia mentality.

kalikgod | 04. Januar 2013

The reasoning behind the tax is sound (assuming they actually use thus money effectively to improve roadways). The execution of the policy is not. They either needed to:

1) Switch the tax to mileged based for all registered vehicles, not singling out EVs. i.e. If they proposed 1.56 c/mile for all vehicles, there would have been ICE driver uproar and a more reasonable rate would have been set.

2) Scale the measure to take effect as adoption increased to reflect actual wear on the roads from the segment. i.e. Full tax once 10% of registered vehicles are plug-in, scaled by adoption (1% EVs would mean $10 annual in WA for example)

Just my two cents on a fair method of supporting EV adoption and the roads they ride on. That would imply that they were seeking "fair" and not just doing the normal money grab.

kalikgod | 04. Januar 2013

+1 ckessel

You type faster than I do on my phone ;)

GoTeslaChicago | 04. Januar 2013

Tax what you want to discourage. Incentivize what you want to encourage. I'm surprised that a state like Oregon, which has a reputation for being pro environment, would add a tax to electric vehicles, or their mileage. There are a lot of ways to raise revenue if you're needing revenue. This seems like a backwards way to go.

Suppose you have 100,000 electric vehicles in Oregon and you tax them $100 per annum. That would be $10 million per year. (They said they have a shortfall if $10 BILLION!) After the costs of administering the program, how much would really go to the roads? It would be simpler and probably raise more revenue if they just increased the gas tax by 1 cent every few years to take in the same amount of money.

Then you would be incentivizing those who contribute to American energy independence by using less gasoline, or none at all.

PS Don't you think that a mileage tax with a credit for gasoline tax paid will give an unfair advantage to SUV and pick up trucks that burn more gasoline, and cause more road wear because they are heavier. This is worse than backward. Sounds like something thought up by the oil industry.

Imagine, if your SUV gets bad enough mileage, you might get more in the gas tax rebate than you pay for the mileage charge! My blood is beginning to boil at the thought of such a (deleted) plan!

drp | 04. Januar 2013

Didn't they just legalize Cannabis? That may be part of the problem!

DTsea | 04. Januar 2013

Well. Charging a fee for road wear is perfectly reasonable. Trucks pay very large road fees. Airplanes pay landing fees. Bicycles SHOULD be paying a tax for bike lane construction, and everyone pays general taxes for sidewalks.

I would say if they do this- do it on all vehicles AND:

- add a very high ($2000/year) tax on studded snow tires. They are legal in Washington and do terrific damage to our highways, most of which are concrete.
- REMOVE the road maintenance portion from the GAS AND DIESEL tax in lieu of mileage fee
- ADD BACK heavy pollution/clean water/ environmental degradation on GAS AND DIESEL.

It could be worse. In Europe, gas is taxed much more than diesel (to subsidize truck drivers) so they move all the freight with trucks (wasteful) people with trains (freight is a better use of train tracks- high ton mile efficiency) and everyone drives diesel cars because of the cross subsidy (which was very polluting until recent improvements in diesel engines).

GoTeslaChicago | 04. Januar 2013

".... and everyone pays general taxes for sidewalks."

Yes, but it would be fairer if everyone who walked on sidewalks were charged by the mile, and people with wheel chairs more since all those ramps cost so much. Why should people who drive everywhere be unfairly taxed for sidewalks they never use!

(Reductio ad absurdum)

Sudre_ | 04. Januar 2013

I have a feeling Oregon plans to tax a lot more than $100 a year. I imagine over time they will be taxing cars the same price they would have paid for gas. If the 1.5 cents/mile is true then it's more like 150-200 for the average driver.

Carl Barlev | 04. Januar 2013

+1 GTC (both posts)

DTsea | 04. Januar 2013

GoTeslaChicago, walking produces no wear on sidewalks. Sidewalks wear out from seasonal cycling (frost heave) and weathering. Roads, on the other hand ARE worn by traffic, and the heavier the vehicle the worse it is. In Seattle they are starting to install concrete paved bus stops because the giant buses groove the payment so badly. To me, this is why buses- despite how PC they are- are inferior to trains. Trucks, buses, and large personal vehicles do damage the roads. So do studded snow tires. Roads in my state are paid for only by gas tax, so I don't think it is really fair that I use the road but don't pay for it.

Bike trails.... big waste of money. Very expensive, very few users.

Wheel chair ramps- federal law so we have no local control on that one.

Really, it's nice that WA is not charging me the usual 9.5% sales tax when I get my Model S next month, and that the Feds give me a rebate... to encourage electric drive. But at some point I dont want to keep asking for more subsidies, risks a backlash.

GoTeslaChicago | 04. Januar 2013


Is the argument about fairness?

"Everybody uses the road, and if some pay and some don't, then that's an unfair situation that's got to be resolved,"

I don't think so. If it was about fairness, what about when you buy gas for your ATV, lawnmower, motor boat, jet ski, snow mobile, chainsaw, portable generator etc. You're paying road taxes and don't use the road. If it about fairness, why not charge to use the sidewalks? And why tax other people who might never use them. There's a lot of "unfairness" in the world, why is there such urgency to solve this problem of "EV unfairness"?

Is it about revenue?

"Facing a $10 billion dollar revenue shortfall for transportation financing, the Oregon Legislature is expected to consider a bill...."

I don't think so. It will be years, maybe a decade before Oregon has 100,000 electric cars on the road.
Even if they pay 2 cents a mile times 15,000 miles a year that would only be $30 million. How does that close a 10 BILLION dollar shortfall?

Could it be the Oil Companies and others who don't like to see green initiatives gain ground are using the fairness argument to disguise their real intent?

You decide.

Velo1 | 04. Januar 2013

@DTsea - you appear to have a beef with cyclists. I am an avid road cyclist and do it for fitness. I ride about 150-200 miles per week. Whether I was a cyclist or not, I would still drive the same miles per year, which is about 12k. So I do pay my share of taxes via gasoline, same as all other ICE vehicle owners. Not sure why I SHOULD pay an additional tax because there is a bike lane. However, where I live, Evergreen, CO, there are no bicycle lanes, just standard road shoulders on about 75% of the roads. Share the Road (with EVs).

EDH AL | 04. Januar 2013

I'm from California and am no expert on the law affecting transportation revenues, but I support an equitably applied tax on the miles traveled by all vehicles as a reasonable means to fund highway improvements and maintenance. A VMT tax is a reasonable way for EVs to pay their fair share of necessary highway improvements and maintenance.

While I can’t argue with the possibile ulterior motives behind a VMT tax, or the mismanagement of tax dollars collected thereunder, I believe its time has come and EV proponents need not despair. Getting to a truly equitable tax scheme is a huge challenge. Its up to our friends in Oregon to look out for the "devil in the details." Here's a few reasons why I think we shouldn't through the VMT concept under the bus.

1. Fuel taxes typically aren’t commingled with the general fund. I understand the distrust shared by many of us in the ability of government to manage its fiscal resources efficiently and equitably. I do know that in California, transportation revenues are reasonably well-guarded, if not always well-used. California’s Constitution provides that fuel taxes (i.e., cents/gallon), weight fees, and certain vehicle fees are dedicated to road construction and maintenance, and for the operation of the California Highway Patrol and the Department of Motor Vehicles. California’s Constitution prohibits use of these revenues for general purposes. (California does cheat a little here by loaning transportation revenues to the state's General Fund, but those loans are being repaid). Now the sales tax on motor vehicle fuel (i.e., cents per dollar of fuel purchased) is separate from the fuel tax and is, therefore “fungible” with the state’s General Fund, just like sales tax on any other commodity. In California, however, the sales tax on gasoline is earmarked for mass transportation programs.
2. As fuel economy increases, traditional fuel taxes fall in proportion to the needs of the transportation system. In the 1950s and '60s, when California's surface transportation system experienced phenomenal growth, motor vehicle and fuel tax revenues met the needs of new construction without any significant increase in the tax rates because the revenue necessary to build the streets and roads increased as fuel consumption increased and fuel consumption per mile remained relatively constant.
3. Imposing a tax on vehicle-miles traveled (VMT) on all vehicles using th highway system is a reasonable alternative to traditional fuel taxes. Users of the highway system pay according to how much they use (how many miles they travel). Because heavy vehicles cause more wear and tear than passenger vehicles, an additional weight fee is already imposed on heavy vehicles in most (all?) states to offset their greater impact on the system.
4. A VMT-based tax is not antithetical to a carbon tax or state and federal clean air acts. In California the carbon tax is intended to offset or reduce greenhouse gas (GHG) emissions to reduce the adverse effects of global warming. California’s transportation fuel tax is intended to pay for necessary highway improvements and maintenance. Motor vehicle tailpipe emissions are addressed through state and federal performance standards affecting the composition of fuels and the efficiency of motor vehicle engines.

As far as I’m concerned, an equitably applied VMT tax is a fair way for EVs to pay their share for highway programs and it needn’t conflict with climate change or clean air policies. I suppose a hybrid system combining fuel and VMT taxes might be workable as a transitional solution. I'm certainly sympathetic to the privacy concerns mentioned in this thread but I think that can be worked out. Finding common ground on what is truly equitable is an exciting mystery to me. All I know is, I want smooth roads to drive my beautiful P85 on and it seems pretty obvious our current scheme of paying for road improvements isn't working! | 04. Januar 2013

This makes sense to me as a way of paying road use taxes. I think the added benefit is that if you are a tax revenue source for local government then you are a recognized group. That may provide some incentives to listen to our interests rather than just the oil/car dealers/ICE manufacturer lobbyists.

Dr. Bob Reinke | 04. Januar 2013

I recall reading a news article in the 198's stating at that time that NHTSA had found that an average semi, weighing aprox 70,000 lbs caused 30 to 40 million dollars road damage annually. At that time the trucking industry was complaining that they had to pay 7 to 8 thousand dollars a year in road and motor fuel tax to keep that truck on the road. Seems to me that it is time again to try to get those who are crumbling the roads to start paying for their fare share. The reason that politicians are coming after EV owners is that last year the trucking industry spend 27 billion in lobbying the politicians, and about 10% of that on actual road expense. As usual, the politicos have it wrong again.

GoTeslaChicago | 04. Januar 2013

"As fuel economy increases, traditional fuel taxes fall in proportion to the needs of the transportation system." True, but not the whole story.

The Federal gasoline tax hasn't been increased since 1993. It needs to be raised at least 33% to have the same purchasing power as it did in 1993.

Are we trying to blame more fuel efficient vehicles for a problem that has it's root causes elsewhere?

GoTeslaChicago | 04. Januar 2013

Dr Bob,

You may be on to something, but the numbers can't be right. Maybe $30,000 per truck, but not $30 million. There are approximately 1.6 million long haul truck drivers. So there are probably at least 1 million long haul trucks. If so, times $30 million per truck would be 30 trillion dollars of damages!

Mel. | 04. Januar 2013

Edh, I understand you are in favor of taxing electric vehicles. Do you have any idea how much money you will raise and will it not cost significantly more to collect these taxes?

sergiyz | 04. Januar 2013

Any mileage-based tax will require either a device to track and report it or some kind of auditing, both are expensive propositions.
You don't tax something you want to encourage.
If you want people to adopt EVs, you charge them less, not more for driving them, otherwise there's no incentive to switch on a large scale.

cerjor | 04. Januar 2013

I was in Denmark and was told that the cost of your annual car license depended on the car's gas consumption. They use something comparable to our EPA mileage. The worse the mileage, the higher the license fee.

DTsea | 04. Januar 2013

Velo1, no beef with cyclists or with dedicated, safe, grade separated bike trails. I love to ride. My beef is with the mayor of seattle who (with our city streets disintegrating with potholes) is spending a lot of scarce street maintenance money on striping for bike lanes on the heaviest arterials, often with a dedicated bike lane running parallel already 50yards away. This encourages riding in traffic in our dark, wet city.

However, bike lanes are an amenity used by a small portion of the poulation, especially here in seattle because it is very hilly, wet, and dark. So, they make sense for heavily travelled routes (such as our long distance Burke Gilman Trail, funded as part of Parks) but DONT make sense when means of implementation is to turn one of the few four lane east west arterials we have into a two lane street.

EDH AL captured my thinking- gas taxes are a silly way to fund roads because as cars get more fuel efficient the revenues dont keep up for road maintenance, and as the marginal cost of driving drops people drive more. Heavier vehicles and more miles driven seem like a rational way to tax for roads, ifwe can figure out how to do it. By heavier i mean trucks and buses. Mileage tax would naturally pay for system expansion as demand rises.... Mobili is critical to economic health.

TikiMan | 04. Januar 2013

I have a better idea for them... Start charging higher lease prices for oil fields, and eliminate all tax subsidies for oil companies!!!! They would likely have their yearly state budget back in an hour.

DTsea | 04. Januar 2013

TikiMan, that might work for states with oil fields, but the other states need road revenue too. I don't know of state tax subsidies for oil companies.

Our Tesla cars won't be much good without roads...

EDH AL | 04. Januar 2013

"I understand you are in favor of taxing electric vehicles. Do you have any idea how much money you will raise and will it not cost significantly more to collect these taxes?"

Thanks for the question. I don't favor taxation of EVs. I favor a fair allocation of the costs of road and highway maintenance (and expansion) to all users (ICEs, EVs and others) of our road and highway system. So, to the Oregon proposal, I would suggest a gradual replacement of the fuel tax with a taxation scheme based on vehicle miles traveled (VMT) by all vehicles using public roads and highways.

Such a taxation scheme could (and should, IMHO) also include a discount for technologies like EVs in proportion to the societal benefits derived from such technologies (e.g., clean air). The taxation scheme should also take into consideration the disproportionate impacts of heavy duty vehicles. A VMT-based tax might be higher for trucks than ICE cars and EVs would pay less than ICEs -- but not zero. Other road users, like school buses or police and emergency services vehicles, might also deserve special consideration. (FYI, school buses in California currently don't pay fuel taxes and I think that's quite appropriate).

How much money would be raised? An appropriate taxation scheme that is applied to all vehicles (not just EVs) would have to collect at least as much revenue as is collected by the current fuel tax.

How would authorities know how much to collect from vehicle owners? Year-end odometer readings subject to audits and reconciled at the time of sale of vehicles. I believe interstate trucking companies pretty much already adhere to such a system for the sake of apportioning fuel taxes among the various states they may operate in. Its undoubtedly bureaucratic but not impossible.

Finally, let me say for the record that, IMHO, the odds of any state imposing a VMT tax are infinitesimally small -- but I still like the idea.

TikiMan | 04. Januar 2013


It really doesn't matter, WE all pay extra for oil companies to live in the lap of luxury. The backward thinking of raising taxes on people who already pay a premium just to own an electric or alternative fuel vehical, sounds like an oil company ploy to destroy the technology before it has a chance to take over.

Taxes for roads can just be transfered to state sales tax, state income tax, or a combo of both (as it really should be, because everyone (regardless of lifestyle) needs the roads and freeways, if you use them or not).

The type of thinking, in this proposed bill, would be about the same as if the state gave insentives to criminals to commit more crimes, just to keep law inforcement and the courts from having to take a pay-cut, because newer crime-fighting technologies reduced the overall crime rates.

noel.smyth | 05. Januar 2013

Highway pavement and bridge design is done based on truck traffic. the load of a car on the structural integrity of a bridge or rigid pavement is inconsequential. trucks case the structural damage to roads with usage. overweight trucks cause the most damage. car volume does indeed impact the # of lanes required for roads and can cause wearing on top coats of flexible pavement. and of course we all benefit from the ability to move people, goods and services efficiently across our country.
Taxes on the goods transported through a VAT or vehicle weight tax with some component from the general fund (as the roads benefit all) could be a fair mechanism to pay for roads... at somepoint before EVs become the dominant method car transport the gas tax needs to be supplemented but not replaced - the tax on gas should remain or go up IMO.. if a VMT tax were used then is should be on all cars not just efficient ones..