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."

Sudre_ | 5 gennaio 2013

Year end odometer readings probably really wouldn't work in the long run but a nice temporary short term solution. I drive about 5000 miles a year in my state. My 12 year old car has 85K miles on it. The balance of those miles (25K) was driven in other states. The other states are going to find a way to tax me too. So then I will be paying taxes several times as I drive around the country.

It the long run if you want a tax per mile then you also will end up with a tracking GPS device.... or like everything in government everyone just pays for it in a graduating scale depending on you income or sales tax. Just like all other taxes.

In my opinion if you are agreeable to the tax per mile then you are also signing up for a tracker. I really don't care either way as long as the tax is fair.

Velo1 | 5 gennaio 2013

@DTsea - thanks for clarifying. I get the Seattle 3-4 times per year, so hoped to see you Model S on the road.

drp | 5 gennaio 2013

It doesn't matter what is taxed. Most monies are misappropriated and not spent on what it was said to be for. as far as Denmark, with a 25% VAT in addition to 65% income tax, fuel and all cars are about 40% more than in the US. People who buy fuel are the ones who pay for roads. People who use public transportation do not. That's why gas is $8 a gallon in a lot of Europe.

TikiMan | 5 gennaio 2013


The Denmark markets, restaurants, stores, etc should charge an extra 30% tax for their patrons who don't own a car. Because, regardless if they don't use the roads, they still buy products that rely on those roads to get the products to the shelves.

Which is exactly why the freeways and roads need to be taxed just like the public schools (you still have to pay for them if you use them or not). Not based on use.

Either way, if I lived in Oregon, I would be preposing a per-child tax increase, so those who don't have children, don't have to pay for the public school system they don't use.

DouglasR | 5 gennaio 2013

@TikiMan, part of the problem is trying to treat a tax like a fee. Fees are typically based on usage (e.g., bridge and highway tolls, parking meters, etc.), whereas taxes are based on ability to pay (progressive income tax rates) and/or treating people equally who are similarly situated (property taxes). Gasoline taxes are excise taxes, based on the purchase of each gallon of gasoline. Although the gasoline tax is intended as a surrogate for highway usage fees, it is imperfect: you don't have to use the highway at all, but you still pay the tax. Actually charging a fee for the use of highways is administratively (and politically) difficult. But charging people a tax for NOT buying gasoline sounds suspiciously like what the Supreme Court said was unconstitutional in its decision on the Affordable Care Act. (Note: the Court was opining on the powers of Congress, whereas this is the Oregon State Legislature, so that case does not apply).

Thumper | 5 gennaio 2013

Comments about bike paths are somewhat short sighted. Bike paths are not very expensive per mile (it varies a lot) and they produce many benefits. Not only do they make it safer for the cyclists, they reduce congestion on the road for drivers. They reduce gas imports just like EVs. An example of very expensive transportation programs that are used by a very small group of already very wealthy citizens, is the civil air system. I'm not even sure this is bad, just that it is easy to whine about any expense We are not consuming ourselves. Sometimes there is a general societal benefit. Are we all in this together or all in this alone?

GoTeslaChicago | 5 gennaio 2013

+1 thumper

Robert22 | 5 gennaio 2013

Reduce the efficiency of the electric motor to an equivalent 54mpg and pay nothing ;)

TikiMan | 5 gennaio 2013


Actually, that would be a good argument in a lawsuit! The EV owners in OR could just tell the judge that our cars don't use gas, thus we can not be judged by MPG rules.

Pungoteague_Dave | 5 gennaio 2013

The Model S is heavier than 90% of the cars we share the road with. We cause a lot more wear and tear than the typical Civic, and my full-size 2wd F150 Ford pickup is exactly the same weight as a Model S! We should pay our portion of road construction and maintenance. Right now this is funded through fuel taxes on most vehicles and excise taxes on heavy trucks. Our EV's currently live in loop-hole land and escape taxes in most places. Just as we all benefitted from tax-free Internet purchases, this too shall and must end. Amazon has agreed to begin collecting sales taxes most places, and we need to acknowledge our responsibility to pay for roads too. Be adults and stop expecting special treatment or acting all sanctimonious about driving green. No one owes us anything.

DTsea | 5 gennaio 2013


Bike lanes- not paths, but lanes created by reducing powered vehicle traffic lanes- cost exactly as much as the lanes they replaced. Plus they create a more congested roadway (by reducing lanes available) which puts pressure to add capacity, or causes opportunity costs to powered users (it costs something, for example, for trucks to be held in traffic... to move the same volume per day then requires more trucks and drivers if they go slower).

Bike paths are not that cheap- unless the government already has the right of way. Most of the ones in Seattle are converted from abandoned railroad right of way. This has been very controversial for adjacent property owners who believed the property would revert to them if the rail use were abandoned. This opportunity cost, of course, is borne by the adjacent property owners.

The discussion about fees versus taxes applies. In Washington, the sales tax is waived for electric cars. That's plenty of incentive for me... I don't mind paying something to replace the gas tax I won't have to pay any more. Washington charges 37.5 cents per gallon of gas tax. For the car I will replace with the Model S, I have been using about 800 gallons of fuel a year; which works out to $300 per year of state gas tax. Since the state will only charge me $100 for the road use fee when I renew my registration, I am still coming out way ahead.

I think we as the electric vehicle owners need to be careful not to look like zealots or freeloaders. That puts the much more significant federal and state tax incentives at risk.

MB3 | 5 gennaio 2013

As we go electric, it seems more natural to charge electricity tax.

dtesla | 6 gennaio 2013

Fairfax Virginia has a 4.57% annual ownership tax based on the Blue Book value of the car. $100 doesn't sound so bad to me.

TikiMan | 6 gennaio 2013


I'll tell you what... I will agree 100% with you, when all the other 'privately owned' corps in American (including religions) pay their fair share. Until then, the federal government should kiss my A$$ for saving their A$$!

Jeff Miller | 6 gennaio 2013

One of the advantages of the gas tax is that it taxes a very undesirable externality - CO2 emissions -and therefore acts as a weak proxy for a carbon tax.
Replacing a gas tax with milage tax would, as other have noted, decrease the incentives for purchasing energy (and therefore carbon) efficient vehicles. As a society it's much more important that we to reduce our carbon consumption than reduce miles driven. The Oregon/Washington proposal unfortunately moves in the exactly wrong direction. If we were to properly account for the environmental and societal externalities (like our wars in the mideast) we should be increasing the gas tax, not lowering it. (Of course we should also impose a carbon tax on electricity generation.)

That said, there is another excellent candidate for a transport tax (in addition to the gas tax), namely a congestion tax. Put up automated tolls on all the major roads and charge people a toll proportional to the congestion. Doing so would potentially raise a lot of revenue and reduce congestion and also
reduce the need for new roads.

Brian H | 6 gennaio 2013

The US has a higher corporate tax than any other industrialized nation. It also taxes profits both in the hands of the corp and of the shareholders. How much do you think is in that particular pot?

DTsea | 6 gennaio 2013

Tikiman, the gas tax we are talking about is state gas tax, not federal (see title of thread- OREGON). I can see you have strong feelings that you are already paying more than your fair share. I just don't agree that it's reasonable to use the roads and not pay something just like everybody else, though.

steve | 6 gennaio 2013

I don't have a problem paying a yearly $100 or even $200 fee, but this nonsense of per mile is ridiculous. How does Oregon plan to track that data? I'm planning on taking a road trip this fall in my model s through California and Arizona. It doesn't seem fair to be taxed when I'm 'doing the damage' in other states...

I'm going to write to some of my local congressmen about this confusing debacle. I'd recommend other Oregon Electric car owners to do the same.

Chase, Portland/Hood River, Oregon #3707 Red black leather P85

steve | 7 gennaio 2013

Whoops... I guess it's because it's late, I didn't see the other pages of the article (I hate when online news sources break it up into multiple pages instead of one entire piece). It sounds like Oregon does have a decent way to execute upon this. I'd still go the way like Washington and pay an annual fee...

murraypetera | 7 gennaio 2013

Seems like the oil lobby is getting nervous.

drp | 7 gennaio 2013

According to CNBC, a number of states are considering at least a $100 V MT, value mileage tax on electric vehicles. It is possible that not only are the oil companies getting nervous but also the regular car dealerships. They have lots of lobbyists.

DTsea | 7 gennaio 2013

murraypetera, drp,

Seems to me it is the state legislatures getting nervous about how to pay for roads if we all move to electric (or high fuel efficiency) vehicles and aren't paying as much gas tax.. I don't think we need to look for a conspiracy here.

GoTeslaChicago | 7 gennaio 2013

The Federal gasoline tax hasn't been raised since 1993. The Oregon Gasoline tax has been raised only once since 1993 and that was in 2011.

According to their press release, the tax increase only recoups half of the increase in consumer prices since 1993. If Oregon is worried about having enough funds to keep up with road repair, why not keep the gasoline tax up with inflation?

Why blame it on electric cars which are on the roads in tiny numbers? By prematurely taxing EVs, instead of raising the gasoline tax to keep up with the rate of inflation, it looks like the oil companies and other vested interests are hoping to abort the EV movement before it gets off the ground.

A previous post drew a parallel to the internet sales tax holiday that helped internet retailers like Amazon before states started cracking down recently.

Why not give EVs the same 10 plus year break that Amazon got? When Tesla is as big as Amazon, I too would have no objection for a tax on EV mileage.

JohnQ | 7 gennaio 2013

The right answer is to charge the fee for non-gasoline powered vehicles and increase gasoline taxes to adjust for inflation. Of course, politics and rational don't often mix.

I doubt anyone will choose not to purchase an EV because of a $100 tax. We can argue about "camel's nose in the tent" issues but I hardly think it's unfair on the surface.

Mel. | 7 gennaio 2013

Dysea, your reasoning appears flawed. Your approach would have someone with many children in public school paying more than someone who does not have children. Do you rally think that people that are childless should be exempt from the school tax?

Trucks cause the damage to our roadway , what do you have against putting them on trains?

Sudre_ | 7 gennaio 2013

Actually people who have many children pay less. It's called a child tax credit.

Mel. | 7 gennaio 2013

Sudre, exactly, but you are talking reality

TV | 7 gennaio 2013

My reply? how do you disconnect the speedometer on a Tesla?
I wouldn't normally say something like that, but there are just too many darned Socialists in this Country. Someday they will try and tax the air we breath.

"I mean, everybody uses the air, and if some breath deeply, and some are breathing lightly, then that's CLEARLY an unfair advantage for the dead that's just got to be resolved,' says Bill Butthead of the Department of Death and Taxes.

DTsea | 7 gennaio 2013

Schools benefit everyone. However it could be aeen as unfair that those who pay for private school are being treated unfairly, i dont object anyway. Same as paying for roads.

Brian H | 7 gennaio 2013

Encourage bigger families. There's a demographic crash, like a mini-version of the Chinese 1-child disaster, looming. Your retirement nest egg may hatch a dead chick unless there are enough later gen workers to keep the system ticking.

Countries with very low birthrates--like Japan's 1.21 children per woman--are in demographic collapse because each new generation is little more than half the size of the one that preceded it. At this rate, it would take only four generations to reduce the size of population to 10 percent of its initial size. To offset this decline and restore the population to its initial numbers [in one generation], each woman would need to have 20 children!

DTsea | 8 gennaio 2013

Brian H, I agree that we subsidize families. I have three kids and they are expensive! Universal education makes a better society so I am willing to pay for it. So do roads. So I am willing to pay for them too.

Sudre_ | 8 gennaio 2013

Mel you must not live in the US or do not have children or do not do your own taxes. Most everyone in the US gets a deduction on their federal taxes for dependent children. It in NO way covers the cost of raising kids and I have no prblem with it but someone making 50k a year married without kids pays more in overall taxes than if they had a kid.

olanmills | 8 gennaio 2013

On the first page, GoTeslaChicago posted:

"Tax what you want to discourage. Incentivize what you want to encourage"

That is just one school of thought, and it's not one I belong to. I think it's not a great idea and can even be immoral to try to control people's behavior with taxes.

I don't want to start a big debate about that, I just want to point out that's not the only way to think. So those of you who are saying that this is the opposite of a carbon tax that it discourages cleaner technology or encourages polution, etc are simply coming from a different perspective.

The mileage tax is meant to make you pay a cost based on your usage of public property. In that regard, it makes sense.

Mel. | 8 gennaio 2013

Sudre, wow you are really into this tax situation for children. Sorry my example pulled you off the subject we were discussing. The tax on ev's is what is aggravating to me. I really think we should be emcouragimg everyone to own an electric vehicle, and if we need to raise money for roads let the ICE vehicles and trucking firms pay more, by increasing the gas tax

I really do not care if you like kids or if you prefer cats, I was trying to discuss Ev's and how we should support this industry, again sorry for my poor example

By the way, I would never do my own taxes

DTsea | 8 gennaio 2013

Olanmills, +1. We should STOP using taxes for social engineering. If we want to subsidize something, cut a check. Otherwise keep taxes as direct and simple and equitable as possible.

So... I will take the fed tax credit (for the car AND charging infrastructure), the WA state sales tax exemption (for the car AND charging infrastructure). I pay a lot of taxes anyway. But some point I start to feel like the people who complain about government picking winners are right. Why should everybody else have to subsidize my car, even to not paying for roads? (which in WA are funded ONLY by gas taxes).

I am buying the car, not as a political statement, but because

1) it's really awesome
2) I hate having to stop my day to get gas all the time
3) power in Seattle is cheap and is generated by hydro
4) It's the first American made car I have been excited by since I was a kid.

SO I would buy it anyway. I feel sufficiently incentivized, but I didn't buy the car BECAUSE of government incentives. Those only work on people that are on the fence- and I am not.

Sudre_ | 8 gennaio 2013

Sorry Mel. I thought your NON-punctuated statement was a question! lol.
Now you just made yourself look like more of an ass than me.

DFibRL8R | 11 gennaio 2013

Interesting news regarding Gasoline tax with Virginia's Governor proposing eliminating the tax altogether due to decreasing revenues.

"McDonnell's transportation funding plan would make Virginia the first state without a direct tax on gasoline paid at the pump. It's the first major overhaul of the state's primary stream of transportation revenue since the per-gallon tax was levied 27 years ago. McDonnell noted that because that tax is tied to gasoline volume and not price, declining usage, greater automotive fuel efficiency and looming competition from emerging alternate fuel sources has eaten into its ability to sustain needed maintenance work, much less underwrite badly needed new projects."

In my opinion, the main reason for declining revenues is that the tax is a fixed (non inflation-adjusting) tax of 17.5 cents and hasn't gone up since the 1980s!

DTsea | 11 gennaio 2013

Washington is now also starting to kick around a per mile tax. First they have to figure out how to bill it...

measton | 19 gennaio 2013

If we're going to talk about fairness let's talk about the huge subsidy people who live in the country get over city dwellers. MPG is much less for stop and go driving and short trips. The cost of maintaining roads that get a small fraction of the # of cars that city roads get is much higher. We subsidize the price of oil by providing security to the worlds oil producers and we overthrow governments that have oil with our income taxes. Our gov provides big oil with massive tax breaks that allow companies like Exxon to pay very little to no taxes. We sell oil rights for pennies on the dollar. We provide geologic data and infrastructure to big oil. I hope someone stands up and points all this out.

I'm all for a tax per mile traveled for all cars. Taxing cars that get good mileage more is definitely an attempt to reduce there appeal and you can bet that the oil lobby is behind it.

Brian H | 19 gennaio 2013

Rather simplistic. Road wear is mostly due to goods transport. How do you think the cities get their supplies? Airships and blimps?

stewart.horner | 25 settembre 2013

there should just be a road tax required for every vehicle, the way it works in the UK.