Key Points
- California has no mileage tax today. The state’s road charge study ends with a final pilot report due by the end of 2026.
- As studied, a per-mile charge would replace the 63.4-cent state gas tax, not stack on top of it.
Governor-elect Xavier Becerra pulled the California mileage tax into the governor’s race a week before the election. FOX 11 Los Angeles reported that Becerra said “everything should be on the table” when asked about a per-mile fee on October 29.
His campaign later said he has not proposed one. Californians already face the highest top income tax rate in the country.
Becerra is set to take office in 2027, so the idea now sits with the next administration. No mileage tax exists today. Californians pay for roads mainly through gas taxes and registration fees.
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Why It Matters
California generally pays for its roads through its gas tax. However, over the last decade, as electric vehicles have taken to the road, California is collecting less on the gas tax while charging more for it.
California’s gasoline excise tax climbed to 63.4 cents a gallon (PDF File) on July 1, 2026. The California Transportation Commission projects $31.3 billion less in fuel excise tax over the next decade, according to AB 1421’s findings.
EV owners pay through a flat fee instead. Model year 2020 and newer electric vehicles owe a $121 Road Improvement Fee in 2026 when they register their cars. A 30-mpg sedan driven 12,000 miles pays about $254 a year in state gas tax.
That difference is the main case for a per-mile charge, and it widened as electric vehicle tax credits pushed more buyers toward EVs.
How Would A California Mileage Tax Work?
A mileage tax would bill drivers for each mile driven instead of each gallon of gas purchased. The Caltrans road charge collection pilot ran from August 2024 to January 2025. Drivers paid either a flat per-mile fee or one tied to their car’s fuel economy.
The commission set the flat rate at 2.8 cents per mile (PDF File) to match gas tax revenue at the time. That’s a sliver of the 72.5-cent IRS standard mileage rate for 2026, which reflects the full cost of running a car. The 2.8-cent rate was set when the gas tax was 59.6 cents. Scaling it to today’s 63.4-cent tax puts a matching rate near 3 cents, by our math.
Drivers had several ways to report miles, and the commission said no location sharing would be required (PDF File). Odometer reporting works much like updating the annual mileage on your car insurance policy. However, many Californians have also expressed concerns about either fraud via underreporting or overreach by the state requiring mileage tracking to be automated.
California has run this test before. An earlier nine-month pilot logged more than 37 million miles from over 5,000 volunteer drivers, and 73% said a road charge was fairer than the gas tax, according to Caltrans. Participants could simply write down odometer readings, the same records rideshare and delivery drivers already keep for taxes.
Would Gas Car Owners Pay Twice (Gas Tax + Mileage Tax)?
No, not under the system California has studied. The commission describes the road charge as a revenue-neutral replacement for the gas tax (PDF File). In the pilot, participants got a credit for the gas taxes they paid, and EV drivers got a proportional refund of their registration fee. For most gas drivers, the change would look like a swap within the transportation line of a household budget.
The catch is that no law locks that design in, and a future bill would still decide what happens to the gas tax. Republican Assemblyman Carl DeMaio has warned that a charge could run 6 to 9 cents per mile. If lawmakers added a charge that high with no gas tax credit, a 12,000-mile driver would pay $720 to $1,080 more a year. That’s real money for anyone living on a lean budget.
Timing is the other wrinkle. Pilot drivers paid gas tax at the pump and got the credit back later. Caltrans has studied a pay-at-the-pump road charge (PDF File) that nets the credit out on the receipt. That would spare gas drivers from fronting money, which matters for lower-income households.
| Vehicle | State Gas Tax Or EV Fee Today | 2.8-Cent Road Charge | Difference |
|---|---|---|---|
| 20 MPG SUV Or Truck | $380 | $336 | Saves $44 |
| 30 MPG Sedan | $254 | $336 | Pays $82 More |
| 50 MPG Hybrid | $152 | $336 | Pays $184 More |
| Electric Vehicle | $121 road improvement fee | $336 | Pays $215 More |
Who Would A Mileage Tax Hit Hardest?
A mileage tax is built to reach drivers who pay little or no gas tax today. At the 2.8-cent rate and the current 63.4-cent gas tax, the break-even point is about 22.6 miles per gallon. Cars above that line would pay more, while other vehicles would pay less.
A low-mileage driver pays little either way, and my roughly 325 miles a month works out to about $109 a year at 2.8 cents.
AB 1421 author Lori Wilson framed the study as a fix for low-income and rural commuters who drive farther in less efficient vehicles. The bill’s findings say the state is already analyzing costs for supercommuters. AB 1421 also would have studied out-of-state vehicles and a weight-per-mile fee for commercial vehicles and EVs.
High-mileage workers, such as app drivers who can deduct miles at the IRS standard mileage rate, would see a road charge that grows with every mile.
The bigger concern is that since these are two different types of taxes, there’s the potential that both coexist together hitting all Californians and making them pay even more in one of the highest cost of living states.
How This Connects
Car costs already squeeze family budgets. Even a paid-off car can cost a commuting student hundreds a month in fuel, insurance and repairs. California’s AB 2251 lets students request cost of attendance adjustments for car costs starting in 2027-28. A per-mile bill would be one more documented car cost to list in that request.
Families deciding whether a student should bring a car to campus should price the miles, not just the parking permit. A student who drives home every few weekends could log far more miles than one who stays put.
What’s Next
Nothing changes for drivers yet. The state’s road charge study authority expires January 1, 2027, and the final pilot report is due before then.
The Assembly voted 49-21 for AB 1421 in January, but the bill never cleared the Senate. Watch for the report and any new road charge bill after Becerra takes office in January, and track the taxes you actually pay each year.
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.