California Might Replace Gas Sales Tax With Mileage Tax

Your fuel efficient car might be great for the environment, but if you live in California, it might not help you save money much longer.

California lawmakers have introduced a plan to replace a sales tax on gasoline with a tax on motorists based on mileage.

Under the new plan, drivers would have to log how many miles they drove, paying a tax per mile. Drivers with electric or hybrid cars – which use less gasoline – would pay the same tax as drivers of regular cars.

California uses revenue generated from the gas sales tax to maintain the state’s transportation infrastructure such as roads, highways and bridges. Falling gas prices mean that a tax based on a percentage of sales results in less funds for the state. The switch to a per-mile tax, lawmakers believe, would result in an increase in revenue.

San Francisco’s KPIX reports that Gov. Jerry Brown, a Democrat, said that his state is suffering a “$59 million backlog on highway maintenance.”

According to KPIX, a similar program is being tested in Oregon, and is also under consideration in Washington and Colorado.

Among other taxes, California drivers currently pay a 2.25 percent sales tax on gas and a 9.67 percent tax on diesel fuel.