Oregon Taxing EVs, Hybrids Through VMTs

Oregon is enacting a Vehicle Miles Traveled taxation plan called OreGo, where it charges drivers by how many miles they drive rather than collecting taxes on gasoline, the conventional method for getting the funding. The idea is helping to raise revenue because as cars are getting better gas mileage and some aren’t using any gas at all, tax revenues are dwindling.

The $8.4 million program could be the model for other states, like Michigan, struggling to find ways to maintain and upgrade sagging infrastructure as tax revenues continue to fall.

Starting July 1, 5,000 volunteers can sign up to drive using electronic devices that track how many miles they drive. They will pay 1.5 cents per mile to travel on public roads in the state instead of paying the gasoline-based tax.

Oregon isn’t the only state looking to ensure it collects tax revenue from every driver on the road. California is studied alternatives to the gas tax and is creating a pilot program. Washington is developing a program a similar to Oregon’s and there is legislation being considered in Indiana to do the same. Oregon officials say it is only fair for owners of green vehicles to be charged for maintaining roads, just as owners of gasoline-powered vehicles do.

The program is the second phase of testing. The state has already conducted some smaller trial runs to work out the bugs and challenges that OreGo may encounter. It’s not restricted to EVs and hybrids. Any car can sign up, but there are some limitations. No more than 1,500 participating vehicles can get less than 17 miles per gallon, and no more than 1,500 must get at least 17 miles per gallon and less than 22 miles per gallon.

The volunteers who drive vehicles with gasoline-powered engines are still on the hook for taxes when they fill up, but they will receive a credit or a bill monthly depending upon their usage rates.

Back to NAFA Connection