As elevated fuel prices cut into the amount of miles traveled and tax revenue, attaching mileage related fees onto electric vehicles is getting a fresh look.
"Vehicle miles traveled taxes have become a prominent consideration for governments at all levels struggling to fund their roads, but privacy fears have blocked much implementation," writes Jacob Macumber-Rosin and Adam Hoffer of the Tax Foundation.
"A VMT tax does not require invading drivers' privacy. There is no need to track drivers' locations or driving patterns. It does not need to know where, when, how, or why driving occurs."
Macumber-Rosin is an excise tax policy analyst, and Hoffer is the director of excise tax policy, at the non-partisan think tank.
Since electric vehicles do not pay the fuel taxes that federal and state governments collect to pay for road repairs, a patchwork of fee systems have sprung up around the country.
The recent controversy around the use of automated license plate reader cameras deployed by the Flock Safety company has raised privacy issues about tracking vehicles, which has been a major talking point for opponents of a VMT.
The Tax Foundation cites a 2024 road usage charging pilot program in Washington state that could level the playing field without compromising privacy.
The program "showed that reporting odometer readings, especially with an accompanying photograph, is a perfectly viable way of facilitating a VMT tax."
A standard exemption for miles driven on private roads or otherwise outside of the applicable jurisdiction would also be rolled in.
The use of electronic commercial account manager devices that connect to a taxing authority and record mileage, but not locations, is also being explored.
"Policymakers should do more for privacy than grandstand on social media," said the Foundation.
"They should design their policies with respect for privacy, even if only to get public support for and avoid legal challenges to the optimal way to fund government roads."
The Foundation also provides an update on what's happening with EV taxes at the state level.
According to their analysis, 41 states now charge some kind of fee on EVs with most of them earmarking the funds for transportation projects.
Georgia currently charges the highest fees at $273. Alaska, Arizona, Connecticut, Florida, Maine, Massachusetts, Nevada, New York, and New Mexico charge no fees.
The One Big Beautiful Bill Act ended federal tax credits for buying an EV, but 15 states now offer credits, grants, or rebates.
Utah clocks in at the highest with an income- qualified grant program with a maximum of $10,000. Maine offers an $8,000 rebate.
"Thirteen states both offer an incentive for the purchase of an EV and impose an additional fee for them compared to combustion engine vehicles," said the Foundation.
"This disjointed circumstance arises as states try to further two goals with one taxed product."
The draft of the surface transportation reauthorization approved by the House Transportation and Infrastructure Committee includes the first national electric vehicle fees at $130 and $35 for plug-in hybrids starting in 2029.
The Congressional Budget Office responded by saying the EV fee would "generate roughly $12 billion over a ten-year period, far less than the amount needed to offset the bill's additional cost, let alone the significant shortfall that the Highway Trust Fund faces."
