What, exactly, is the California mileage tax? (Spoiler: It's not actually a "mileage tax")
California's "mileage tax" is a road usage charge the state has studied since 2014, not a tax drivers pay. Assembly Bill 1421 asked for one more report on it and died in the Senate in 2026. Here is what the bill proposed and why California is looking for an alternative to the gas tax.
Assembly Bill 1421 asked California to keep studying a mileage-based fee system that could eventually replace the gas tax. It passed the Assembly 49 to 21 on January 29, 2026, then died in the California Senate without a committee vote. California has no "mileage tax" of any kind. For where the idea stands as Governor-elect Xavier Becerra takes office, read our update on the California mileage tax under Becerra.
If you are just tuning in, here is a full rundown of what AB 1421 was, the history behind the "road charge" concept (which is often, misleadingly, referred to as the "California mileage tax"), and the financial reality driving the proposal.
Mac Douglass | Editor
What AB 1421 Would Have Done
Assembly Bill 1421, introduced by Assembly Member Lori Wilson in February 2025, began as a bill to extend the life of the state's "Road Usage Charge Technical Advisory Committee" and related research provisions from January 1, 2027, to January 1, 2035. Wilson's January 5, 2026, amendments removed that extension. Under current law, those provisions expire on January 1, 2027.
The version that passed the Assembly would not have imposed a tax on any driver. It would have required the California Transportation Commission (CTC), working with the California State Transportation Agency, to consolidate the state's road charge research and submit a report to the Legislature by January 1, 2027.
That report would have had to cover three topics:
- Inequities for low-income drivers: The current and future inequities for low-income drivers who commute farther in less efficient vehicles.
- Commercial and electric vehicles (EVs): The impact of a "weight-per-mile fee" for commercial and electric vehicles on the motor vehicle industry.
- Implementation: Regional and state options for a road user charge, including ways to capture revenue from out-of-state vehicles.
Why It Was Proposed
The bill sought to consolidate research on alternatives to the gas tax, focusing on how new fees would affect different drivers. Its "findings" on the gas tax shortfall were removed from the final text, but the bill still required the commission to analyze "the impact of a weight-per-mile fee for commercial and electric vehicles on the motor vehicle industry."
The Legislative Counsel's Digest notes that existing law already tasks the state with assessing "the potential for mileage-based revenue collection as an alternative to the gas tax system." That mandate expires on January 1, 2027, and the final version of AB 1421 would not have extended it.
California's fuel tax revenue today:
In the 2023–24 fiscal year, state fuel taxes and vehicle fees brought in about $14.2 billion, according to the Legislative Analyst's Office.
The future gap:
If California follows its climate plan, the LAO projects that gasoline excise tax revenue will fall by $5 billion (64%) by 2034–35, and that annual state transportation revenue will be $4.4 billion (31%) lower than today.
Electric vehicles pay no gas tax, and the gasoline excise tax is the state's largest single source of transportation money.
The Legislative Context Behind AB 1421
AB 1421 would have built upon a decade of legislative work, most notably Senate Bill 1077, passed in 2014.
SB 1077 (2014)
This legislation originally created the Road Usage Charge Technical Advisory Committee (RUC TAC). Its goal was to guide the development of a pilot program to assess mileage-based revenue collection as an alternative to the gas tax.
The 2017 Pilot
Following SB 1077, California conducted a pilot program involving over 5,000 vehicles which reported more than 37 million miles. This pilot simulated revenue collection through mock invoices to test the feasibility of the system.
AB 1421 would have continued the work started by SB 1077, requiring the commission to fold findings from state and academic sources, including the newer pilot below, into its report.
SB 339 (2021):
SB 339 extended the committee to January 1, 2027, and ordered a second pilot that collected real payments from drivers. About 800 drivers finished enrolling, and the pilot ran from August 2024 through January 2025. Its final report is due to the Legislature by December 31, 2026. Our update on the California mileage tax under Becerra covers what the draft of that report found.
What the New Report Would Have Looked Like
Had AB 1421 become law, the CTC would have had to consult a wide range of stakeholders on its 2027 report. Required consultants included:
- Privacy Experts: To address concerns regarding data security and location tracking.
- Equity Organizations: To ensure environmental justice and fairness for disadvantaged communities.
- Industry and government: Organizations representing zero-emission vehicle owners and manufacturers, plus local governments and regional transportation planning agencies.
Financial Stakes
The stakes involve the solvency of California's transportation system. The CTC's draft 2025 needs assessment estimates that cleaner vehicles could cut transportation revenue by up to $31 billion over the next decade, leaving a 10-year shortfall of $216.4 billion against the state's needs.
The commission's draft "recommends implementing a sustainable revenue mechanism as a full replacement to the state fuel excise tax," phased in over time, and says this "would require legislative action." AB 1421 asked only for research on the form such a mechanism could take.
Privacy and Implementation Safeguards
Privacy ran through both AB 1421 and its predecessor, SB 1077. The original SB 1077 required that the pilot program include at least one method of mileage reporting that does not rely on electronic vehicle location data.
AB 1421 would have required consultation with "privacy and data security experts" for its report. The existing law also requires processes that "safeguard the privacy of drivers," and it bars the state's Transportation Agency from giving road charge data to any private entity or individual except under a court order, a subpoena, a search warrant or in anonymized form for academic research. Those protections expire with the rest of the road charge chapter on January 1, 2027.
The California mileage tax remains unpassed as Becerra takes office:
California has no mileage tax, and the road charge chapter of the Vehicle Code expires on January 1, 2027, three days before Governor-elect Xavier Becerra takes office. Asked by KCRA 3 whether he would support a tax based on miles driven, Becerra said "Everything should be on the table." For what the state's own pilot found and what happens next, read our update on the California mileage tax under Becerra.
