Oregon Considers Per-Mile Fees for EV Owners as Gas Tax Revenues Decline

Electric vehicles (EVs) have long been championed as a step toward a more sustainable future. But their rise presents a fiscal challenge: shrinking gas tax revenues that fund critical infrastructure. Oregon lawmakers are now weighing a major shift—charging EV owners a per-mile fee or flat annual charge to replace lost fuel tax revenue.

What Happened

• Oregon faces a $300 million transportation budget shortfall driven by inflation and reduced fuel tax collections.

• Proposals include:

  • A 2.3¢ per-mile fee starting in 2027, tracked via mileage reporting.

  • An alternative $340 flat annual fee by 2028.

• The plan also recommends raising the gasoline tax by six cents to bolster the Highway Fund.

• Legislative progress has stalled for now after a special session failed to reach quorum.

  
  

Why It Matters

1. Infrastructure Funding at Risk: Roads, bridges, and transit projects depend heavily on fuel taxes. Without adjustments, budget shortfalls could delay essential repairs.

2. Policy Precedent: Oregon would join Hawaii in pioneering per-mile taxation, setting an example other states may follow as EV adoption accelerates.

3. Privacy & Compliance Concerns: Mileage-based tracking raises data collection and enforcement questions that both policymakers and drivers will need resolved.

4. Impact on EV Adoption: Higher ownership costs could slow momentum for EV purchases, especially among cost-sensitive households.

   
   

Implications for CPAs and Businesses

• Fleet Owners: Companies with EV fleets should prepare for potential new operating costs and compliance systems.

• Tax Planning: Mileage-based fees may alter total cost of ownership models, requiring updated projections for clients considering EV investments.

• State Tax Monitoring: Advisors should closely watch Oregon and Hawaii, as similar measures could spread nationally.

  
  

Looking Ahead

The debate in Oregon underscores a broader fiscal reality: as technology changes, so must the tax base that supports public services. Whether the state adopts a per-mile fee, a higher registration charge, or some hybrid model, this could reshape how states tax mobility in the years ahead.

Stay Ahead of State Tax Shifts

From property tax rebates to EV fees, state-level tax changes are accelerating.

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