As states look to replace lost sales tax collections, they have become creative in how nexus rules are applied and in some cases, have introduced new taxing regimes. California may soon be introducing a new tax to its residents.
According to local San Francisco news affiliate, WFSB, the state is currently struggling with finding money for road repairs as there isn't enough of it coming in from the gas tax recently implemented.
Instead of adding an entirely separate tax on top of the several taxes already being implemented, alternative measures are being considered from several people who want to solve the roads and gas conundrum through more efficient means. Senator Scott Wiener, as well as other high ranking officials, state that when it comes to road taxes, a likely solution is to stop charging by the gallon, and instead charge by the mile. Here are snippets from Wiener's comments regarding a mileage tax:
"If you own an older vehicle that is fueled by gas, you're paying gas tax to maintain the roads. Someone who has an electric vehicle or a dramatically more fuel-efficient vehicle is paying much less than you are. But they are still using the roads," Wiener said.
As often happens, changes to existing policies brings up issues. Many drivers in California are hybrid owners and thus avoid the high gas prices, which have some of the highest in all of the United States. There is no doubt this would bring about concern and frustration among those who drive energy-based vehicles. Taxes like this may discourage the use of hybrids, as it would defeat the purpose of saving money on gas.
Regardless whether this mileage tax is passed, you can expect to see states become more creative with existing tax statutes as well as introducing new taxes to increase their collections.