California Assembly Advances Bill to Research Mileage-Based Driving Tax

The proposed legislation would launch a study on how to implement a per-mile tax to replace the state's gas tax.

Jan. 30, 2026 at 10:55am

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The California Assembly has passed a bill, AB 1421, that would initiate research into implementing a mileage-based tax system to replace the state's current gas tax. The bill passed its third reading with a 43-18 vote, despite concerns from some lawmakers that it could unfairly burden rural drivers and result in double taxation.

Why it matters

As more Californians switch to electric vehicles, the state is facing a projected $31.3 billion loss in gas tax revenue over the next decade. The mileage-based tax system is seen as a potential solution to maintain transportation funding, but critics argue it could disproportionately impact rural residents who rely on gas-powered cars.

The details

AB 1421 would not immediately enact a mileage tax, but rather launch a study to determine how much to charge drivers per mile and how to collect that revenue. The research would need to be completed and presented by January 1, 2027, at which point the state could move forward with implementing the new tax system. Supporters argue it's a matter of "fairness" to ensure all motorists pay their "fair share", while opponents worry it could result in double taxation if the gas tax is not repealed.

  • AB 1421 passed its third Assembly reading on January 30, 2026.
  • The research required by the bill would need to be finished and presented by January 1, 2027.

The players

Lori Wilson

The author of AB 1421, who says the bill asks a "basic fairness question" about ensuring all drivers pay their fair share.

David Tangipa

A Valley Assemblymember who voted against AB 1421, calling it a "direct assault" on rural Californians who own gas vehicles.

Carl DeMaio

A San Diego Assemblymember who represents a county that already tried a mileage-based tax system in 2022, and estimates it could cost a working family with two cars $4,200 per year.

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What they’re saying

“This is a direct assault on the everyday Californians in rural portions of California that own gas vehicles.”

— David Tangipa, Assemblymember (KSEE/KGPE)

“AB 1421 asks a basic fairness question: How do we ensure all motorists pay their fair share, no more and no less?”

— Lori Wilson, Assemblymember (KSEE/KGPE)

“When you add up the car tax, the gas tax, and this new mileage tax for a family with two cars, a working family with two parents driving, they would have to pay $4,200 a year to the state of California just for the privilege of driving on crappy roads.”

— Carl DeMaio, Assemblymember (KSEE/KGPE)

What’s next

The bill now moves to the California Senate, where Assemblymember Wilson says she is committed to amending it to explicitly direct the research to help avoid situations where motorists could be double-taxed.

The takeaway

This proposed legislation highlights the challenges California faces in transitioning its transportation funding model as more drivers adopt electric vehicles. While a mileage-based tax could help maintain infrastructure investment, there are concerns it could unfairly burden rural residents who rely on gas-powered cars.