California Mileage Tax AB 1421: Pilot, Rates, and Key Dates

California Assembly Bill 1421, the mileage tax pilot extension signed in 2025, keeps the state’s voluntary road usage charge program alive through January 1, 2035, instead of letting it expire in 2027. It does not create a new tax, set a per-mile rate for the general public, or require any California driver to pay for miles driven. What it does is give the California Transportation Commission and the California State Transportation Agency more time to test a per-mile fee, and it sets a January 1, 2027 deadline for the commission to send its findings and recommendations to the Legislature.¹

What AB 1421 Changes

The bill does one main thing. Existing law under SB 339 (2021) directed the California State Transportation Agency, in consultation with the California Transportation Commission, to run a road charge collection pilot, and those provisions were scheduled to be repealed on January 1, 2027. AB 1421 moves that repeal date to January 1, 2035.¹

It also requires the commission to submit a report on its research and recommendations to the Legislature’s policy and fiscal committees by January 1, 2027.² That report, together with the pilot’s own final report due to the Legislature by December 31, 2026, is what lawmakers will use to decide whether California should move toward a permanent mileage-based system.³

What AB 1421 does not do matters just as much. It does not mandate participation. It does not set a per-mile rate for California drivers at large. It does not establish a permanent replacement for the gas tax. Those decisions remain ahead, and they would require separate legislation.

Why California Is Studying a Per-Mile Fee

Road maintenance in California is funded largely by the state gasoline excise tax, which stood at 61.2 cents per gallon as of July 2025. The problem is that the revenue base shrinks as drivers switch to electric vehicles and high-efficiency hybrids, even though those vehicles still put wear on the roads. Zero-emission vehicle owners currently pay a $100 annual road improvement fee at registration, but that flat charge doesn’t scale with how much a person actually drives.⁴

A road usage charge takes a different approach. Rather than taxing fuel as a rough stand-in for road use, a per-mile fee bills drivers based on how far they actually travel. California has been studying the concept since SB 1077 (2014) first directed the state to explore mileage-based revenue, and SB 339 (2021) authorized the first pilot to collect real payments from participants.

The Voluntary Pilot AB 1421 Extends

The road charge collection pilot under SB 339 began on or after January 1, 2023, and is the first in California’s history to process actual payments. Participation is voluntary. SB 339 specifies that if any vehicle group other than state-owned vehicles is selected for the pilot, participation must be voluntary.⁵ No California driver is required to pay a per-mile road charge today.

To avoid charging drivers twice for the same road use, participants receive a credit or refund at the end of the study for state gas taxes they paid on fuel used during the pilot. Electric vehicle owners receive a prorated credit for the annual road improvement registration fee they already pay.⁵ The road charge is designed to replace gas tax revenue, not to stack on top of it. Federal gas tax, at 18.4 cents per gallon, is separate and would still be paid at the pump by drivers of gasoline vehicles.

How the Per-Mile Rate Is Calculated

The pilot tests two different rate structures. Participating vehicles are randomly split into two groups. One group pays a flat per-mile rate that applies to every vehicle. The other pays an individually calculated rate equal to the state gas tax divided by that specific vehicle’s EPA-estimated fuel economy, so less efficient vehicles pay less per mile and more efficient vehicles pay more.⁵

For the flat-rate group, the Road Charge Technical Advisory Committee recommended 2.8 cents per mile for the 2024–2025 pilot period, up from an initial 2.5 cents per mile to account for inflation from fiscal year 2021–2022 through 2024–2025. The methodology is intended to be revenue-neutral: the per-mile charges collected should roughly equal what the same drivers would have paid in gas taxes.⁶

How Mileage Gets Reported

The pilot offers several ways for participants to report miles, both to accommodate different privacy preferences and to test which methods work best at scale.

A plug-in device that connects to the vehicle’s OBD-II port and automatically records mileage. Some versions track total distance only; others capture general location data to distinguish in-state from out-of-state miles.
Built-in vehicle telematics on newer vehicles, which can transmit mileage directly without added hardware.
A smartphone app that uses GPS or motion sensors. As with plug-in devices, some versions use location data and some don’t.
Manual odometer reporting, through periodic photos or in-person inspection. This option involves no electronic tracking but relies on self-reporting and can’t automatically exclude out-of-state miles.³

Privacy was built into the design from the start. SB 1077 directed the Technical Advisory Committee to consider protection of personally identifiable information, the ease of re-identifying location data even after personal details are stripped, and whether law enforcement or other agencies could access collected data.⁷ A driver who wants to avoid any form of electronic tracking can choose manual reporting.

Would You Have to Pay a Mileage Tax?

Not under AB 1421. The pilot the bill extends is opt-in, and moving from a voluntary pilot to a mandatory statewide system would require separate enabling legislation.

What that future system might look like is still being studied. The interim pilot report describes a potential administrative structure capable of covering all 33 million registered passenger and commercial vehicles in California, with a phased rollout likely taking 10 to 12 years after enabling legislation passes. The report also discusses a narrower alternative: applying the charge only to a subset of vehicles, such as zero-emission cars and trucks, which currently contribute the least to gas tax revenue.³ Even in the fastest realistic scenario, a fully mandatory system for all vehicles isn’t likely before the mid-2030s.

Open Equity Questions

How a per-mile charge would affect low-income and rural drivers is one of the issues the 2027 reports are expected to address. Rural drivers log more miles for commuting, errands, and medical appointments because destinations are farther apart and transit is limited. Low-income drivers often own older, less fuel-efficient vehicles and already pay a disproportionate share of gas tax relative to income.

Caltrans contracted the Foundation for California Community Colleges to research the priorities and concerns of low-income individuals, including awareness of transportation funding and data-collection privacy concerns, and separate research has examined financial impacts on urban versus rural households under various road charge scenarios.⁸ Whether a future system includes tiered rates, income-based credits, or exemptions for essential travel is a policy question the Legislature has yet to answer.

Key Dates to Watch

2024: Live collection pilot operating under SB 339, with participants paying 2.8 cents per mile (flat-rate group) and receiving credits for gas taxes paid.
December 31, 2026: Deadline for the final SB 339 pilot report to the Legislature, covering cost-related issues, implementation methods, and a comparison of the two fee-calculation approaches.³
January 1, 2027: Deadline for the California Transportation Commission’s report on research and recommendations to the Legislature’s policy and fiscal committees.²
January 1, 2035: New sunset date set by AB 1421 for the pilot program framework, replacing the original 2027 expiration.¹

If you’re a California driver reading about AB 1421 and wondering whether you now owe money per mile, the short answer is no. The bill buys the state time to finish studying the question. The debate that matters for your wallet is the one that will follow the 2027 reports.

1
California Air Resources Board. Assembly Bill 1421 (Wilson, Lori), Vehicles: Road Usage Charge Technical Advisory Committee
2
Digital Democracy. AB 1421: Vehicles: Road Usage Charge Technical Advisory Committee
3
California State Transportation Agency. SB 339 Road Charge Collection Pilot – Interim Pilot Report
4
Alternative Fuels Data Center. Zero Emission Vehicle (ZEV) Fee
5
LegiScan. California SB 339 2021-2022 Regular Session Chaptered
6
California Transportation Commission. Update on the Pilot Road Charge Rate for 2024-2025
7
California Department of Transportation. California Road Charge Pilot Program Final Report 2017
8
California Road Charge. Impacts to Key Communities