The 88th General Assembly
has convened the 2012 fiscal session

Wednesday, December 12, 2007

Oregon considers modification of motor fuel tax

To combat a drop in traditional gas tax revenues due to inflation and more fuel efficient vehicles, Oregon is considering abandoning the flat 24 cent per gallon motor fuel tax in that state and implementing a "user tax" based on the number of miles driven. How would it be implemented? Drivers would have computerized mileage counting equipment added to passenger vehicles, and gas stations would have special pumps equipped with mileage reading equipment that would tax the driver at 1.2 cents per mile.

Unless it's universal, I'm pretty skeptical for two reasons: (1) the station billboards in that state would apparently advertise seemingly inexpensive gasoline since the 24 cent per gallon tax isn't added to the price, even though an extra $5 or $6 will be tacked on after the mileage is computed, and (2) how do you defend against fraud and out of state drivers without the equipment? It also seems to be a way to increase taxes without actually increasing the motor fuel tax. Here's a related column.