Can taxing trucks on miles traveled work?

• Tax base: Which trucks would be taxed and on which roads the tax would apply.
• Rate structure: Whether the tax would be uniformly applied to all trucks or vary by trucks’ configuration, weight or location.
• Implementation: Whether to assess taxes using odometer readings, radio-frequency identification readers (like those used on toll roads) or electronic logging devices (ELDs).

Cost factor

Of the four states with truck VMT taxes, Kentucky charges a flat rate of about 3 cents per mile, and the other three charge rates that vary by trucks’ weight, ranging from about 1 to 29 cents per mile, according to CBO.

Because most trucking companies already track their vehicles, the Reason Foundation, a libertarian think tank, argues that implementing a VMT tax on only commercial trucks would require overcoming fewer administrative and privacy hurdles than implementing such a tax on all vehicles.

However, putting a federal VMT fee in place “would impose greater costs on the federal government and trucking companies than increasing existing taxes,” CBO pointed out in its study.

A study published earlier this year by the American Transportation Research Institute (ATRI) put a price tag on those costs: upwards of $20 billion.

Industry pushback

The trucking industry’s most powerful lobbying group, the American Trucking Associations (ATA), which favors raising fuel taxes to strengthen the HTF, has long been wary of a federal VMT tax — particularly one that would apply only to trucks.

Testifying at a Senate hearing on Tuesday, ATA President and CEO Chris Spear warned not only of the high costs, but of problems with tracking the tax through an ELD. “Federal regulatory requirements for these devices were designed to ensure an accurate record of hours driven, not the number of miles driven,” Spear said. “Nor do the requirements provide an ability to broadcast data to taxing authorities. Furthermore, most commercial vehicles — 72% — are not required to be equipped with recorders.”

Spear also pointed out that even strong supporters of a VMT tax acknowledge that full implementation is still a decade away. “Failure to provide interim funding for urgent surface transportation needs while these solutions are developed would be highly irresponsible.”

A fan in ‘Secretary Pete’?

Despite its proposal to raise taxes to pay for infrastructure, the Biden administration has publicly been open to user fees as well.

When U.S. Rep. Doug LaMalfa, R-California, who represents a rural district in the northern part of the state, raised concerns in March at a congressional hearing that a VMT tax could disproportionately harm small truckers in his district, Secretary of Transportation Pete Buttigieg acknowledged the problem — but did not dismiss the possibility of a VMT fee.

“What’s really driving this is the awareness that as vehicles become more fuel-efficient — or move off gasoline entirely — we need to make sure that if we’re on a user fee system that they’re somehow paying in,” Buttigieg testified.

“The gas tax was the simplest way to have a user fee because we used to know for a fact that the more you drove, the more gas you’d use. Now it’s not that simple. There are a lot of ways we can think about setting up [a VMT], whether it’s a rebate mechanism or a phase-in approach so that it’s not disproportionately hurting those who are already hard-hit.”

Related articles:

• I can drive for miles and miles … can states tax me on it?
• ATRI puts $20B price tag on vehicle-miles-traveled tax
• Bipartisan report argues for ‘one last increase’ in diesel tax

Click for more FreightWaves articles by John Gallagher.