![]() ![]() Last year, the House passed a bill that would have created a federal pilot program to test a vehicle miles-traveled (VMT) tax. GPS units on board a vehicle can record distance, assign it to the appropriate taxing jurisdiction, and calculate the amount owed. This could involve payments at the gas pump, billing, or automatic deductions for a prepaid customer account. The application of VMT fees is envisioned as using an onboard vehicle device to capture the distance driven through GPS or other technology and relate that to a method of charging. Rates could be structured to help reduce congestion and harmful emissions, metering devices could provide value-added services (e.g., safety alerts, real-time traffic information and routing assistance, and the ability to save money with pay-as-you-drive insurance), and the system could generate rich travel data for improved transportation planning. Beyond providing a more stable revenue stream, VMT fees could support many other goals. The main reason for this large increase in costs is the shift in collection points – from a couple of hundred fuel terminal operators to every registered motor vehicle in the U.S. The American Transportation Research Institute (ATRI) determined that replacing the federal fuel tax with a VMT tax that is assessed on 272 million private vehicles could result in collection costs of more than $20 billion annually – 300 times higher than the federal fuel tax. Ultimately though, Congress is responsible for the deficit spending and the lack of sustainable funding for the Highway Trust Fund, not truck drivers. This is increasing pressure on transportation policy makers to search for new, viable road financing mechanisms. Since 2000, fuel tax revenues have declined significantly as a result of less driving and increasing fuel efficiency. As fuel tax revenues dwindle, policymakers have had to divert billions from the general fund and other non-transportation funds to pay for infrastructure. This tax could also be a combination of flat and variable fees. This tax could be either a flat fee (like a fixed number of cents per mile), or a variable fee based on considerations such as time of travel, congestion levels on a facility, type of road, type and weight of vehicle, vehicle emission levels, and ability to pay of the owner. as an infrastructure funding mechanism to replace, or supplement the fuel tax, which has been generating billions less in revenue each year due to increasingly fuel-efficient vehicles. This tax has been proposed in various states in the U.S. driver for miles driven rather than the amount of fuel that goes into the vehicle. This is a proposed tax that would charge every U.S. What is the Vehicle Miles Traveled Tax and Why Does it Matter?
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