Nevada bill AB401: The case for taxing vehicles based on the miles they travel

“Fuel tax has served us well but has become increasingly dysfunctional as the world around us has changed,” said Derek Morris, the engineer and former Washoe County transportation leader who spearheaded the proposal. “If we think about it rationally, they should pay the same (toward highways) but they’re not.”

What Assefa and Morris are proposing in AB401 is the creation of a DMV fee based off vehicle miles traveled (VMT). A fee of 1 cent per mile would apply to any “light-duty vehicle” — meaning most SUVs, sedans, pickup trucks and cars — registered in the state, regardless of its fuel efficiency. The fee would be charged alongside annual vehicle registration and most cars would verify their mileage as part of their already required annual smog check.

For vehicles that use gas, the VMT fee would be offset by a credit for fuel taxes paid at the pump. That credit would be based off estimated city/highway miles per gallon ratings already calculated at the federal level through the Environmental Protection Agency. The system would be entirely automated and not require drivers to track their own fuel spending or mileage.