Road-use tax pilot program in Washington state begins in two weeks

Washington state will launch its road-use tax pilot program in two weeks, according to state officials. The pilot program will last approximately one year and can potentially replace the fuel tax if proven successful.

In partnership with the Washington State Department of Transportation, Washington State Department of Licensing, Federal Highway Administration, City of Surrey, Oregon Department of Transportation and a few others, the Washington State Transportation Commission will recruit at least 2,000 drivers to participate in the road-use tax pilot program.

For one year, participants will spend an average of only 10 minutes a month submitting data. Four reporting options are on the table:

• Mileage permit – pre-selection of block of miles;
• Odometer readings – reported quarterly electronically or in person;
• Plug and play – automated mileage meter with GPS and non-GPS options; and
• Smartphone app that automatically collects and submits miles.

The pilot program will charge drivers 2.4 cents per mile, the equivalent to what a 20.5 mpg vehicle pays under the current 49.4 center per gallon fuel tax. Participants will not make any real payments. WSTC calculates that at 12,000 miles traveled per year, or 1,000 miles a month, the 2.4-cent mile tax will come to $24 a month or $288 a year. Under those same conditions, drivers are paying an average of $289.17 a year under the gas tax.

Participants will be recruited from all over Washington, as well as those who frequently drive into Washington from places like British Columbia, Oregon and Idaho. Participants are being incentivized with gift cards awarded for completing key tasks.

As revenue from fuel taxes continues to decrease, causing a large transportation funding gap, states are exploring alternatives to fill their coffers. One option gaining popularity in the West is a use fee. Several states, including California and Oregon, have already conducted similar pilot programs to determine whether or not a use tax is as feasible and profitable in practice as it is on paper.

According to WSTC, the state received a federal grant to fund the pilot project. Six other states received similar grants: California, Delaware, Hawaii, Oregon, Minnesota and Missouri.

If successful, Washington will consider replacing the gas tax with the road-use tax. It will not be an additional tax. Even if a road-use tax is proposed, it could be another eight years before such a tax goes through the legislature, passes and goes into effect.

In December, Caltrans released a report on its road charge tax pilot program, which was shown to be successful among the vast majority of participants.