New Miles Traveled Tax Made Possible With GPS
For corporate fleet tracking managers responsible for overseeing the operation and maintenance of a company’s fleet of service vehicles, fuel costs are a vital issue regardless of the size of the company or project they are involved with. While fleet tracking operators may gripe about the increasing price of gasoline, state governments have historically relied upon to the revenue gained from taxing gasoline consumption in order to finance and maintain roads and similar infrastructure within their jurisdiction. The ever-increasing popularity of hybrid and electric vehicles as a substitute for traditional gas-guzzling automobiles has led to a dramatic decrease in gasoline consumption, and consequently a dramatic decrease in gasoline tax revenue realized in many states throughout our nation. With thousands of miles or roadways and a limited budget, many states are looking for volunteers to experiment with technology that could lead to new ways of paying for highway construction and maintenance.
The Minnesota Department of Transportation (MnDOT) has struck a deal with approximately 500 urban and rural motorists to begin testing gear that contains GPS tracking devices in order to track the number of miles travelled. Slated to begin in July, this experiment is part of a potential plan to implement a miles travelled tax in response to the decreasing need of gasoline by fleet tracking professionals and everyday commuters alike. The state of Minnesota is facing a shortfall approaching $50 billion in highway-related construction work in the next 20 years. While the Minnesota state government currently relies solely on gasoline taxes, vehicle registration fees, and motor vehicle sales taxes, it hopes that with the help of GPS tracking technology a miles travelled tax will become a plausible addition to their revenue stream.
The experimental study is aimed to continue the principle of using motorist fees to pay for most highway work, which has traditionally been the standard throughout the United States. While it is too soon to say whether a miles fee would eventually replace a gas tax or simply complement it, the GPS tracking data collected from the 500 participants representing a variety of driving behaviors and situations will serve as a firm indicator of future success.
While Iowa, Nevada, and Texas have also been studying a miles-based tax with regards to hybrid and electric vehicles, Minnesota is the first state that would mandate GPS tracking-based miles travelled taxes on all vehicles. With the popularity of fuel-efficient vehicles not expected to slow down anytime soon, utilizing GPS tracking technology is sure to enter the realm of possibility as a way to increase revenue in many more states in the coming years.