Usage of electric vehicles (EVs) has risen in states across the country. This trend, coupled with the increasing fuel efficiency standards of gas cars, means that states are suffering from the resulting decline in revenues from gas taxes, which are intended to pay for the maintenance of roads and transportation infrastructure. This research explores options Vermont could implement to ensure a fair, feasible, and effective mileage-based user fee (MBUF) system to replace declining gas tax revenues as electric vehicle adoption grows. MBUFs are fees that are collected in proportion to the amount of miles driven by an individual. While Vermont plans to enact an MBUF in 2027, the state is in the process of determining the best method for tracking miles, ensuring the policy generates sufficient revenue, and addressing equity concerns.

The Vermont State Senate Committee on Transportation is interested in learning about the implementation, prospective revenue, and equity of a mileage-based user fee. To inform these decisions, this project reviews existing research, carries out case studies of Oregon, Utah, and Virginia—three states with operational MBUF programs—and conducts interviews with Vermont EV drivers to assess public opinion on different tracking options. This report provides Vermont policymakers with evidence-based recommendations on the most practical and equitable approach to MBUF implementation. These recommendations include using odometer inspections and/or app-based methods to track miles, considering the enactment of a kWh tax on charging stations, and exercising caution with the use of third-party account managers.