Michigan Has Planned Mileage Tax Pilot Study
The state has contracted a firm to test a potential per-mile road usage charge for drivers.
Updated on Sept. 28, 2026 in Electric Vehicles
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The Michigan Department of Transportation awarded a $6.3 million contract to CDM Smith to develop a feasibility study and pilot program for a per-mile road usage tax. This initiative aims to explore replacing traditional gas taxes with a mileage-based fee system.
Why it matters
The project addresses long-term state transportation funding as vehicle fuel efficiency increases and electric vehicles, which currently make up 1.2% of Michigan registrations, become more common. It aims to modernize how road maintenance is funded as revenue from fuel taxes declines.
The $6.3 million contract will support a pilot program targeting 1,000 participants starting in February 2027. This initiative follows a 2024 survey where 43% of respondents expressed negative views toward mileage taxes.
The players
Michigan Department of Transportation
The state agency responsible for managing road infrastructure and transportation funding initiatives.
CDM Smith
An engineering and consulting firm with extensive experience managing mileage tax pilot programs in multiple states.
The details
The pilot program will involve project management, planning, and procurement to test both technical feasibility and public acceptance. CDM Smith will lead the efforts, drawing on previous experience with similar mileage tax initiatives in Washington, Hawaii, Minnesota, and Utah. The study will evaluate how a per-mile charge could function to replace existing taxes at the pump.
Timeline
A public opinion study on mileage taxes was conducted in 2024.
The State Administrative Board discussed the tax work on June 2, 2026.
An advisory committee meeting was held in August 2026.
The six-month pilot program is scheduled to begin in February 2027.
The Home Front
This study follows a mandate established by the 2026 fiscal year state budget to evaluate future road funding alternatives. It marks a significant shift in state infrastructure planning as officials look for ways to sustain revenue amid changing vehicle technology.
Drivers should monitor future updates regarding the pilot program, as it may influence long-term household transportation costs. Keep an eye on public outreach opportunities if you are interested in participating in the 1,000-person study.
The takeaway
The state is testing a shift away from traditional gas-based road funding to accommodate newer vehicle types. Homeowners should track how these proposed changes to transportation funding may affect annual vehicle operation costs in the future.
What happens next
The pilot program for the mileage tax is scheduled to begin in February 2027 and will last for six months.
Further reading
For more on the changing landscape of vehicle ownership, explore our Electric Vehicles section.
Source note: This article includes information reported by Michigan Capitol Confidential.
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Do you support replacing traditional gasoline taxes with a per-mile tax for road funding?
