The State of California has yet to pass a mileage tax to replace the gas tax.

Palmdale, California,- Assembly Bill 1421, a legislative measure, has been approved to extend a long-standing study on the feasibility of implementing a mileage-based taxation system for drivers in the state.

Last week, the California Assembly passed Assembly Bill 1421. The bill mandates the California Transportation Committee to conduct a study on the idea and submit a comprehensive report next year.

The revenue generated from this tax would be allocated towards funding road maintenance and other transportation-related expenditures within the state.

California currently has the highest gas taxes among the 50 states. The state’s current excise tax is 61.2 cents per gallon, in addition to the state’s 2.25% sales tax.

The bill requires the California Transportation Commission to compile and consolidate data from state, local, and private entities. The commission must submit a comprehensive report to the Legislature by January 1, 2027.

The proposed study will now be sent to the Senate for a series of hearings and a final vote.

Senator Suzette Martinez Valladares joined her Republican colleagues in the California State Senate in sending a letter urging Governor Gavin Newsom to immediately convene a special session of the Legislature to address the fallout from the impending closure of Valero’s Benicia refinery, scheduled for April. This marks the second major refinery shutdown in California in the past six months.

“Bad policy has consequences,” said Senator Valladares. “California’s extreme regulatory environment is forcing refineries to shut down, reducing fuel supply and driving gas prices higher. The Governor and legislative Democrats talk about affordability, but they refuse to acknowledge that it is their own policies that are making everyday life more expensive for working families.”

Valero’s Benicia refinery is one of the largest in Northern California, accounting for nearly 10 percent of the state’s total refining capacity. Combined with the recently shuttered Phillips 66 refinery in Los Angeles, these two facilities produced roughly 20 percent of California’s gasoline supply. Their closures will further tighten fuel markets, disrupt supply chains, and push prices even higher as the state becomes increasingly reliant on imported fuel and alternative sources to meet demand.

“There’s a reason gas prices continue to fall across the country while Californians keep paying more,” Valladares added. “If the Governor fails to act, Californians could soon be facing $8-per-gallon gas. That cost won’t stop at the pump—it will ripple through the economy, raising the price of food, goods, and services.”

Phillips 66 cited long-term sustainability concerns and unfavorable market dynamics as reasons for closing its Los Angeles refinery. Valero has pointed to mounting regulatory pressures and an increasingly challenging operating environment. The message from both companies is clear: California’s policies have made it nearly impossible to continue doing business in this state.

Click here to see the letter that Sen Valladares and her colleagues sent to Governor Newsom today.

Assemblymember Juan Carrillo has posted on his social media about the AB1421. 2/6/26

“There’s been a lot of confusion about AB 1421. The facts are simple: it does not raise taxes or create new fees. It authorizes a study nothing more.” Assemblymember Juan Carrillo

Photo / Freeway : Vladimir Gonez.