Controversial Passenger Vehicle Tax Moves to Ways and Means

By Taxpayers Association of Oregon

Controversial Passenger Vehicle Tax Moves to Ways and Means

Last week, the Joint Tax Committee moved HB 2342 out of committee to Ways & Means. Adopting the -9 amendments, the bill caused multiple members of the committee to express concerns.

The bill has a 3/5ths requirement to pass both floors – i.e., if signed into law, will implement a new tax. The proposed tax and fee structure is intended as a replacement funding source for Oregon’s roadways. The new tax theoretically backfills declining road investments resulting from our per-gallon gas tax and ever-increasing vehicle efficiencies. Starting with passenger vehicles with a model year on 2026, that have an EPA rating of 30 miles per gallon or more are subject to the tax.

While the committee members debated a replacement for declining revenues in order to maintain Oregon’s roadways, many expressed concerns over the potential privacy issues that could develop though future implementation. Further, the bill contains a “pollution fee” component that many identified as a potential mechanism to increase revenues above what would otherwise be a revenue neutral offset of taxes and fees paid into Oregon’s Highway Trust Fund.

The bill now goes to Ways and Means, where the Chairperson of the Joint Transpiration Committee is also the chair of the Ways and Means Subcommittee on transportation and Economic Development.