Republican lawmakers are pushing for Maine to eliminate the state’s vehicle excise tax and replace it with an annual mileage-based fee.

Drivers in Maine currently have to pay an annual excise tax on their vehicles, the amount of which is calculated based on a vehicle’s age and manufacturer’s suggested retail price (MSRP).

LD 1194 — sponsored by Sen. Joseph Martin (R-Oxford) and cosponsored by Rep. James E. Thorne (R-Carmel) — would phase this tax out over the next five years, reducing it by 20 percent each year. In its place, the state would begin collecting a mileage-based fee every year, beginning on July 1, 2027.

Mileage amounts would either be self-reported by vehicle owners using a digital system or by mechanics during the annual routine vehicle safety inspection.

Most drivers would be charged at a rate of one cent per mile driven. According to Kelley Blue Book, most vehicles are driven an average of about 14,500 miles each year, meaning that many Mainers would likely pay around $145 each year.

The first 10,000 miles driven every year would be exempt from this tax for those who are over the age and 65, as well as for those who reside in a household with an annual income of less than $40,000.

Electric and hybrid vehicles would be required to pay a flat annual fee “equivalent to the average usage-based infrastructure fee for a motor vehicle.”

As part of the strategy for phasing out the state’s excise tax, new cars sold after July 1, 2025 would be exempt from excise tax outright. For everyone else, excise taxes would be entirely eliminated by July 1, 2029.

The revenue from the mileage-based fees would be deposited in a newly-created Maine Transportation Fund, at which point they would be distributed to municipalities as appropriate, as well as into the Highway Fund.

The Maine Transportation Fund would also be responsible for “maintaining and repairing roads, [as well as] maintaining and repairing bridges and funding transportation infrastructure projects.”

By January 1, 2026, the Department of Transportation (DoT) would be required to submit a report to the Transportation Committee detailing their plan for implementing the mileage-based fee outlined in the bill.

A report on the “compliance, effectiveness and equity of the usage-based infrastructure fee” would need to be submitted to the Committee by January 1, 2035.

Sen. Martins’ bill currently contains an emergency preamble, meaning that if it wins the support from at least two-thirds of lawmakers in both the House and Senate eventually vote in favor of it, the law would go into effect immediately.

Click Here for More Information on LD 1194

Other lawmakers this session have introduced legislation that takes aim at Maine’s annual vehicle safety inspections.

Under a bill introduced by Rep. Ann Fredericks (R-Sanford), mandatory safety inspection requirements would be repealed for the majority of cars that are driven by Mainers on a daily basis.

“Other states have already abolished this antiquated requirement that is an inconvenience,” Rep. Fredericks said..

The bill would not alter inspection rules for commercial vehicles, trailers, semitrailers, and fire trucks, according to the official summary of the legislation.

Another bill looks to amend state law so that vehicle safety inspections are only required every other year, instead of annually.

Public hearings have not yet been scheduled for any of these bills, although the Transportation Committee can be expected to put them on the calendar at some point in the near future.