A U.S. senator is pressing the Treasury to lift the mileage tax break used by ride-hail and delivery drivers, arguing the change is needed now as fuel bills climb. The request, aimed at the IRS’s annual per‑mile rate, seeks immediate relief that could lower out‑of‑pocket costs for thousands of gig workers.
Democratic Sen. Ruben Gallego of Arizona sent a letter on Thursday to Treasury Secretary Scott Bessent, urging a raise to the federal **standard mileage rate**, which currently stands at 72.5 cents per mile. Gallego asked that any increase be applied retroactively to March 1, the date he identifies as the start of a recent spike in pump prices.
Gas prices have climbed to nearly $4 a gallon this month, a jump Gallego links to geopolitical tensions in the Middle East following recent U.S. and Israeli military activity. For drivers who pay for fuel and vehicle wear and tear themselves, the mileage deduction is a simple way to recoup part of those costs; an increase would boost the tax relief available to the self‑employed and independent contractors who rely on their cars to earn income.
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Gig workers tell reporters higher fuel costs are already shrinking take‑home pay. Some drivers for services such as Uber and Lyft report turning down longer trips or limiting the areas they cover. At the same time, platforms including Uber and DoorDash have announced short‑term incentives — from cash‑back offers to mileage‑based payouts — intended to offset rising fuel bills.
What Gallego wants and why it matters
- Request: Raise the IRS standard mileage rate and make the change retroactive to March 1.
- Current rate: 72.5 cents per mile is allowed for business use of a personal vehicle.
- Who benefits: Independent drivers and delivery workers who claim the deduction instead of tracking actual vehicle expenses.
- Immediate effect: A retroactive boost would increase deductions on recent tax returns or amended filings, providing cash relief after the fact.
The IRS sets the standard mileage rate each year and can adjust it midyear in response to sharp shifts in fuel costs. The agency has done this before: in 2022 it temporarily raised the rate by 4 cents a mile after energy prices surged following Russia’s invasion of Ukraine. That precedent is the basis for Gallego’s appeal.
Raising the mileage rate does not directly lower the price at the pump, but it reduces taxable income for eligible taxpayers, effectively returning money to drivers through lower tax bills or bigger refunds. For drivers operating on thin margins, even a few cents extra per mile can change whether a shift is profitable.
Whether the IRS will act this time remains uncertain. Agency officials have authority to amend the rate when circumstances warrant, but they weigh a range of factors before making an adjustment. Any change would also have administrative implications for employers, tax preparers, and individuals who choose between the standard mileage rate and tracking actual vehicle expenses.
Gallego’s letter frames the request as an urgent, practical response to a sudden cost increase for working drivers. The coming days will show whether Treasury follows the 2022 example and issues a midyear revision, or leaves the current rate unchanged as markets and policy debates continue to evolve.
