A method and system for communicating state information from a transponder to a reader. The transponder outputs linearly polarized RF signals having either a first polarization, such as horizontal, or a second polarization, such as vertical. The polarization is selected so as to indicate a first state or a second state. The reader detects whether received RF signals have the first polarization or the second polarization, and thereby determines the state of the transponder. In some embodiments, the reader may include two linearly polarized antennas, one with the first polarization and one with the second polarization, for receiving the RF signals from the transponder and determining the polarization of the received RF signals. The system may be implemented within an electronic toll collection system, wherein the transponders are affixed to the interior of vehicle windshields using a rotatable mounting mechanism having two selectable positions.