Virginia’s Transportation Legislation Brings Fuel Tax Changes

Virginia’s recent transportation legislation will make significant changes to the way fuel taxes are calculated when the law takes effect July 1.

The state's current 17.5 cents per gallon excise tax will be replaced with a sales tax on the wholesale price of fuel at a rate of 3.5 percent on gasoline and  6 percent on diesel. Virginia's Department of Motor Vehicles commissioner will establish the tax rate twice a year based on the average of wholesale price of fuel (less taxes) during the prior six months. The legislation also establishes a "floor" on the wholesale price of fuel that will not be less than the price as of Feb. 20, 2013.

In response to concerns that drivers of diesel cars will be burdened by the higher tax rates intended to target the trucking industry, the legislation allows drivers of diesel cars and light trucks a refund of part of the diesel tax they pay at the pump. The refund will be “in an amount equal to a 2.5 percent tax rate on such fuel.”

The legislation also raises the general state sales tax from 5 percent to 5.3 percent with the increase going toward transportation; increases the tax on car sales from 3 percent to 4.3 percent, and institutes a new $100 tax for hybrids and electric vehicles.

Once signed, the state's Department of Motor Vehicles (DMV) Commissioner will be working to issue guidelines or regulations before implementation on July 1. NATSO will advise members when the guidelines are issued.



This article originally ran in NATSO News Weekly (NNW), NATSO's member only weekly electronic newsletter. NNW is packed with the latest updates on government and business issues affecting the truckstop and travel plaza industry.

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