Virginia General Assembly Passes Transportation Bill / Awaits Gov. Signature

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HB 2313, which passed the House 60 to 40 on February 22 and the Senate 25 to 15 the following day, would raise $880 million for transportation annually while eliminating motor fuel taxes and replacing them with wholesale taxes, effective July 1. It would also increase the sales tax rate on non-food items from 5 percent to 5.3 percent.

According to Gov. Bob McDonnell, the current 17.5-cent-per-gallon fuel tax is worth 45 cents on the dollar of its value in 1986. Under the bill, it would be replaced with wholesale taxes of 3.5 percent and 6 percent on gasoline and diesel fuel, respectively. Sales tax on non-food items would rise from 5 percent to 5.3 percent to allocate more general fund revenue to transportation.

The sales tax in the northern Virginia and Hampton Roads regions would rise to 6 percent, with additional funds used for transportation projects in those regions.

A registration fee of $100 for electric, alternative fuel, and hybrid vehicles would also go into effect, along with an increased levy on car sales from 3 percent to 4.3 percent.

The Governor is expected to sign the bill.

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