The Virginia General Assembly took a major step forward on Transportation funding this year by passing the Virginia Historic Transportation Funding Bill which will generate $880 million a year to address Virginia’s critical transportation infrastructure needs. The plan will also ensure that we have a transportation system that serves our mobility needs and fosters economic growth and development.The transportation plan passed includes:
- Gas tax. Replaces the 17.5 cents per gallon gas tax with a 3.5% wholesale tax paid by distributors and a 6% wholesale tax on diesel.
- Sales tax. Increases the statewide sales tax on most items from 5% to 5.3%.
- New car purchases. Raises the sales tax on motor vehicles from 3% to 4.3% and raises the minimum titling fee to $75.
- Alternate-fuel vehicles. Creates an annual fee of $100 on alternative fuel vehicles.
- General fund. Increases the amount of general fund money dedicated to funding transportation from 0.5% to 0.675% of the sales tax.
- Internet Purchases. Uses a substantial portion of future sales tax proceeds generated from internet purchases (if Congress passes the Marketplace Equity Act) for transportation. If the Act fails to pass, an additional 1.6% tax will be applied to the wholesale gas tax.
- Regional Funding. Creates a regional funding mechanism for Northern Virginia and Hampton Roads to fund transportation projects in those respective areas.
“The Virginia Historic Transportation Funding Bill reflects a great deal of compromise between Democrats and Republicans in both the House and Senate,” said Barry DuVal, President and CEO of the VA Chamber. “Although the plan does not contain one hundred percent of what either side hoped for, the compromise will greatly benefit the Commonwealth as a whole. I applaud members of the General Assembly for their willingness to advance this issue of importance to Virginia’s business community.”
If you would like to read the entire Virginia Chamber Newsletter click here.