Understanding the New Gas Taxes
Lynchburg, VA - Lots of questions are surfacing as we head toward a new transportation funding system in Virginia.
The reform passed in the state Senate Saturday in a 25 to 15 vote, sending it to Governor McDonnell's desk for signature.
The new bill can be pretty confusing, but all people really want to know is will they be paying more in taxes?
The short answer, according to law makers is, yes.
But let's break it down for you.
Currently, no matter if you drive a car fueled by gasoline or a truck fueled by diesel, you pay a 17.5 cents per gallon tax.
Under the new system, there is no tax per gallon; so in essence, gas should be 17.5 cents cheaper per gallon.
But now, there's a 3.5% wholesale tax charged to gas stations on all gasoline purchases, and a 6% wholesale tax charged to stations on all diesel purchases.
The general consensus among law makers, is the gas station will pass along that 3.5% or 6% on to their customers.
So what does that mean for you?
Let's say a gallon of gas costs $3.69 under the old system. Under the new system it should cost around $3.64. A savings of about $0.05 per gallon.
But a gallon of diesel that currently costs $3.99 per gallon, would then cost around $4.05 per gallon.
An increase of about $0.06 per gallon.
But another part of the Transportation Bill is an increase to the states sales tax from 5% to 5.3%.
So despite saving a little at the pump if you drive a car fueled by gas, you will be paying more in every other store you shop in.
Another interesting point is despite the Republican controlled House of Delegates and Senate, the bill passed with a majority of the support coming from Democrats.
But again, this bill is still awaiting Republican Governor Bob McDonnell's signature.
If he does sign it, the new taxes will go into effect July 1st, 2013.