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Sunday, October 2, 2022

Virginia Opts For Fuel Tax Increase Over Tolling I-81

 

Both the Virginia House and Senate accepted Gov. Ralph Northam’s recommended amendments to the I-81 Corridor Improvement Program and Fund bill.

Unlike previous versions, Northam’s amendments offers more immediate funding without tolls by using a fuel tax increase instead.

To start, the bill calls for a fuel increase. Both gasoline and diesel will increase by 2.1%, or 7.6 cents and 7.7 cents per gallon, respectively. The increase applies to the Interstate 81 region.

In addition to the regional fuel tax increase, heavy duty trucks will incur four more fee increases in various areas.

First, diesel will get another tax. In addition to the regional fuel tax increase, diesel will incur a statewide tax increase of 2.03% or 6.8 cents per gallon. If passed, that tax will go into effect on July 1, 2021.

The bill also increases the International Fuel Tax Agreement surcharge this July. The additional amount per gallon will be calculated by multiplying the average fuel economy by $0.01125. “Average fuel economy” is calculated by dividing the total taxable miles driven in the state by the total taxable gallons of fuel consumed, as reported in IFTA returns in the preceding taxable year. On July 1, 2020, that increase jumps to $0.0225.

In lieu of the IFTA increase, carriers registering trucks that are not registered under the International Registration Plan will pay a fee of $150 per year for each qualified highway vehicle. From July 1, 2019, through June 30, 2020, this fee will increase proportional to the IFTA tax increase. Every July 1 beginning 2020, this fee will be adjusted based on the percentage change in the IFTA tax.

The bill calls for an additional fee for the registration of all vehicles not used for the transportation of passengers. 

Those increases are:

  • Vehicles 10,001 through 15,000 pounds by $6 per 1,000 pounds.
  • Vehicles 15,001 through 25,000 pounds by $7 per 1,000 pounds.
  • Vehicles 25,001 through 29,000 pounds by $9 per 1,000 pounds.
  • Vehicles 29,001 through 40,000 pounds by $10 per 1,000 pounds.
  • Vehicles 40,001 through 45,000 pounds from $11.15 to $22.50 per 1,000 pounds.
  • Vehicles 45,001 through 50,000 pounds from $11.25 to $22.50 per 1,000 pounds.
  • Vehicles 50,001 through 55,000 pounds from $13.25 to $23.25 per 1,000 pounds.
  • Vehicles 55,001 through 76,000 pounds from $15.25 to $23.25 per 1,000 pounds.
  • Vehicles 76,001 through 80,000 pounds from $16.25 to $23.25 per 1,000 pounds.
  • All private and for-hire/for-rent vehicles would pay the same rate per 1,000 pounds.

The above additional fees do not apply to vehicles used exclusively for farming.  The bill establishes additional fees specifically for farm vehicles.