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Virginia: Plan to Swap Gas Tax for Sales Tax Flounders

  • Feb 7, 2013 | Gail Cole

 This Is What Virginia's Transportation Plan Looks Like Right Now.

"Flounder: to struggle; to move with difficulty, as in mud."

Virginia Governor Robert McDonnell's (R) plan to generate revenue for state transportation is floundering. Although approved by the House of Delegates' Finance Committee and passed by the General Assembly (with a few changes), the Governor's plan has been rejected by the Virginia Senate. The Senate refused to consider the governor's original plan and sent it back to committee.

The Road to the Future would eliminate the state gas tax and increase the state sales tax by 0.8%. Gov. McDonnell has called the gas tax a "stagnant revenue source." Under his original plan, approximately $3 billion in revenue would be generated for the state's transportation systems.

Two alternative plans, one presented by Sen. Frank Wagner (R-Virginia Beach) and one by Sen. Stephen D. Newman (R-Lynchburg), were also rejected, although they earned kudos for "rejecting the core trade-off in the governor's plan." Senator John Watkins (R-Powhatan County) said that "[b]oth [alternative plans] recognize the fallacy of swapping off the gas tax for the sales tax. The sales tax hits everybody, whether you use the transportation system or not."

Governor McDonnell recognizes that reaching agreement "is not easy work." He has urged lawmakers to act. He says, "[O]ur citizens have told us loud and clear that now is the time to get something done on transportation."

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.