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Virginia: Gas Tax Increase Likely for January 2015


 Virginia gambled on online sales tax... and lost.

In 2013, Virginia lawmakers decided to link the fate of the state’s gasoline tax to the fate of a federal online sales tax legislation. Under HB 2313, the motor fuels tax imposed on gasoline would jump from 3.5% to 5.1% on January 1, 2015, unless federal lawmakers passed online sales tax legislation. If an internet sales tax is approved by the end of 2014, Virginia will not increase the gas tax.

Passage of an online sales tax by the end of 2014 now seems all but impossible, as House Speaker John Boehner is staunchly opposed to tackling online sales tax during the lame duck session. That means Virginia probably won’t receive the projected $320 million the online sales tax was expected to generate by 2018—money that was figured into the state budget.

Virginia Republican Delegate Bob Marshall has been working to prevent the gas tax increase from taking effect. On the other hand, Democratic Delegate Jennifer McClellan insists “the 45% increase shouldn’t cause a huge burden to tax payers” who already have one of the lowest gas taxes in the country.

For now, at least, the gas tax seems set to increase come January 1. The state needs money to fund transportation projects and education.

Automated sales tax software as a service helps businesses manage sales tax in Virginia and other states. Learn more.

photo credit: topher76 via photopin cc


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
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.