Tax & Accounting Blog

Virginia Governor Proposes Gas Tax Cut, In Favor of Higher Sales Tax

Indirect Tax, ONESOURCE, Sales and Use Tax January 16, 2013

Gas pump Tuesday (1/8/13), Virginia Governor Bob McDonnell proposed cutting the state’s 27-year-old $0.175 per gallon gas tax, which would make Virginia the first state in the country to do so.  His proposal also  increases the general sales tax from 5% to 5.8%.  The gas tax currently accounts for 30% of the state’s transportation revenues, but with the proposal, $0.75 cents of the state’s sales tax will be contributed to the state transportation fund, up from the current $0.50; this is expected to generate more than $600 million in additional transportation funds.

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