Virginia looks at eliminating gas tax

January 21, 2013 12:00 AM

Most states in the U.S. currently impose a gas tax, with the finances coming from it used to support road work and public transportation. Recently, the state government in Virginia has begun exploring different ways to cut down on the gas tax while still maintaining the funds needed to support other projects.

According to AutoBlog, a new proposal from Virginia governor Bob McDonnell would eliminate the 17.5-percent gas tax while raising the sales tax from 5 percent to 5.8 percent. Drivers of alternative-fuel or hybrid vehicles would also have to pay an annual fee of approximately $100. The federal tax rate and the tax on diesel fuel would remain in place.

"The gasoline tax, I've always felt was a dinosaur tax," Virginia Speaker William J. Howell told The Washington Post. "It's a tax that's losing value every year."

The reaction to the policy has been mixed. Some shoppers are hesitant about being forced to pay for road repair when they buy goods, as opposed to having people who use more gas - and therefore likely drive more - provide the tax money to pay for transportation projects. It's also unclear if the move would affect how a driver's disposable income or change gas usage, which could impact scheduled maintenance as well as standard wear and tear.

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