More on Virginia’s Plan

Not only is Virginia placing a levy against alternative fuel vehicles, they are also drastically reforming the funding structure. A few highlights:

  • Dropping the 17.5 cent fuel tax
  • 3.5% wholesale tax on gasoline
  • 6% tax on diesel fuel
  • Boost state sales tax by .3% and shift $200 million a year from sales tax into the highway fund

Kind of interesting. That wholesale tax is just going to get passed on to consumers. And making the fuel taxes percentage instead of fixed means that as fuel prices rise they state will get more revenue… to a point. At some point rising fuel prices triggers a decrease in demand. I’ve not heard of anyone else doing fuel tax by percentage like this.

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