Gas Tax Tops 40c Per Gallon, Up 150% in Four Years

Reposted with permission from Bacon’s Rebellion

By Steve Haner

Virginia’s motor fuel taxes rise again July 1, finally breaching 40 cents per gallon for gasoline. Four years ago the tax was 16.2 cents per gallon, but former Governor Ralph Northam (D) signed 2020 legislation to both increase the tax and to begin automatic annual inflation adjustments.

The tax becomes 40.4 cents per gallon. The inflation adjustment this year will add 1.3 cents per gallon, or an extra $13.50 annually for a vehicle owner purchasing 20 gallons per week. The same 1.3 cents is being added to the tax on diesel, which becomes 41.5 cents per gallon on July 1.

Virginia’s Division of Motor Vehicles continues to hide the full tax on its webpage by reporting it in two parts and in two different places. The motor fuels tax and related fee for underground storage tank maintenance are reported here. The separate wholesale tax, which was once regional but became statewide with the 2020 law, is reported here.

The previous rates are here. It is on this page that the decision to split the reporting and hide the true cost pays off for the government. Only when you look at the whole picture does it become clear the tax has risen about 150% for most Virginians in just four years. But who is counting?

But wait, there is more. The 2020 law also created a complicated tax on high mileage, hybrid and electric vehicles. That “highway user fee” or HUF is collected as part of the annual registration (register for two years and pay two years of HUF, I found out.)

Because the gasoline tax is going up, the HUF tax imposed after July 1 will also be more than 3% higher. Even a new and efficient gasoline-only vehicle is now hit with a huge HUF tax, and it doesn’t matter if you drive it only a small amount or that you are paying the full tax on the gas you buy. Thanks for trying to save the planet, but don’t expect the government to lose any revenue!

Is all this a bad thing? That depends on your point of view and your level of desire to see highways built and maintained. Without the inflation kicker, raising the gas tax was a deadly political move. But refusing to own up to what the full tax actually is, in fact working hard to keep that figure off public notifications, is wearing thin. Happy to take a few minutes to tell you what your own government (or regular news outlets) never will.