Gas Tax Holiday Proposed By Youngkin As Average Tops $4

Vienna VA

16 March, 2022

3:46 PM

Description

VIRGINIA — As gas prices hit record highs in Virginia and around the U.S., Gov. Glenn Youngkin is proposing a three-month tax holiday of the state's gas tax. Youngkin is proposing legislation to suspend Virginia's motor vehicle fuels tax during May, June and July and phase it back in August and September. The current gas tax is 26.2 cents per gallon for gasoline and 27 cents for diesel. The governor will propose the bill in an upcoming General Assembly special session. The tax holiday would be supported by $437 million in "unanticipated transportation revenues," according to the governor's office. "These rising gas prices are hurting Virginians, and we need to do something about it," Youngkin said in a statement. "The Commonwealth Transportation fund has over $1 billion more revenue than anticipated this year and next, from the taxes paid by the people of Virginia. This bill gives money back to them in the form of a gas tax holiday." The proposal comes as Virginia's gas price average is above $4, according to AAA. The current Virginia average is $4.194, up from $3.380 one month ago. In Northern Virginia, the average is $4.267, up from $3.484 a month ago. The highest-ever average across Virginia — $4.259 — was recorded on March 11. Youngkin believes Biden administration policies restricting domestic energy and gasoline supply have contributed to inflation, along with the Russian invasion of Ukraine. According to Associated Press fact checks, analysts have attributed increasing gas prices to demand increasing in the global market faster than oil is produced as pre-pandemic travel returns. Analysts pointed to limitations on Russian oil exports as the major factor in the most recent gas price spike. Gas tax revenue in Virginia supports the Commonwealth Transportation Fund as well as part of the state's sales and use tax. The fund, which supports maintenance and construction for different forms of transportation, has $671.4 million in unanticipated revenue in fiscal year 2022 and $457.6 million in fiscal year 2023, according to Youngkin's office. In neighboring Maryland, Gov. Larry Hogan and legislators agreed to temporarily suspend its gas tax.