Virginia House Of Delegates Votes To Repeal Hybrid Tax

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Virginia hybrid-vehicle owners rose up with a collective roar, and on January 16 the commonwealth took a big step toward getting rid of its much-reviled "hybrid tax." Virginia’s House of Delegates voted overwhelmingly to delete a $64 annual license tax imposed last year as part of a breakthrough transportation funding package. The state Senate has passed a comparable bill.

More than 7,700 owners of Priuses, Civics, and other hybrids had joined with their environmentally minded supporters in a petition drive seeking a reversal of the fee by the General Assembly. They flooded lawmakers with comments. "Backward thinking," wrote one. "Ridiculous," said another. "Just one more stupid VA law," wrote another.

One of the ideas behind the tax was to make sure all drivers pay their share of the cost of building and maintaining roads, which is funded in part through a tax on gasoline. If drivers use less gas, the thinking went, they end up contributing less for public roads.

Opponents of the tax argued that it was designed and applied illogically. The owner of a Lexus hybrid getting 20 miles per gallon is currently subject to the $64 annual fee, but the owner of a Toyota Corolla getting 29 miles to the gallon is not.

All-electric cars will still have to pay the yearly $64 fee, and other green-leaning drivers of cars powered by liquefied natural gas also have to pay an alternate tax, because the gasoline tax that doesn’t apply to them.

If the new measures become law as written, hybrid owners who prepaid their taxes for the year that begins July 1 would get a refund for that year, costing the state $2.2 million, according to a legislative analysis. Revenue losses would total $6.9 million in the first year and more than $10 million by 2020, according to the analysis.

VA is seen as going against a tide currently shifting toward imposing fees for alternate fuel vehicles, with other states studying the implementation of Vehicle Miles Traveled (VMT) taxation. 

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