Del. Hugo’s plan to boost transpo funding would eliminate gas tax,  up sales tax

Delegate Tim Hugo (VA-40) plans to introduce a transportation funding bill that would eliminate the state sales tax on gasoline and replace it with a boost in the 5 percent sales tax to 5.9 percent. Hugo said his legislation will have two parts:

1) Eliminating the current 17.5-cent state motor fuels tax and offset those revenues with a 0.9% increase in the states sales and use tax.  This tax reform proposal to eliminate the gas tax would be the first of its kind in the nation.

According to the news release, revenues lost from the fuels tax would be replaced dollar for dollar by the 0.9 percent increase in the state sales and use tax. Thus, the state and local sales tax in Virginia would be adjusted from 5.0% to 5.9%. The change in the sales tax rate will apply only to those items currently subject to the 5 percent rate.

2) Allocates an additional 0.5 percent of the undesignated state retail sales tax revenue that is not currently earmarked for a specific program to the Commonwealth Transportation Fund.

Hugo was quoted in the news release as saying, “The construction and maintenance of Virginia’s roads and bridges are core functions of government that must - finally—be treated as such.”

The legislator is the Majority Caucus chairman for the House Republican Caucus. He is vice chairman of the Finance Committee and serves on the Commerce and Labor, Transportation, and Privileges and Election Committees. Hugo represents Catharpin, Gainesville, Haymarket, and Manassas in Prince William County as well as Centreville, Clifton, Fairfax, and Fairfax Station in Fairfax County.