New Transportation Bill in VA Affects Real Estate

The Virginia General Assembly passed historic legislation to secure a comprehensive, long-term transportation funding and reform package for Virginia. We would like to thank all Virginia’s REALTORS® who answered the call to action on transportation. Your response helped make this historic legislation pass.

Transportation is a critical issue for Virginia. Without reliable roads and public transportation systems, the state becomes less attractive for businesses looking to move or expand. Realtors asked VAR to help push for a change to the state’s transportation funding and we obliged.

The bill would eliminate the $0.175 per-gallon gas tax that consumers pay at the pump, and it raises revenues through a variety of new and increased taxes:

• A new 3.5% tax on gasoline at the wholesale level (about $0.12 per gallon at current prices)
• A new 6% tax on Diesel at the wholesale level
• Raising Virginia’s sales and use tax from 5 percent to 5.3 percent
• Raising the motor vehicle sales tax from 3 percent to 4.3 percent over five years
• A new $100 annual tax for hybrid, electric, and alternative fuel vehicles (except for those powered by natural gas).

The plan is expected to raise about $880 million a year by 2018 (or $3.5 billion over five years) much of it earmarked for transportation.

There are also “Regional Congestion Relief “ plans for the Northern Virginia and Hampton Roads areas, which includes the following:
In Northern Virginia, (Planning District 8 to be exact), additional transportation revenue will be created by implementing:

• An increase in the regional sales tax of 0.7%, for a total of 6%
• An increase of 3% in the Regional Transient Occupancy tax (Hotel/Motel Tax)
• An increase to $0.35 per $100 in the regional grantor’s tax from the current $0.10 per $100

In Hampton Roads (click here to see areas included), additional transportation revenue will be created by implementing:

• An increase in the regional sales tax of 0.7%, for a total of 6%
• An increase in the local gas tax of 2.1 cents

These additional taxes are expected to raise between $300 to $350 million annually for Northern Virginia and between $175 and $219 million per year for Hampton Roads by 2018.

Source: Virginia Association of Realtors