Will It Soon Be Cheaper To Shop In MD & DC Than NOVA?
The House/Senate conference Transportation Bill (HB 2313) raises Virginia’s sales tax rate from 5% to 5.3%, EXCEPT, as Del. Bob Marshall points out, it is increased to 6% in Northern Virginia and Hampton Roads.
The bill includes the following tax increases:
- Replace the current 17.5 cents per gallon flat tax on gasoline with a 3.5 % wholesale sales tax paid by distributors, which will be passed on to consumers, and a 6 % wholesale sales tax on diesel fuel.
- Increase the 5% retail sales and use tax paid statewide on most purchases to 6% in Northern Virginia and Hampton Roads and 5.3 % in the rest of the state.
- Apply a $100 annual fee on alternative fuel vehicles, including hybrids.
- Increase the current 3% sales tax paid on the purchase of motor vehicles to 4%.
- Increase the amount of general fund money diverted to fund transportation from .50 % to .675 %, raising roughly $200 million when fully phased in.
- The sales tax in Northern Virginia and Hampton Roads will be 6% instead of the 5.3% in the rest of the state.
- In Northern Virginia there will be an increase of 40 cents per hundred dollars on the sale of a house. That’s an extra $1600 on the sale of a $400,000 home.
- Also in Northern Virginia there will be a 2 % occupancy tax for hotels.
- If Congress passes the Marketplace Equity Act (which requires on line businesses to collect sales taxes) the proceeds will be distributed as follows: 55.55% for schools; 22.2% for local governments with no restrictions; and 22.2% for roads and transit. If Congress does not pass the Internet sales tax collections act, an additional 1.6 % tax would be added to the wholesale gas tax.
Not all of the sales tax increase (the extra .3% statewide or extra 1% in Northern Virginia & Hampton Roads) will go to transportation. Part will go to schools and other general fund programs. There is no prohibition from using more of the tax increase for things other than transportation, nor anything to stop reinstating the gas tax on top of all the other taxes in future!
John Taylor of Tertium Quids adds that the conference bill “also allows ALL local governments the ability to impose a 1% sales tax without a referendum or sunset date!”
If this is all accurate (the conference bill is not yet available on the Legislative Information System website, so we can not verify all this), it may soon be cheaper to shop in Maryland and DC, both of which have a 6% sales tax, than it will be in Northern Virginia if localities here place their own 1% tax on top of the 6% state sales tax. At that point, Tysons Corner could kiss many of those shoppers coming from DC and Maryland goodbye thereby decreasing revenue from the sales tax.
Just brilliant!
11 Responses to “Will It Soon Be Cheaper To Shop In MD & DC Than NOVA?”
So…we’re going to whack the most dynamic regions in the state with a real estate tax (as they recover from the housing slump), a higher sales tax, and a hotel tax that will drive up the cost of business travel. All while encouraging other regions to do the same thing. How is the internet sales tax they covet supposed to handle this crazy quilt?
What.
A.
Mess.
Where the heck did this real estate transfer tax come from on home owners? Thats absurd and its getting worse by the minute, everytime I read a new article, I hear about a new tax.
These out-of-state truckers barrelling down 81 tearing up our roads are getting a free-ride while we get pillaged here in Virginia.
I thought Republicans controlled the General Assembly and Governor’s Mansion.
With friends like these who needs enemies?
That’s exactly what I’ve been saying and what I wrote to my delegate, Joe May, last night.
Why do we work so hard to send republicans to Richmond? What difference does it make? Democrats raise taxes, republicans raise taxes.
It sure feels like the details are being withheld to quell dissent before it comes up for a vote.
This sounds like a pretty raw deal.
Don’t you know? We’ve got to pass the bill in order to find out what is in it…
I’m not all that happy with the tax increase, but if it will really go toward transportation, I can live with it. We just got home from a trip to Florida. The roads in Virginia were the pits. I used to think the road money went to Richmond and points south. Boy, was I wrong. For the life of me, I can not figure out where they are spending it.
They’re all starting to understand the meaing of arithmetic in Richmond!!! No such thing as a free lunch or a free ride on our roads…….hohohoho
Ken, you have syrup for brains, and I can do without your inept observations on the matter. K? Thanks.
Sorry to offend you Monk…………..but 2 + 2 never equals 5…………And there is no such thing as a free lunch or a free ride on our roads…….also, McDonnell used $729 million of Obama’s stimulus to pay for many of our road problems………..
Comments are closed.