RICHMOND, VA (WTVR) — After 27 years of debate, Virginia has a comprehensive transportation reform bill signed into law.
Governor Bob McDonnell signed the bill during a ceremony on the steps of the Capitol Building.
“For the future of Virginia,” McDonnell said after he affixed his signature.
“This is the year we actually got results,” McDonnell said earlier in a speech in front of about 200 gathered government officials and guests.
The bill has received bipartisan support and has been endorsed by both gubernatorial candidates Terry McAuliffe (D) and Ken Cuccinelli (R).
“It is a historic day,” Secretary of Transportation Sean Connaughton told CBS 6 reporter Joe St. George.
“This is one of those funny bills where everyone says they hate it but at the end of the day it solves our problem,” Connaughton said.
The bill eliminates the state’s 17.5 cents gas tax but does create a new wholesale gas tax that gas stations will pay distributors. While that cost will be passed down to customers, it is expected to reduce the cost of a gallon of gas seven cents statewide.
The bill raises the state sales tax to 5.3 percent as well as increasing taxes on new car sales.
The bill also creates a new user fee for hybrid drivers. All new taxes and fees will begin to be applied on July 1 of this year. Another key component of the new law is the ability of the state to more easily collect tax on online purchases.
However, that power is awaiting congressional approval with the Marketplace Fairness Act. Presently, only companies that have a physical address in Virginia are required to have a state tax applied during checkout of online purchases.
While Virginians are supposed to pay the tax during their annual tax returns, many do not. The bill however is far from passage which is why CBS 6 asked what would happen if the Marketplace Fairness Act fails to pass Congress.
“If it doesn’t pass, the gas tax (applied at the wholesale level) will go up an additional 1.6 percent,” Connaughton said.
Connaughton did tell CBS 6 reporter Joe St. George that Central Virginia will reap the benefits of the new law with a new construction project set to be announced.