Autoblog

Virginia's Gov. McDonnell proposes elimination of gasoline tax

Jonathon Ramsey — Wed, 16 Jan 2013 09:31:00 EST

Filed under: Hybrid, Government/Legal, Earnings/Financials

The assessment of a gas tax and the role it plays in a state's transportation and overall budgets has been a topic of discussion for a while, and Virginia state governor Bob McDonnell is the latest to offer up another way to secure more revenue from the state's residents to pay for their roads and public transportation. McDonnell's proposal would eliminate Virginia's 17.5-percent gas tax entirely, with funds for infrastructure projects coming from an increase in the sales tax from five percent to 5.8 percent and an annual $100 fee assessed on drivers of alternative-fuel and hybrid vehicles. He would leave in place the tax on diesel fuel, and naturally, the federal gas tax would remain untouched.

Much of the response to the proposal has been, "Um... what?" - as well as "bad policy," "a no-brainer for dumb idea of the week" and "'bold' and 'unprecendented." McDonnell is right to suggest that a possible response to "any innovative and comprehensive transportation plan" is dislike. Still, we think there are holes in parts of his plan. Virginia's gas tax is already one of the lowest in the nation, doesn't rise with inflation and hasn't been increased since 1986. According to McDonnell, the revenue from it has 45 percent less purchasing power now than it did 27 years ago, so "It's a tax that's losing its value every year."

Raising it, or getting it adjusted to inflation, is for some reason not on the menu. The 0.8-percent bump in the sales tax would bring in $600 million more per year than the current gas tax does, yet to eliminate the gas tax entirely seems a bit much; it might not pay as much as it used to, but its still a pretty fair and direct usage fee, so why not take advantage of whatever it can provide?

On top of that, to jettison the gas tax but then tax owners of alternative-fuel and hybrid vehicles because "these vehicles generate little federal gas tax revenue and therefore need to contribute their share to fund the roads they use" seems disingenuous. That means the SUV buyer pays for roads at the cash register, while the Honda Insight buyer has to chip in at the register and the Department of Motor Vehicles.

And on top of all that, the move to a sales-tax funded transportation infrastructure unlinks the "fair share" argument from "the roads they use." People who buy more goods will pay more for their roads, not necessarily people who use the roads more. It's only a proposal at the moment so it has a way to go before becoming law, our guess is that it will have a long fight as well.

Virginia's Gov. McDonnell proposes elimination of gasoline tax originally appeared on Autoblog on Wed, 16 Jan 2013 09:31:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Fed extends new-auto tax break to states without auto sales tax

John Neff — Fri, 12 Jun 2009 11:21:00 EST

Filed under: Car Buying, Government/Legal

While we wait for the Cash-for-Clunkers bill to come out on the other side of Congress, there's already incentives available from the government that you can take advantage of when purchasing a new car. The main one is deducting the fees and taxes paid on a new car in next year's tax returns. Previously this tax deduction was available only in states that used a sales tax, but the U.S. Treasury announced this week that it would be extended to states without a sales tax like Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon.

Since buyers in those states won't pay sales tax, they'll be able to deduct "other fees or taxes imposed by the state or local government that are based on the vehicle's sales price or as a per unit fee." That amount may not equal what buyers in other states can deduct, but at least it's something and they already don't have to pay sales tax on a new car.

To qualify, the vehicle must be purchased after Feb. 16, 2009 and before Jan. 1, 2010. The deduction also only applies to taxes and fees paid on up to $49,500 of the vehicle's purchase price, but it does apply to cars, trucks, motorhomes and motorcycles.

[Source: U.S. Treasury | Image: ROBYN BECK/AFP/Getty Images]

Continue reading Fed extends new-auto tax break to states without auto sales tax

Fed extends new-auto tax break to states without auto sales tax originally appeared on Autoblog on Fri, 12 Jun 2009 11:21:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Hybrid tax rebates doubled in Ontario, Canada

Joel Arellano — Sun, 26 Mar 2006 20:04:00 EST

Filed under: Car Buying, Hybrid, Government/Legal, Green, Marketing/Advertising

The province of Ontario, Canada, has enacted a new policy affording double tax-rebates for hybrid vehicles, effective last Friday. Previously, the rebate was up to $1,000... now it is $2,000 maximum.

The main reason for the increase is the province's desire to maintain its leadership role in the automotive industry in Canada. Hybrids are considered 'leading-edge' technology, and Ontario hopes the new rebate will encourage automakers to continue developing the technology.

A representative of Ford Motor Co. acknowledged the intent: "British Columbia and Prince Edward Island also support the purchase of this leading-edge technology. Ford of Canada is encouraging other provinces and the federal government to follow suit, so that all Canadians will have similar hybrid consumer incentives."

[Source: CANOE]

Hybrid tax rebates doubled in Ontario, Canada originally appeared on Autoblog on Sun, 26 Mar 2006 20:04:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Missouri proposes tax break for cars and trucks built in-state

Joel Arellano — Sun, 05 Mar 2006 17:00:00 EST

Filed under: Car Buying

Missouri's state House passed legislation last week that waived the state's sales tax on vehicles built within its borders. Supporters hope the tax break will spurn residents to purchase more locally-assembled vehicles, ultimately encouraging automakers to build even more local facilities. Daimler-Chrysler's Chrysler Group, Ford Motor Company and General Motors already have plants in the "Show Me" state.

"This waiver would help car manufacturers and auto workers," said Rep. Michael Spreng. "Job retention and job creation is what this is all about." Ford's St. Louis Assembly plant, which Ford plans to close, is in Spreng's district.

Analysis of this first-of-its-kind legislation and its impact can be found at the link. While the legislation has its proponents, it remains unclear whether the move will hold any sway with manufacturers, or whether it will simply serve consumers. As Rep. Ed Robb (who opposed the waiver) said, "This is not going to cause any motor vehicle manufacturer to stay in Missouri... It just doesn't have a possibility of making a difference."

[Source: Detroit News]

Missouri proposes tax break for cars and trucks built in-state originally appeared on Autoblog on Sun, 05 Mar 2006 17:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments