Virginia to begin collecting additional fuel tax along I-81 corridor

June 25, 2019

Keith Goble

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An additional tax will start being collected next week on truckers and others traveling along Virginia’s busiest highway, Interstate 81.

Approved by the Virginia Legislature and Gov. Ralph Northam earlier this year, SB1716/HB2718 will raise the sales tax rates collected on fuel purchases along the Interstate 81 corridor.

The current sales tax rate collected on diesel is 20.3 cents and the gas rate is 16.2 cents.

In effect July 1, the new law will result in a 2.1% increase in the regional motor fuel taxes along the corridor and surrounding counties. The change will equate to an additional 7.7 cents per gallon collected on diesel purchases and an additional 7.6 cents collected on gas purchases.

As a result, the sales tax rate on diesel will rise to 28 cents and the gas rate will increase to 23.8 cents. The changes are estimated to raise $55 million in the first year.

Revenue from the tax increases will help fund an estimated $2 billion in improvements along the 325-mile corridor that stretches from Bristol to Winchester. Improvements will include truck lanes, longer ramps, rest areas and other traffic flow adjustments.

According to the Virginia Department of Transportation, 40% of the state’s truck traffic travels along I-81. The figure amounts to 11.7 million trucks annually.

Other revenue sources

Included in the new law and also taking effect on July 1 is an increase in road tax collected on large trucks. The tax increase is estimated to raise $23.8 million in the first year.

Statewide truck registration fees will be raised later this year. The increases are estimated to raise $77 million over the next year.

A statewide diesel tax increase of 6.8 cents will take effect in July 2021.

Revenue from the tax and fee increases will be distributed among multiple interstates based on truck miles traveled.

Once fully implemented, an estimated $152.1 million in revenue will be applied for I-81. I-95 will receive $39.5 million, while I-64 will get $27.8 million. Another $20.1 million will go to the Northern Virginia Transportation Authority. Finally, $42.9 million will be reserved for other interstates as prioritized by the Commonwealth Transportation Board.

Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.

Synchrony Financial