Virginia repeals the Prius tax
Last year Virginia did something interesting. Instead of taxing its gasoline at the pump in the manner most are familiar with, it instead decided to tax gasoline at the wholesale level. Yeah!, We don’t have to pay the gas tax! Not quite. The 17.5 cent per gallon tax was replaced with a 3.5% wholesale gas tax which is then passed onto consumers by station owners. There were a lot of other changes too, one of which was a new tax on the registration of any hybrid, electric, or alternative fuel vehicle. It started out at $100, but before implementation, political compromises reduced that to $64.
The idea of taxes of this type that hit just green vehicles is that since the new greener cars use less fuel, they should pay more taxes to offset the reduction in gasoline tax they pay. Usually the gas taxes are called by politicians “road and bridge repair taxes.”