LAST CHANGE TO STOP TAX HIKE

  Dear Fellow Virginians,

IMMEDIATELY URGE YOUR STATE DELEGATE AND SENATOR TO VOTE “NO” ON HB 2313! After reading the 109-page conference report, it is even worse than I expected. NEW REGIONAL TRANSPORTATION FUNDING AUTHORITIES in Northern Virginia and Hampton Roads will fund and decide projects! Haven’t we had enough problems with the Metropolitan Washington Airports Authority? PLUS, there are even more tax hikes than first reported!

The 109-page Conference Committee Report was not made available to legislators until the evening of February 21. As of this morning, it is not posted online for the public to read. Quoting Delegate Ben Cline, it is a “Frankenstein Monster” of a bill.

HB 2313 raises the state sales tax, regional sales tax, vehicle and tangible personal property taxes, vending machine tax, heavy equipment tax, recordation tax on commercial, industrial and residential real property sales, hotel tax, hybrid vehicle tax, and diesel fuel tax. Not all of the money raised will go to roads. Much will go to Metro. Some will go to the General Fund. Shifting the gas tax will not guaranty lower gas prices.

PLEASE DON’T WASTE A MINUTE! CALL YOUR DELEGATE AND SENATOR NOW. The vote on HB 2313 will be today, despite the fact that few will have been able to read the Conference Report.

FOR THOSE WHO WANT MORE DETAILS: In addition to the tax increases I explained yesterday there are additional taxes I was not aware of until I read the Conference Report:

  • The personal property tax will increase from 3.5% to 4.3%.
  • The tax on vending machine sales rises from 4.5% to 6% in NOVA and Hampton Roads and 5.3% elsewhere in the state.
  • Heavy equipment used for contracts on road construction, railroads, docks, etc. will be taxed at 4.3%, up from 3.5%
  • Except for the increased tax on motor vehicles, other tangible personal property will be taxed at 5%.
  • In Northern Virginia, commercial, industrial and residential land and building sales will have an additional tax of 25 cents per $100 of value. (A Conferee had previously told me the tax was 40 cents per $100)
  • In Northern Virginia there will be a 3 % hotel tax (Legislators were previously informed this amount was 2%)
  • While the bill shifts the 17.5 cent flat tax per gallon of gas to a 3.5% sales tax on the wholesale price of gasoline, it is speculative to claim that motorists will pay less for gas because the sales tax will be computed on the wholesale price of gas as of February 20, 2013 and will not go below this floor.
  • The sales tax on purchasing vehicles (trucks and cars) increases from the current 3% to 4% on July 1, 2013, 4.1% on July 1, 2014; 4.2 % on July 1, 2015, and 4.3% on July 1, 2016. (Legislators were told it was a straight 4% tax. In reality, the tax increases each year through 2016.)
  • If Congress does not pass the internet sales tax collection law, the tax on wholesale gasoline beginning January 1, 2015 will increase from 3.5% to 5.1%.(regular gas) and 6% (diesel). There is no provision in the law to revert back to 3.5% should Congress pass the internet tax law after 2015.

By the way, if Congress passes the internet tax, mom and pop internet stores will be forced to comply with thousands of jurisdictions’ differing tax rates. Big online companies can easily comply but their smaller competitors could be forced out of business.

To reiterate, here are the other changes I mentioned yesterday:

  • 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 amount of general fund money diverted to fund transportation from .50 % to .675 %, raising roughly $200 million when fully phased in.
  • 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 to achieve the same end.
  • NOT FIXING WHAT IS BROKEN: In this session, the House of Delegates:
  • Rejected increased representation of Northern Virginia and Hampton Roads on the Commonwealth Transportation Board, the VDOT agency that decides which projects are funded. The current CTB favors districts drawn from the 1930’s.
  • Agreed to fund $1.4 Billion for a 55 mile toll road parallel to existing Rt. 460 (Suffolk to Prince George). VDOT claims project will create 4,000 jobs but lists no traffic counts.
  • Increased by $554 million (total of $1.3 Billion) to finish and four- lane Rt. 58 to the intersection of I-77/I-81, a road that carries only 7900 cars daily.

Declined to alter the decades old transportation funding formula for the allocation of money to VDOT construction districts. This will perpetuate the practice of funding rural rather than urban areas. Apparently, if rural law makers vote for these higher taxes, they have been assured that the funding formula will remain intact.

PLEASE, contact your Delegate and Senator today to ask them to oppose the Conference Reportfor HB 2313 here.

Thank you for your diligence!

Delegate Bob Marshall