Diesel Car Owners Won't Like Virginia's Road Tax Plan Either

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Last month, Virginia governor Bob McDonnell proposed dropping the state's tax on gasoline, the revenue from which has become stagnant in recent years.

To make up for axing the state's gas tax, revenue would have to come from elsewhere--extra sales tax, new car registration fees, and a new $100 annual fee for all plug-in and hybrid cars.

As well as vexing owners of hybrid and plug-in vehicles, it's proving unpopular with another group, too--diesel car and truck owners.

Subsequently revised from a complete abolition of gas tax, the new scheme would charge a 3.5 percent wholesale tax on gasoline, but a higher 6 percent tax on diesel.

This works out lower than the current 17.5 cents per gallon tax on gasoline, but a little higher per gallon of diesel--and it penalizes not just truckers, but customers of passenger vehicles and light-duty trucks who've deliberately picked more efficient vehicles.

According to the Diesel Technology Forum, 250,000 drivers would be affected by 2020.

The Forum's Executive Director, Allen Schaeffer, has written a letter to the Virginia House of Delegates to raise the issue--which he says will create an unfair and substantial disparity between gasoline and diesel fuel.

The legislation "directly penalizes Virginians who drive fuel-efficient clean diesel passenger vehicles and is a disincentive to investing in clean diesel cars in the future".

That's something we noted ourselves in our original report, and it's no surprise that others have realized it too.

Schaeffer goes on, "It seems illogical to impose a higher tax at the pump on an increasingly popular technology that is 30 percent more energy efficient and has lower emissions than gasoline, but that is exactly where we’re headed with this plan.

“Diesel fuel is no longer a fuel used only by commercial trucks yet this plan effectively treats it as one and the same, and that price at the pump disparity will discourage consumers from investing in these cleaner more fuel efficient vehicles."

He says the transportation funding package tries to justify diesel's higher rate by the extra damage done to roads by heavy diesel-powered commercial trucks--but 81,000 car and light-duty truck owners will also be affected, and an estimated 250,000 by 2020, if diesel sales continue increasing.

Unintended consequences: Extra oil use, pollution

As well as an unfair disparity between gasoline and diesel prices, Schaeffer cites diesel's efficiency benefits as a reason the plans should be scrapped--20 to 40 percent better fuel efficiency than the equivalent gasoline vehicle, and 10-20 percent lower CO2 emissions.

Such a disparity between gasoline and diesel could tempt buyers back to less efficient gasoline vehicles--wasting millions of extra barrels of oil per year.

In his letter to the House, Schaeffer concludes, "We are concerned that the fuel tax disparity proposed in the final transportation funding package could have the unintended consequence of discouraging the purchase of fuel-efficient clean diesel vehicles that are already reducing fuel consumption and improving air quality throughout Virginia."

Would a greater discrepancy between diesel and gasoline costs tempt you away from diesel cars?

Let us know your thoughts using the comments section below.


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Comments (19)
  1. Diesel is used in a lot of commercial vehicles so all the goods just got more expensive since the transportation cost just went up for everyone in VA...

    Maybe people will "fill up" before they cross into VA... MD should cut their gas tax at the same time...

  2. ...and the goods include gasoline since it is also transported by diesel. The tax "goes down" on gasoline, but the price of gasoline goes up anyway because the price of diesel went up in conjunction. A nice "sleight of hand" by the government of Virginia. The drivers of standard cars celebrate because they think they are getting a tax break by the government of Virginia. Election year for the governor of VA must be coming up.

  3. Exactly! I can't believe anyone in VA would fall for it.

    If they want to help people, reduce tax on diesel and reduce sales tax, the gasoline will be cheaper...

  4. Agree in part except Governors only get one term in Virginia so it wouldn't benefit Bob at all.

  5. virginia gas taxes are some of the lowest in the country. people fill up in virginia before they go back home to D.C. or Maryland. It should also be noted that when the price of gasoline or diesel goes up so do the taxes since it soon will be taxed as a percent and not a flat fee per gallon.

  6. Does the new Virginia $100 annual registration fee for all plug-in and hybrid cars apply to ethanol-gas hybrid vehicles? What about propane, natural gas, bio-diesel, fusion or steam powered vehicles… do they pay a Road Tax too?

    The type of fuel used has little impact on roads compared to weight of vehicle, or type of tires. Why not a universal $100 annual registration fee that applies to ALL vehicles?

  7. The problem is that heavy vehicles do more damage to roads than lighter ones. larger vehicles use more fuel and thus pay more taxes. The flat fee doesn't take in to account low milage or high milage drivers either. People that use the roads more pay more and people that drive less pay less. Being taxed for the exact number of miles you drive is the only far way.

  8. This sounds good in theory. The problem is keeping an accurate account of the miles driven. How would that be done? You know the state wouldn't trust you to do it honestly, so either some kind of transmitter would have to be added to each car or a driver would have to drive their cars through a state vehicle department facility to have it recorded every year. Either way, it's expensive and time consuming for the state and will end up being paid for by the consumer.

  9. @Kit: It may surprise you to know that many states require an annual or semi-annual car inspection. Most are to confirm that the car remains within emission limits, but more progressive states also check for working lights, wipers, proper tire tread depth, brake pad thickness, and so forth (New York is one).

    Hardly that much of an inconvenience, and most citizens like it for the added assurance that at least once a year, some third party is looking to make sure that cars on the road pass minimal safety standards.

  10. Some of those "inspection" program are NOTHING more than a way for the auto service shops to "milk" money out of the consumers.

    $25 for a wiper replacement. $40 for a tail light bulb replacement...etc. If you don't do it there, then you get a fail and then pay for additonal re-inspection... Another "government good intent" that turns into Money making scams...

  11. Easy. Virginia has an yearly inspection program the inspector can report the milage as part of the inspection process or when the "tags" are renewed just add vehicle milage to the application form. If your report the "wrong" number they catchup to you when the car is sold.I don't think it is necessary to over tech this problem by forcing people to buy/install a GPS tracking/spying device.

  12. Yes, Illinois has a vehicle inspection also, but it is only every 2 years and cars built before 1995 are exempt. So, it would mean coming in more often or at least going to the closest state vehicle office (where we take our drivers tests or renew our license). It all adds more time and someone has to pay for the people's extra time to do this. That means we will have to spend more of our time, pay more for someone to check the odometer and probably pay more for the road tax. After all, the state isn't going to make changes like this unless they ultimately end up with more revenue.

  13. Although this tax is insidious, I would pay any price to be able to drive a diesel car, even if it were the most expensive option.

  14. It would be a bit easier to manage if they simply raised the tax on all motor fuels by a set percentage and put a hard floor under it so the base amount of tax could only fall so low in the event of fuel prices falling. Then the people who choose fuel efficient transportation are rewarded and the gas {and diesel} guzzlers get their reward as well. As for increased diesel fuel prices driving the price of everything else we consume upwards, this is how it has always been.

  15. I wonder if this disparate treatment of diesel is constitutional. Middle America states have in the past passed laws to prevent semi-trucks from using the state as pass-throughs and those laws were struck down under federal law as having an illegally impacting interstate commerce. If states are allowed to tax diesel at a higher rate as proposed, what's to stop one of these states from increasing the tax to such a rate as to inhibit interstate shipping in the same ways intended by those struck-down laws?

  16. @Jay: Many, many states have different tax rates on diesel and gasoline. Absent some extreme so that no trucker could afford to fill up in the state, seems like states have wide latitude as to the taxes and fees they're allowed to impose.

  17. I find it amazing that someone could be as ignorant as Bob McDonnell. This has got to be the most foolish thing I have read all year. He should just increase the gas tax.

  18. Agreeded, Agreeded and YES unfornately the Virginia house and Senate are in on it also. If this was an election year I would say they were panning for votes.

  19. I wonder what percentage of a tax decrease will actually be passed on to consumers? It seems like the airline tax of a year or two ago should serve as an example. The Feds were too deeply engaged in petty partisan politics and didn't extend taxing authority, but when the tax expired, airlines didn't reduce rates (I.e., they kept the money).

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