VA gas prices to drop; other taxes increase, July 1 - NBC12.com - Richmond, VA News

VA gas prices to drop; other taxes increase, July 1

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RICHMOND, VA (WWBT) -

The countdown begins to potentially lower gas prices in Virginia. Come July 1, the Governor's transportation bill will take effect.

A change in Virginia's gas tax formula will drop fuel prices six cents a gallon. Gas tax will now be charged wholesale. That could make Virginia one of the five cheapest states to fill up in, according to AAA.

Gas stations will likely pass on those savings to consumers, according to Mike O'Connor, president of the Virginia Petroleum, Convenience and Grocery Association.

"We're the most transparent industry in Virginia, the only one that puts the prices on the street in three-foot-high letters for everyone to look at. So, if folks aren't happy with the price after that change takes place…they can go somewhere else," said O'Connor. 

However, there are other taxes that will be going up, to fund the transportation repairs.

Diesel prices are slated to rise, according to O'Connor. Luckily there's a rebate for drivers who run clean diesel vehicles.

The state sales tax will jump from five percent to 5.3 percent.

Buying a car will cost Virginians an extra one percent, as well. Hybrid and alternative fuel vehicles will also carry an extra tax fee.

Bill Colgate, owner of Brown's Volkswagen and Jaguar dealerships, says the average American buyer spends about $25,000 on a new car. That means the new title tax equals about an extra $250. Many Virginia dealerships are urging customers to buy before July 1st.

"It would save you at least $250, and as much as $1,000, depending on the price range you're buying," said Colgate.

Some dealerships are offering incentives to offset the added cost. Colgate is offering $250 gift cards to Martin's Food Markets.

"So, at least we're keeping the money local," added Colgate.

It may take a few days after July 1 to notice a dip in gas prices, since gas stations have to run through all of the fuel at the old prices, before they start selling fuel bought at the cheaper rate.

The Hampton Roads and Northern Virginia areas won't see as much of a break in gas prices. Those areas are paying a bit more in tax because they are more congested, and considered in more need of roadwork.

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