Tax Changes to Take Effect Monday

Under Gov. Bob McDonnell’s transportation bill, taxes on a gallon of regular gas will go down about 6 cents per gallon in Virginia.

Instead of the current 17.5 cents per gallon tax, Virginia motorists will be paying about 11.7 cents per gallon in taxes on the average wholesale price of unleaded gasoline, according to the Virginia Petroleum, Convenience and Grocery Association. (The decrease may be slightly less in Northern Virginia, thanks to local taxes for transportation projects.)

That’s a whole lot less than in Maryland, where motorists will pay about 4 cents more per gallon in taxes starting Monday.

But the money you save at the pump will likely go to towards other retail items.

The sales tax rate in Northern Virginia will increase from 5 percent to 6 percent. The rest of the state’s sales tax will increase from 5 percent to 5.3 percent.

According to the Commonwealth, the rate increases will only affect general retail sales in the region and will not affect the price of food for “home consumption.”

Northern Virginia's new sales tax rate will now match Washington, D.C.'s, which also has a general sales tax rate of 6 percent. 

The motor vehicle sales tax is also set to increase from 3 percent to 4.3 percent and residents will have higher annual fees for hybrid car drivers.

McDonnell’s controversial transportation bill could raise $880 million a year for roads and mass transit.

Locally, in Fairfax City, the real estate tax will increase by 5 cents to $1.06 per $100 of the assessed value of a home.

TELL US - What do you think of the tax changes taking effect Monday? What do you think of Gov. McDonnell's transportation bill? Post in the comments below.

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