Virginia Gas Tax Holiday Again Proposed By Youngkin Amid Record Highs

VIRGINIA — Gov. Glenn Youngkin hasn't given up on a gas tax holiday in Virginia, including the proposal in a budget amendment Wednesday night.

Youngkin presented proposed amendments to the budget passed by the Virginia General Assembly in early June. While the approved budget includes some of the tax relief Youngkin supported, it did not include a gas tax holiday.

Youngkin's budget amendment calls for a three-month suspension of Virginia's 26.2 cents per gallon tax on regular gasoline and 27 cents per gallon on diesel. The proposed tax suspension would happen July 1, 2022 to September 30, 2022.

In addition to the gas tax holiday, the budget amendment calls for annual gas tax increases not to exceed 2 percent.

The governor pointed to the rising gas prices in the budget amendment proposal.

"With five-dollar gas prices and plenty of money in the system, I’m continuing the effort to lower gas prices for hardworking Virginians and my hope is, this time, that Democrats will join us to give Virginians a break this summer," said Youngkin in a statement.

In Northern Virginia, the average price is $5.03, 3 cents above the national average. Most Northern Virginia localities have an average price at $5 or above.

The General Assembly's budget deal was negotiated to receive bipartisan support, as Republicans have the House majority and Democrats have the Senate majority. The Senate had voted against the gas tax holiday in the spring, with Democrats concerned about the revenue loss to the Commonwealth Transportation Fund.

A three-month gas tax holiday would cost an estimated $437 million in revenues, according to the Virginia Mercury. Youngkin has argued the transportation fund has a surplus that can allow for suspension of the tax.

The Virginia General Assembly will consider Youngkin's budget amendments as soon as Friday when it reconvenes. The governor's proposed budget amendments for the commonwealth's two-year budget can be seen here.

Other tax items included in the General Assembly's approved budget were an increase in the standard deduction from $4,500 to $9,000 for single filers and $8,000 to $16,000 for joint filers, repealing the 1.5 percent state share of the grocery tax but not the localities' 1 percent share, tax rebates of $250 for single filers and $500 for joint filers, and a phase-in of exempting $40,000 in veteran retirement pay.

As Youngkin tries again for a gas tax holiday, the average gas price in Virginia reached a new high of $4.86 Tuesday, according to AAA data. As of Thursday, the price is down 1 cent.