New taxes on gas, cigarettes, skill games start Wednesday

Virginia News

RICHMOND, Va. (WRIC) – Virginians will start seeing higher prices on some products when new taxes passed by the General Assembly take effect on July 1.

Gasoline

Over the next two years, the gas tax will double in some areas of Virginia from about 16 cents per gallon to nearly 34 cents per gallon.

On Wednesday, the hike will begin with an initial 5 cent per gallon increase statewide. The second 5 cent increase won’t come until July 1, 2021.

In addition, a regional gas tax of 7.6 cents will be expanded to areas of the state that haven’t had it to date. The regional tax was already in place in Hampton Roads, Northern Virginia and the Interstate 81 corridor.

The additional funds will be committed to improving transportation infrastructure and expanding passenger rail service in the commonwealth.

Tobacco Products

Virginia’s tax rate on cigarettes and other tobacco products will double to help fund prevention and cessation programs.

The rate has been 30 cents per pack, the second-lowest in the country. The new rate of 60 cents per pack still falls about a dollar short of the national average.

The state is also imposing a new tax rate on liquid nicotine products of 6.6 cents per milliliter of oil.

Skill Games

For the first time, skill game distributors in Virginia will have to pay a monthly tax of $1,200 per machine.

This comes after the General Assembly banned the games over concerns that they would hurt the emerging casino industry and the Virginia Lottery. Instead of banning them immediately, lawmakers decided to tax them temporarily. More than 80 percent of the proceeds between now and July 1, 2021 will go to a COVID-19 Relief Fund.

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