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Several W.Va. tax changes to go into effect

By Jared Hunt

Charleston Daily Mail

CHARLESTON, W.Va. — West Virginia’s gas tax will go up a penny on Wednesday while taxes on state businesses will go down, part of several changes set to go into effect at the beginning of the new year.

Beginning Jan. 1, drivers will begin paying 54.1 cents in taxes for each gallon of gas they buy in the state, up from the 53.1 cents.

The change is a result of the annual recalculation of the average wholesale gas price by the state Tax Department — a change that affects one of the components of the overall tax paid by consumers.

The state and federal governments charge per-gallon taxes on fuel. The taxes generate revenue for state and federal highway funds and are the chief source of revenue for most road construction and maintenance projects.

The federal government charges a flat tax of 18.4 cents per gallon on unleaded gas — a rate that has not changed since 1993. Diesel is taxed at 24.4 cents per gallon.

West Virginia currently charges an additional 34.7 cents in taxes for each gallon sold at the pump. That applies to both diesel and unleaded gasoline blends.

However, that tax is actually made up of two components.

The first is a flat 20.5-cent tax on each gallon sold. The second component is a variable tax of 5 percent based on the average wholesale price of motor fuel.

State law requires the tax commissioner to recalculate the average wholesale price of fuel in the state each year.

In November, tax officials determined the new state average wholesale price was $3.042 a gallon, up 21.1 cents from the 2013 rate of $2.831 a gallon.

Deputy Tax Commissioner Kristin Mounts said the recalculation would translate to a one-cent increase of the variable tax from its current 14.2 cents a gallon to 15.2 cents a gallon beginning Jan. 1.

Jan Vineyard, president of the West Virginia Oil Marketers and Grocers Association, said her organization had worked to inform local retailers of the tax change.

Vineyard said nobody liked the idea of paying more for gas, but said the variable tax rate helps to keep state road funding in line with inflation.

“I’d like for the gas tax to be down, but we also need money for highways,” she said. “This is the most reasonable manner to go in…”

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