Va. Considers Gas Tax With Refunds for Receipts

By Rosalind S. Helderman
Washington Post Staff Writer
Friday, February 17, 2006

RICHMOND -- State senators in Virginia have come up with an unusual new tax increase. People who don't like it don't have to pay it.

But here's the catch: They must be especially well organized.

The Senate, which hopes to raise about a billion dollars a year to spend on transportation, is seeking a 5 percent increase in the wholesale gas tax to help raise the revenue.

Even though the tax is on wholesalers, it could well be passed along to motorists as they pump their gas.

So under a bill that the Senate Finance Committee passed this week, they could get some money back. That is, they could get it back if they saved all those flimsy little gas purchase receipts littering their car floors and spilling from their glove compartments and sent them in to the state Department of Motor Vehicles.

Twice a year, motorists could ship off a bundle of receipts and, weeks later, receive a check in the mail representing a rebate of the new gasoline tax. Based on today's gas price, the refund would amount to about 8 cents a gallon.

"No one would have to pay this tax if they didn't want to," said Sen. Kenneth W. Stolle (R-Virginia Beach), whom colleagues credit with coming up with the idea.

The thought of asking the DMV to manage a program that could involve compiling hundreds of thousands of pieces of paper painstakingly assembled by thousands of drivers had some delegates rolling their eyes.

"That is one of the most bizarre proposals I've seen down here in years," said House Appropriations Chairman Vincent F. Callahan Jr. (R-Fairfax), whose committee will have to review the program.

But senators said the rebate would soften the blow of the tax on average drivers, and they hope to raise about $500 million a year for the state's transportation network. Those who use cars for business, including truckers, would be excluded from the rebate program. But all other drivers, including out-of-staters who buy gas in Virginia, would qualify.

Think only the most zealous of bookkeepers would bother to save and send their scraps of receipts? That, senators acknowledge, is part of the point. After all, every dollar returned to residents would be one dollar less sent to a clogged transportation network they say has reached crisis levels.

"Me? I don't keep my receipts. I wouldn't get this," said Sen. Martin E. Williams (R-Newport News), chairman of the Senate Transportation Committee. "But my wife? She'll get it back. She's a diligent record keeper."

Gov. Timothy M. Kaine (D) said he doesn't save his gas receipts, either -- but he might start if the proposal survives the legislative process. The Senate's Finance Committee unanimously endorsed the transportation package Tuesday, and it will go before the entire chamber for a vote Friday. Kaine said he could accept the idea as part of a long-term package of transportation financing options.

"Sure. I could see being comfortable with it," he said. "There would have to be a lot of discussion about the details. If that idea survives the discussions, we'll implement it."

Senators acknowledge the idea in Senate Bill 708 has some fine points yet to be worked out.

For instance: Though they put forward figures suggesting that half of the money raised from the new gas tax could end up back in the hands of consumers, senators said they're not really sure how many people might take part.

They don't know whether DMV employees, charged with hand-sifting the receipts one by one, would have good ways to spot fakes.

And they have no idea how many new clerks would be needed to run the program. A DMV spokeswoman said the agency is trying to come up with a possible price tag.

"If you tried very hard to design something more cumbersome, you'd be hard-pressed to do it," said Del. Leo C. Wardrup Jr. (R-Virginia Beach). "In a computer age, we have better things to do than to handle little pieces of paper."

Delegates have put forward their own, much smaller plan for roads and transit that would not raise taxes. But senators said the state's road and transit system needs a major infusion of money. Their rebate plan would be an innovative way to lessen the pain of new taxes, they argued.

"We were trying to think of something creative, that perhaps people hadn't seen before," Williams said.

Staff writers Chris L. Jenkins and Michael D. Shear contributed to this report.