Virginia Highway Use Fee

Virginia Highway Use Fee

The need for fuel-efficient and pollution-resistant vehicles is on the rise worldwide. These vehicles also consume less fuel at gas stations. In Virginia, a state that values fairness, if a vehicle is considered to be fuel efficient, then its owners will be charged an additional highway use fee when they renew their registration. This rule, established by the General Assembly in Virginia about four years ago, ensures that all vehicle owners contribute their fair share to road maintenance.

Understanding the Virginia Highway Use Fee

The roads in Virginia are maintained with the help of the taxes at the drivers pay at the pump. This fee will help in keeping up the shortfall that results from more and more drivers switching to electric vehicles and other fuel-efficient vehicles. The fee was established by the Virginia General Assembly in the year 2020 to make up for less gas tax money that is collected at the gas pumps, with the ultimate aim to explain that fuel-efficient vehicles get more miles to the gallon and drivers will not fill up as often as quickly.

Recent advancements in fuel economy, along with the adoption of hybrid and eclectic vehicles, have depleted the purchasing power of the gas tax. This highway use fee has recovered $60 million in unpaid gas tax revenue that otherwise would not have been collected to offset the wear and tear of vehicles that are imposed on the highway system.

When the miles per gallon of the highway vehicle is less than 25 miles per gallon, according to the combined fuel economy of the manufacturer, then the vehicle owner does not have to pay the highway use fee. These highway use fees are aimed at recovering the amount that is not being captured by the gas tax. For those who have an electric vehicle, there is no need to go to the pump, and the annual fee for these drivers would be around $123.98 per year.

Who Pays HUF, and Who is Exempt From the Tax

The highway use fee or the HUF will make up for the fuel taxes that drive with electric vehicles that are fuel efficient and are less to spend on, but they are not using as much fuel as required. This fee is expected to support the Commonwealth Transportation fund, which helps to maintain the roads, transit, airports, and highways.

The highway use fee is paid by the owner of a fuel-efficient vehicle with a combined fuel economy of 25 miles per gallon or greater. These vehicles are made in less than a year, and the average combined MPG rating for all the vehicles produced in the year is 25 MPG or greater. Even low-speed vehicles may have to pay an annual fee of $25 HUF. The following vehicles are exempt from the highway use fee.

  • Vehicles that have a combined MPG rating of less than 25 MPG
  • Motorcycles and autocycles are not exempt from paying the highway use fee.
  • Mopeds are exempt
  • Vehicles that have a gross weight of greater than 10,000 pounds are exempt from paying the highway use fee.
  • Vehicles owned by a governmental entity are exempt as well.
  • The vehicles registered under the International Registration Plan are exempt from the highway use fee.

Calculation of HUF

The highway use fee calculations of the vehicle are based on the fuel efficiency of the vehicle, which is the combined miles per gallon rating. The fuel tax rate at the time of registration of the vehicle will also be considered for calculating HUF. The average number of miles that are driven by all the Virginians will be used for calculating HUF.

The highway use fee will be calculated as 85% of the difference between the taxes that are paid by a vehicle with a 23.7 rating and taxes paid by the vehicle using the combined MPG rating of the manufacturer based on the average miles that are driven by all the Virginians.

HUF = ( 11,600 average miles traveled x fuels tax rate / 23.7) – (11,600 average miles traveled x fuels tax rate) / Vehicle’s MPG rating x 0.85. There are two options to pay the HUF. Vehicles can pay the taxes in combination with their registration fee when they renew the vehicle.

Importance of Road Maintenance

Maintaining local roads is challenging as they are prone to cracks, potholes, general wear and tear, etc. Road maintenance is a critical issue that affects the convenience of daily commuting. Road maintenance agreements are legal papers that explain the various parties’ responsibilities for maintaining a certain road or network of roads. Property owners, homeowners’ groups, and municipal governments are often the parties who enter into these agreements. Goal agreements ensure that roads are appropriately maintained and in good condition, benefiting all users.

A recent research conducted by the Virginia Department of Transportation indicated that neighborhoods with road maintenance agreements had much fewer road maintenance concerns than those without such agreements. The study also discovered that property values in these communities were greater, showing that well-maintained roadways improve the general desirability of the area. Virginia’s road maintenance agreements are overseen by state and local laws. These agreements must meet specified legal standards and be recorded with the relevant county or local authorities. It is critical that property owners and homeowners associations understand their legal obligations and liabilities under these agreements. Road maintenance agreements are essential for keeping our roads in good condition and safe for all users. Property owners and homeowner associations can help improve local infrastructure by understanding the legal framework and their responsibilities under these agreements.       

Revenue Impact of Highway Use Fee

Depending on the weight and the classification of the truck, the highway usage fees will be somewhere between 2.5 and 17.5 cents per mile in Virginia. Highway user charges will constitute the largest part of the revenue that the state governments raise. Which is around 56% with the motor fuel taxes that account for 46% of the state revenue from the user charges.

Compliance & Reporting

The highway use fee applies to all fuel-efficient vehicles with a combined fuel economy of 25 miles per gallon or higher, including electric vehicles and vehicles with alternate fuel options. For electric vehicles, that fixed fee is calculated on the basis of the average fuel consumption. The highway use fee is generally collected during vehicle registration time and during the renewal of the vehicle with the virginia Department of Motor Vehicles. 

Vehicle users should regularly check the DMV website for all types of updates on the highway use fee and any changes in the law. It is mandatory to make the payment on time, by renewing the vehicle registration ahead of time. This also helps to avoid penalties and late fees. Vehicle owners should maintain appropriate records of their fee payments as this might be of great help in case of discrepancies.

Impact on Trucking Companies

Fuel taxes have been a reliable source of funding to the transportation department in Virginia. With the introduction of electric vehicles, the income for the government on fuel taxes is reduced. This could be one of the reason why the state imposes highway use fee for heavy vehicle owners. This has impacted the trucking companies as well. Trucking businesses must pay a highway use fee based on the miles covered by their trucks in Virginia. This can result in significant increases in operating costs, particularly for corporations with large fleets. Companies must set aside more funds to meet these expenses, which may damage their entire budget and profitability.

Trucking businesses may raise freight rates to offset the higher costs incurred as a result of the highway use tax. This could affect their competitiveness, particularly in a price-sensitive market. Businesses must keep precise records of miles traveled within Virginia, which can increase administrative workload.

To avoid penalties, the Virginia DMV requires timely and accurate reporting, which necessitates the use of comprehensive tracking and compliance systems.

Future of Virginia Highway Use Fee

Fuel efficient vehicles, that is, vehicles that have a combined fuel economy of 25 miles per gallon or greater are required to pay the Virginia highway use fee. Low speed vehicles should pay an annual highway use fee of $25. The DMV has a complete chart of the complete HUF details with the current fees list. Vehicle owners can pay the fee during the time of registration of vehicle or truck owners can choose to pay the taxes with the mileage choice program of DMV.

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