March 26, 2013 3:00 PM, EDT

Va. Governor Signs Transportation Bill to Alter Fuel Tax, End I-95 Toll Plan

Interstate 81 — TT File Photo

Virginia Gov. Bob McDonnell (R) has signed a transportation bill that ends the 17.5-cent-per-gallon tax on diesel and gasoline, imposes taxes on wholesale fuel sales and prohibits tolls on Interstate 95 without legislative approval.

McDonnell’s press secretary Jeff Caldwell said that, with passage of the transportation funding measure, the governor would withdraw the application the state has before the Federal Highway Administration for permission to toll I-95.

The legislature must hold a meeting on April 3 to finalize minor amendments the governor made to the transportation funding agreement hammered out by the Virginia legislature in late February.

The bill McDonnell signed would take effect July 1 and institute a wholesale tax on fuel distributers of 6% for diesel and 3.5% for gasoline.

The measure also boosts the state’s sales tax to 5.3% from 5% and increases the vehicle sales tax to 4% from 3% to help pay for transportation improvements.