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how to calculate virginia highway use fee

On both a federal and a state level, imposing a VMT tax does require lawmakers to make some hard decisions on trade-offs. Itis sometimes referred to as a hidden tax, as it leaves taxpayers less well-off due to higher costs and bracket creep, while increasing the governments spending power. Some states have levied motor fuel taxes since 1919, and all states (including the then territories Alaska and Hawaii) and the District of Columbia had implemented a motor fuel tax by 1946. This would allow gas stations to collect and remit VMT taxes similar to today, though it would require retrofitting vehicles in ways that could raise privacy and other legal concerns. The federal motor fuel excise tax has been levied since 1932. 2 Axles - Car, SUV, Van, Pickup. [14] This would be a problem for states and the federal government in the long term, but a state like California, where EVs and hybrids already make up almost 8 percent of auto sales, may be impacted sooner. A sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Look to Your Summons to Determine Code Section. The issue of privacy is not a small issue. Given the financial situation many states find themselves in due to the coronavirus pandemic, it may be necessary for states to involve private investment to fund crucial projects. [43] Congressional Budget Office, Reauthorizing Federal Highway Programs: Issues and Options, 8. [16] Additionally, MPG in new cars actually declined between 1985 and 2005. To address the latter, a paper from the RAND Corporation, a nonprofit think tank, suggested making a third party responsible for the mileage data or having multiple vendors offer metering devices to give customers a choice. [47] Scott A. Hodge, Cautionary Notes from CBO on the Effects of Federal Investment, Tax Foundation, June 17, 2020, https://taxfoundation.org/federal-infrastructure-bill-cbo-effects-of-federal-investment/. Duke Carter returned to 10 News in January 2022. How to Calculate Virginia Sales Tax on a Car. At the federal level, the Highway Trust Fund is projected to run out of money by the end of next year. The picture is slightly different when looking at federal tax collections, where rates have held constant in recent years. [49] Federal Highway Administration, Why Does the Interstate System Include Toll Facilities? Sept. 8, 2017, https://www.fhwa.dot.gov/infrastructure/tollroad.cfm. I paid this yesterday and it calculated to be 45% of the whole renewal. [13] Laura Bliss, Should Electric Vehicle Drivers Pay Per Mile? Bloomberg, July 23, 2019, https://www.bloomberg.com/news/articles/2019-07-23/why-charging-electric-cars-for-road-use-is-tricky. 31, 2020. https://taxfoundation.org/gas-tax-revenue-decline-as-traffic-drops/. The argument could be made that everyone benefits from a well-maintained network of roads, for instance, to transport goods around the country, and as such, everyone should contribute. For instance, in a non-tracking system, drivers that live in Michigan but work in Illinois would only pay the tax in Michigan even though they drive in both Michigan and Illinois. WebThis can be done using our updating tool, by email, by phone at 703-222-8234 [711 TTY], or in person at the Government Center. In 1994, the first year after the latest federal tax hike, a passenger car averaged 20.7 MPG and drivers paid 3.2 cents in taxes per VMT. To solve the issue, some states find other funding sources outside motor fuel taxes. Outlays are projected to outpace current revenue by a cumulative $189 billion over the next decade. The law also guarantees that any state receives 95 cents on the dollar contributed to the Highway Trust Fund by a states residents. [4] Robert S. Kirk and William J. Mallett, Funding and Financing Highways and Public Transportation, Congressional Research Service, May 11, 2020, https://fas.org/sgp/crs/misc/R45350.pdf. Specific drivers must pay additional fees, like those who own electric vehicles or cars that get 25 or more miles to the gallon. 0000040606 00000 n Calculate speeding fine. Inflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. E-ZPass $4.00. [34] From 2022, Virginia plans to implement an optional VMT tax for vehicle owners subject to the Highway Use Fee. The following vehicles are exempt from the HUF: See Code of Virginias Highway Use Fee page for a full explanation. And over time, this car enthusiast wanted a car that benefitted the environment and his wallet. While 36 states have increased motor fuel tax rates over the last decade, the federal government has not updated the gas tax since 1993. [22] Congressional Budget Office, Highway Trust Fund AccountsCBOs Baseline as of March 6, 2020.. Significant concerns regarding privacy must be addressed against a desire for a targeted, equitable, and efficient tax. Externalities can be caused by either production or consumption of a good or service and can be positive or negative. CAFE standards were first enacted in 1975 and have worked to improve fuel economy. u4$4: m+1l#`\"Y`daAx339#}8{4'+_@ * Use the US Toll Calculator App! 0000007243 00000 n Looking at total gas tax collections illustrates this decline. A broad tax base reduces tax administration costs and allows more revenue to be raised at lower rates. Specific drivers must pay additional fees, like those who own electric vehicles or cars that get 25 or more miles to the gallon. Excise taxesare commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. [8] Amir El-Sibaie, Electric Vehicles Will Have a Long-Term Impact on the Gas Tax, Tax Foundation, Feb. 12, 2018, https://taxfoundation.org/electric-vehicles-gas-tax/. 901 0 obj <>stream Highway Use Fee and Mileage-Based User Fee Program Federal gas tax collections in 2018 totaled $26.7 billion. Essentially, this approach would entail a unique kind of inflation indexing of gas taxes to roughly approximate revenue collections under a VMT. Our research has shown that a mileage-based user fee approach is viable, and that drivers are open to a user pays approach to transportation funding, Eastern Transportation Coalition Executive Director Dr. Patricia Hendren said in the release. The investments support Virginias economic recovery and transform transportation solutions for generations to come.. The Tax Foundation is the nations leading independent tax policy nonprofit. %%EOF Those expiring in June are extended for 60 days and those expiring in July are extended for 30 days. WebVirginia Speeding Ticket Court Costs Court costs for Speeding tickets (also known as Processing Fees) are $62.00 for the first traffic ticket and $11 for each additional charge with the same court date. [11] The U.S. Energy Information Administration estimates that gas consumption will decline 19 percent through 2050.[12]. Copyright 2023 WSLS.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. For fuel-efficient vehicles, the fee is calculated to reflect the 85 percent of the difference between motor fuel taxes paid on the fuel-efficient vehicle and motor fuel taxes paid by a vehicle driving 23.7 MPG.[34]. Instead of using fuel as a proxy for road usage, taxing actual usage would better respect the benefit principle and guarantee that the tax acts as a user fee. A flat fee per mile based on vehicle weight measured by the odometer would be the simplest version of a VMT tax to administer and avoids most privacy issues. According to Congressional Budget Office (CBO) estimates, the Highway Trust Fund will run out of money by the end of 2021 and the deficit is projected to be almost $70 billion over the first years after the FAST Act funding expires.[3]. Any customer who has a vehicle registration expiring in July and later will see the fee reduction reflected in their renewal notices, though, due to COVID-19, all driver's licenses and identification cards expiring on or before July 31, 2020, get extensions, to August 31 at the latest. State Sen. Janet Howell (D-32nd District) says the highway use fee which applies to cars that average at least 25 miles per gallon and is calculated based on the Despite inflation, the federal gas tax rate has been locked in at 18.4 cents per gallon since it went up from 14.1 cents in 1993, meaning theres less money to fund highway improvements. [10] United States Department of Transportation, Corporate Average Fuel Economy, Mar. I am proud that, by passing this important legislation, we have made our roads safer and created a sustainable transportation funding structure, all while lowering vehicle registration fees so Virginians can keep more of their hard-earned money. Looking for fun and affordable date. Based on that calculation, assuming that MPG climbs to 27.5 MPG (1.5 percent improvement a year for five years) in the coming years and tax rates remain flat, the tax burden per VMT would drop from 2.1 cents to 1.84 cents (2018 dollars). Tractor trailers and heavy-duty trucks also contribute significantly to overall road damage given their weight. While many states have increased motor fuel tax rates over the last decade, the federal government has not updated the gas tax since 1993. Code of Virginia Code - Chapter 7. Highway Use Fee and A driver must only pay this if they are registering a fuel-efficient vehicle or an electric motor vehicle. [29] Basing the rate on weight per axle encourages commercial truckers to limit weight per axle. [50] Baruch Feigenbaum and Joe Hillman, How Much Gas Tax Money States Divert Away From Roads, Reason Foundation, June 30, 2020, https://reason.org/policy-brief/how-much-gas-tax-money-states-divert-away-from-roads/#new-york-diversions. States have levied these taxes since 1919, and by 1932, when the federal tax was introduced, the then-48 states and the District of Columbia were collecting taxes on motor fuel. Motor fuel taxes also act as a user fee where the amount of fuel purchased acts as a rough proxy for a drivers contribution to road wear-and-tear. 0000006972 00000 n [40] Devising a tracking system that does not run afoul of the Constitution is obviously a prerequisite for using GPS tracking. [37] Use of GPS in Oregon is voluntary to alleviate privacy concerns, though a voluntary system can only work in parallel with a gas tax, which is not a permanent solution. [5] The average state excise tax rate in 2020 is 25.6 cents, but gasoline is taxed at an average rate of 36.4 cents per gallon when other taxes are included. A gas tax is commonly used to describe the variety of taxes levied on gasoline at both the federal and state levels, to provide funds for highway repair and maintenance, as well as for other government infrastructure projects. Odometer readings could be done at yearly inspections or by installing an on-board-unit (OBU) that electronically transmits VMT to a central computer. or less go from $40.75 to $30.75, Passenger vehicles 4,001 lbs. Virginia Use The Toll Calculator For A Specific Trip Toll Calculator Otherwise, if you are traveling the full length of the Chesapeake Expressway, these tolls currently apply for the following vehicle classes: Toll as of May 1, 2021. [30] That means the state continues to collect gas taxes on all motorists and offers a tax credit for fuel taxes paid. In order to truly live up to the benefit principle and user fee ideal, the taxes collected on transportation would be sufficient to cover transportation expenditures. Since then, the rate has increased five times to todays 18.4 cents (including 0.1 cent reserved for the Leaking Underground Storage Tank Fund). If Virginia wants to encourage a transition to clean energy and electric vehicles, which is absolutely essential to addressing climate change, we will need to look to other options to pay for transportation projects, Northern Virginia Transportation Alliance President Jason Stanford says. In the contiguous 48 states, Tennessee could wholly cover spending with dedicated transportation revenues (100 percent), while North Dakota only raises less than a quarter of the revenue required to pay for transportation spending (23 percent). Click to share on Facebook (Opens in new window), Click to share on Twitter (Opens in new window), Parents group files recall petition against Dranesville District school board member, Center for Transportation Public-Private Partnership Policy, instructions how to enable JavaScript in your web browser, Bijan Ghaisars family settles civil suit over five years after fatal shooting by Park Police, FCPD: Woman arrested for abducting 3-year-old at Tysons Corner Center, Live Fairfax: Top 5 date nights (or day dates) on a budget in Fairfax County. The government agency maintains accountability to the public. This year, the Highway Trust Funds current funding tool, the FAST Act, expires, which means federal policymakers should decide on what the future federal highway funding (or maybe spending) looks like. Figure 8 is a map showing the percentage of state highway spending that could be covered by dedicated funds. One report has EVs making up 17.5 percent of sales in the U.S. by 2028, and this could be devastating to tax collections. And that keeps track of the miles and the time of use but doesnt specifically beam out information about where you are., A U.S. Park Police cruiser in McLean (file photo) The federal government has agreed to pay $5 million to settle a civil lawsuit brought by the parents of McLean resident, Wolftrap Creek in Wildwood Park (staff photo by Angela Woolsey) FCPS Scales Back Falls Church HS Expansion The renovation and expansion of Falls Church High School, currently underway, is, (Updated at 2:25 p.m.) A D.C. woman has been arrested for allegedly abducting a kid from the Cox Discovery Cove at Tysons Corner Center. Converting the existing system to a VMT tax could make tax collection more effective as trucking companies would not have to deal with apportioning tax payments to each state; it could be relatively automatic. The intent of this legislation is to offset the loss in taxes that would have been paid via fuel costs. A vehicle-miles-traveled or mileage-based user fee approach ultimately makes a lot of sense, Stanford said. The average tax rate is the total tax paid divided by taxable income. On average, VA speeding tickets cost between $350 to $400 if you include taxes and other fees. This discrepancy between revenue and expenditures breaks with the user-fee principle and limits the effectiveness of taxes on transportation by keeping the price of driving artificially low. Tax Rates The current tax rate for most personal property in Fairfax County is $4.57 for each $100 of assessed value. As an example, an 80,000-pound 5-axle tractor trailer causes the same damage to a road as 9,600 cars even if it only weighs 20 times as much. While traditional motor fuel taxes will eventually become outdated, they could be a suitable policy tool in the short term for most states. [49] Hence, they can also be structured with regular payments from government to the private company financing highway projects. Inflation indexing refers to automatic cost-of-living adjustments built into tax provisions to keep pace with inflation. Maximum Fine for Speeding Tickets in Virginia Help us continue our work by making a tax-deductible gift today. [51] If Arkansas lawmakers want to adhere to the benefit principle, it would be appropriate to raise the revenue through transportation-related taxes instead. WebHighway Use Fee and Mileage-Based User Fee Program Chapter Create a Report Print Search Chapter Chapter 7. [48] Jim Parsons, Maryland Shortlists Four Teams for Planned $11B P3 Highway Project, Engineering News-Record, July 20, 2020, https://www.enr.com/articles/49743-maryland-shortlists-four-teams-for-planned-11b-p3-highway-project. The Virginia Department of Transportation (VDOT) recently broke ground on the I-95 Southbound Auxiliary Lane project, intended to help ease a notorious bottleneck on the freeway near Occoquan, Virginia. From the Pigouvian perspective, the motor fuel tax is one of the best policy options used to mitigate the externalities associated with automotive transportation.[8]. Heres a breakdown of the new registration fees that will go into effect on July 1: Passenger Vehicles 4,000 lbs. In the U.S., commercial vehicles are often tracked as their diesel tax payments are distributed among the states that trucks drive through. In 1994, a passenger car averaged 20.7 miles per gallon (MPG) and drivers paid 3.2 cents in state and federal tax per VMT. Location tracking would also allow states to levy taxes on all driving within the stateregardless of the home state of the vehicle. Increased fuel economy is a positive development, but we should acknowledge that it undermines the current road funding regime and requires that policymakers adjust that regime moving forward. Such a system could potentially also be levied on EVs by taxing battery charges based on the minimum distance an EV can drive on a full charge. 0000005039 00000 n This would guarantee that motor fuel tax rates would follow developments both in technology and in inflation and maintain cents raised per VMT. One potential solution that would reestablish the user fee systemis to levy a taxon vehicle miles traveled (VMT). This tax is set to expire in 2022 but this year voters get to decide whether to make it permanent. There has sometimes been resistance to taxes on EVs on the grounds that they are environmentally preferable to traditional gas-powered vehicles and thus create fewer externalities. It also makes it difficult to secure proper apportionment between states. 0000001016 00000 n The problem with a simple solution is that a simple rate per VMT severely limits the ability of the tax to properly target the tax beyond simple VMT and weight per axle. The Virginia Department of Motor Vehicles is currently fielding requests from private contractors to operate the program, which it anticipates rolling out in July 2022. States have an added complication regarding out-of-state drivers if no federal system exists. [41] Congressional Budget Office, Issues and Options for a Tax on Vehicle Miles Traveled by Commercial Trucks, October 2019, 5, https://www.cbo.gov/system/files/2019-10/55688-CBO-VMT-Tax.pdf. The HUFs calculation is based on: The vehicle's fuel efficiency The fuel tax rate at the time the vehicle was registered The average number of miles driven See Code of Copyright 2023 by WSLS 10 - All rights reserved. See Congressional Budget Office,The Highway Trust Fund and the Treatment of Surface Transportation Programs in the Federal Budget, June 11, 2014,http://www.cbo.gov/sites/default/files/45416-TransportationScoring.pdf. A constant VMT is used to illustrate the difference in tax revenue collected per VMT. Rather than using taxes on cars or motor fuel as a proxy for transportation, a tax levied directly on miles gets closer to capturing the externalities and approximating the road maintenance cost of each vehicle. Source: U.S. Census Bureau; Federal Highway Administration; authors calculations. Virginia Vehicle Sales Tax & Fees [+Calculator] A narrow tax base is non-neutral and inefficient. [13] However, one forecast suggests EVs may comprise 17.5 percent of U.S auto sales by 2028. As cars have become more fuel efficient and electric vehicle adoption increases, it is increasingly difficult to strike the right balance of raising adequate revenues from traditional sources and adhering to a usage-based philosophy of highway financing.. [22] Importantly, these projections were made before the coronavirus lockdowns, and actual revenue will almost certainly fall short of estimates.[23]. Enrollment now open for DMVs new Mileage Choice Virginia hits gas pedal on plans to fund infrastructure with A simple federal VMT tax would, based on 2018 data, be 1.4 cents per VMT to raise enough revenue to pay for highway expenses ($46 billion). While including more parameters into the calculation of the tax rate could yield some positive results, it should probably only be pursued up to a point. 0000006132 00000 n 0000045545 00000 n Many cars are not using gas at all, such as electric, so that system of highway finance has been coming apart for a long time, said Jonathan Gifford, director of George Mason Universitys Center for Transportation Public-Private Partnership Policy in Arlington. Increasing the amount of detail tracked by the system increases the efficiency of the tax. [2] Carl Davis, How Long Has It Been Since Your State Raised Its Gas Tax? Institute on Taxation and Economic Policy, Feb. 26, 2020, https://itep.org/how-long-has-it-been-since-your-state-raised-its-gas-tax-maps/. Webeligible for a reduced fee of $41) $83.00 Returned check fee (as required by the Code of Virginia) $85 if the check is $350 or less; $50 + 10% of the check amount if check is Seeking new ways to fund road repairs and transit projects, Virginia established the mileage-based fee program in April 2020 when the General Assembly adopted a major transportation bill that also established the highway use fee and raised gas taxes for the first time in more than three decades. <<326E698EB4CD224197A9CF8FA1C7D3B7>]/Prev 126098/XRefStm 1283>> A simple fee per VMT would not be equal across all vehicle types as it should be differentiated based on weight and number of axles. 2 Axles - Car, Motorcycle, SUV, Van, Pickup E-ZPass $4.00 Invoice $4.00 3 Axles - includes any trailer E-ZPass $8.00 867 0 obj <> endobj [19] U.S. Energy Information Administration, Light-Duty Vehicles, Short Wheelbase Fuel Economy, Annual, accessed July 2020, https://www.eia.gov/opendata/qb.php?category=711246&sdid=TOTAL.PCFRRUS.A. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. The first levy was 1 cent per gallon and was originally a deficit-reduction measure following the Great Depression. The fee schedule for the mileage-based user fee program shall be calculated by dividing the amount of the highway use fee as determined pursuant to subsection B of or less go from $40.75 to $30.75, Pickup and panel trucks 4,001 to 6,500 lbs. Heres a breakdown of the new registration fees that will go into effect on July 1: Motorhome registration fees stay the same. [30] OReGO, Get started FAQ, accessed July 21, 2020, https://www.myorego.org/get-started/#faq. According to a GAO analysis from 2012, in a survey of state DOT officials, 45 out of 51 (including D.C.) said that addressing privacy-related concerns would present a great challenge to developing a mileage fee program in their state. To use standard view, enable JavaScript by changing your browser options, then try again. [44] These projections were made prior to the coronavirus pandemic, which means that actual numbers will likely be worse. [3] Congressional Budget Office, Highway Trust Fund AccountsCBOs Baseline as of March 6, 2020, Mar. Currently the requirement under CAFE is to increase average MPG by 1.5 percent a year through 2026. 0000004173 00000 n New Mexico, New York, and Oregon have a gradually increasing tax based on vehicle weight (tax kicks in at different rates). https://www.dmv.virginia.gov/vehicles/#HighwayUse_fee.asp. In Oregon, even with a GPS system, the location of the vehicle is supposedly never disclosed to anyone but the driver. Over the last dozen years highway funding has increasingly been paid for by the federal governments general fund. If the current structure is preserved, for revenues to match expenses, the federal rate would have to increase by 12.6 cents to 31 cents per gallon and be adjusted regularly to follow increasing costs of road maintenance.[45]. This could potentially be accomplished by using standard traffic data to approximate the amount owed by commuter states to destination states. For a truly long-term solution to fund highway spending in the United States, policymakers should consider alternatives to simply raising the motor fuel tax rate or figure out a way to lower overall costs. A differentiated VMT tax based on driving location, and perhaps even time of travel, could also more precisely capture the externalities related to transportation. [31], This is an example of one issue with VMT taxes: they could prove to be very expensive to administer and enforce. [24], Furthermore, it is not given that maintenance cost per mile has grown at a similar rate as inflation. Drivers frustrated by highway use fee in Virginia "Fuel-efficient vehicles" are defined as vehicles that have a combined fuel Absent these adjustments, income taxes are subject to bracket creep and stealth increases on taxpayers, while excise taxes are vulnerable to erosion as taxes expressed in marginal dollars, rather than rates, slowly lose value. The future of funding for Americas highways has been the topic of much political discussion for decades. Based on Figure 1, states have done a better job of keeping rates in line with inflation than the federal government. If it is still policymakers aim to fund transportation with taxes levied on transportation, change is needed. Clean Special Fuel Plates This is an example of differentiation based on certain assumptions and could be refined further. An externality, in economics terms, is a side effect or consequence of an activity that is not reflected in the cost of that activity, and not primarily borne by those directly involved in said activity. One option the Commonwealth has started pursuing is a mileage-based user fee that drivers would pay depending on how much or little they travel. ROANOKE, Va. Some may be surprised by the highway use fee youll have to pay when renewing your cars registration, leading to cost concerns for some in our area. Private investment can be designed in several ways, including as toll roads, that guarantees the investor a revenue stream. Motorcycles get the lowest rate as they cause the least damage and contributes the least to congestion. Electric vehicles pay a flat fee ($88.20 WebThe Virginia Department of Transportation (VDOT) is responsible, under 56-468.1, for calculating the monthly fee per access line and reporting it to all affected localities and 0000024572 00000 n startxref For most of the past decade, Virginia, like the rest of the country, has been wrestling with the challenge of identifying the best approach to generating sufficient revenues to support transportation investments, she said in a statement. That means the rest of the expenditures are covered by non-transportation-related tax revenues (see Table 3) collected from people who may not use the roads, or activity not related to road use. U.S. states apportion business profits based on some combination of the percentage of company property, payroll, and sales located within their borders. [33] Another option may be to install systems at gas stations and in vehicles that communicate VMT information when filling the tank. Tolls That differentiation would respect the different costs of road maintenance associated with heavier vehicles. [17] United States Environmental Protection Agency, The 2019 EPA Automotive Trends Report, 8. Note: Passenger cars includes both smaller vehicles as well as SUVs, vans, and pick-up trucks. However, it seems JavaScript is either disabled or not supported by your browser. Figure 7 is a graph showing the MPG by vehicle type by year that illustrates the big jump in the late 1970s. See OReGO, Get started FAQ.. It remains highly unlikely that a federal VMT tax could be implemented as a replacement to the motor fuel taxes so soon. The consultant KPMG previously estimated that Virginia would lose nearly 33% of its gas tax revenues by 2030 due to fuel efficiency, or approximately $260 million. One of the biggest threats against the levy is electric vehicles (EVs) as these cars do not contribute to the state highway funds or the federal highway funds. Vehicle Miles Traveled (VMT) Tax | Highway Funding | Tax This fee supports the Commonwealth Transportation Fund, which helps maintain our roads, highways, transit and airports. Like most laws passed in Virginia, it will take effect on July 1. Figure 1: HUT Transactions Is North Carolinas Highway Use Tax rate competitive? r/Virginia on Reddit: Highway Use Fee (HUF) Cash/AET $4.00 .) jhh{v$Fyw3?0$OEY 0\4!yl7R For instance, Arkansas has, since 2012, dedicated part of the general sales tax levy (0.5 percent of the rate) to roads and bridges. A good option to increase authorities expertise with the system would be to implement VMT taxes on commercial freight vehicles. In Oregon, which is running a pilot project called OReGO, a voluntary GPS system determines only whether a registered vehicle is driving on a public road in Oregon. WebVirginia Toll Calculator Looking to calculate tolls for a road trip on Google Maps? Carpenteri was surprised to receive a notice for a $150 highway use fee when he had to renew his car registration last month.

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how to calculate virginia highway use fee