Hw. Building Income

Hw. Building Income

Falls Short

Road-building income from Virginia’s new 2 per cent motor vehicle sales and use tax is falling sharply below estimates. Highway Commissioner Douglas B. Fugate said today. The levy went into effect September 1, meaning that it would be collected for 10 months of the present fiscal year, which began last July 1. It has been estimated to yield $20,085,000 during that period — but with half the time passed, the tax througl January had produced only $4,804,000 or 23.9 per cent of the total estimate. Commissioner Fugate pointed out that estimators had not expected half of the revenue to be produced during the first five months, since all 1966 model vehicles were exempt and in view of the realization that some people would buy cars prior to September 1 to avoid the tax. In addition, he noted, automobile sales dropped all across the country during the latter part of last year. In Virginia, sales of new domestic cars dropped 4 per cent in 1966. Observers have attributed this generally to a combination of tighter credit conditions, higher prices, higher taxes, and a reluctance by many prospective purchasers to part with their money. The Commissioner said that, “The results of the motor vehicle sales and use tax thus far are most discouraging, and it is becoming apparent that the $20 million allocated by the Highway Commission for highway improvements, based on anticipated returns from .this source, is not all going ito be available. 1