Spurned diesel VW drivers could see tax hike

Posted at 4:24 PM, Feb 16, 2016
and last updated 2016-02-16 19:42:09-05

Millions of drivers across California could be in for a tax cut at the gas pump this summer, but some San Diego drivers could actually see their gas bills go up.

Tim Coats thought his Volkswagen Golf diesel had it all.

"I think it's a good blend of performance, and reliability, and economy,” Coats said.

But it was too good to be true.

"Apparently Volkswagen had to cut some corners in order to make that happen,” Coats said.

To get that perfect mix, Volkswagen equipped its TDI diesel cars with defeat devices that tricked emissions testing equipment.

As the automaker faces billions in fines, Coats and his fellow VW owners are also reeling. 

"If I want to sell it, or get rid of it, or trade it in, or do whatever to it, I don't know what the potential ramifications of that are,” Coats said.

Coats paid about $16,000 for the used car. He says the scandal has pushed its value down even more.

But it appears a new hit is coming.

In July, Coats and the nearly two million diesel drivers across California could see a tax they pay at the pump rise.

"it's kind of a perfect storm, so to speak, for Volkswagen owners,” Coats said.           

Later this month, the state Board of Equalization will consider raising the per gallon tax on a gallon of diesel from 13 to 16 cents, a 23 percent hike.

That's on top of sales and federal taxes.

“I'd say I'm pretty upset about it, just because it almost seems like they're taking advantage of the situation,” Coats said.

The board sets gas tax rates each year based on projections of price and consumption that are supposed to even out year to year.

Right now, all Coats has to show for his Volkswagen troubles is this care package, with a $500 cash card, and $500 to spend at any VW dealership.

"You’re kind of stuck with a product that is almost illegal in a sense and costing you more money than you initially expected,” Coats said.