HB 2006 (McNamara) and SB 1172 (Suetterlein), similar bills that would have eliminated the 1 percent local option sales and use tax on groceries, have failed to emerge from their respective committees. VACo opposed both bills; although the legislation proposed to replace the lost revenue with a state appropriation based on each city and county’s monthly pro rata share of total sales and use tax collections, VACo pointed out in testimony on the bills that localities would be relying on the state to honor this commitment in the future.
HB 2004 (McNamara) would have capped rates for local meals taxes at 4 percent, after January 1, 2028; the bill proposed to allow rates of up to 6 percent after approval in a referendum initiated by resolution of the local governing body or on the filing of a petition signed by 10 percent of the registered voters in a locality. These provisions would apply to counties, cities, and towns. VACo opposed this legislation, which would place limits on the additional authority to raise revenue that counties were granted in 2020. Currently, counties may impose meals taxes at rates of up to six percent without seeking voter approval via referendum; cities and towns are not subject to caps on meals tax rates. The bill failed in a subcommittee of House Finance on Monday morning.
VACo Contact: Katie Boyle