MORE INFO on Tax Parity Issue:
Restaurants, Attractions and Hotels Say Two General Assembly Bills Represent a Nearly $500-million Tax on Industry and Unwitting Consumers
Virginia’s 95 counties have a new target to raise revenue: the restaurants, attractions and hotels that entertain and host locals and visitors alike. That has prompted the Virginia Restaurant, Lodging and Travel Association (VRLTA) to oppose two bills now under consideration in the General Assembly that would give counties the authority to raise potentially job-killing taxes to finance non-tourism related functions.
House Bill 785
Senate Bill 588
, which are now before committees in both chambers, would permit counties to raise meals taxes by as much as 6% without a local referendum. According to estimates from the Commonwealth itself, it could generate $453-million in new taxes statewide in FY 2022 alone.
Eric Terry, President of the VRLTA, maintains that voters are fed up: “It would be an enormous increase in taxes, and most Virginians don’t like that it can happen without their say-so.”
Of the past 60 attempts to pass a meals tax in counties in Virginia, 47 have failed with approximately 57% of the voters in opposition. Indeed, in a Google survey of 500 registered Virginia voters conducted on behalf of the VRLTA, fewer than one in ten (9.2%) responded that counties should be able to bypass voters to raise taxes.
“Meals taxes are regressive, punishing households less able to absorb the costs,” says Terry. “The consequences are clear: fewer customers dining out means a less-vibrant restaurant scene in Virginia.”
In addition to the higher meals taxes, the two pieces of legislation would:
- Enable counties to increase lodging taxes beyond 2% without prior approval by the General Assembly and to spend the money on services other than tourism marketing
- Allow counties to adopt admission taxes without authorization from the legislature and above the current limit of 10%
The state estimates those two levies would add another $26-million annually to the coffers of counties, bringing the overall impact of House Bill 785 and Senate Bill 588 to $479-million.
“Tourism is Virginia’s 5th largest private sector employer and a $26 billion a year industry generating $1.8 billion in state and local taxes and supporting approximately 490,000 jobs in the Old Dominion,” says Terry. “Singling out restaurants, hotels, and attractions to generate funds to pay for general service needs is not fair and will harm businesses, employees and consumers.”