The Virginia House of Delegates and Senate passed competing bills on the state’s grocery tax, with the Senate version only ending the state’s portion of the tax and the House version ending the tax altogether.
Under current law, Virginia levies a 1% sales tax on groceries and adds an additional 0.5% statewide grocery tax for transportation funding. The state also gives localities a local grocery tax option, which allows them to impose up to 1% on groceries.
House Bill 90, which passed the House with bipartisan support 80-20, would eliminate the state grocery tax and remove the local option. The bill would also offset the revenue losses for localities by providing them with the funds they lost by ending their grocery taxes.
Senate Bill 451, which passed the Senate with bipartisan support 37-3, would only end the 1.5% collected by the state, but it would retain the 1% option for local governments. Although House Republicans sought to fully eliminate the tax, their proposals were shot down by Democratic leaders during the committee process.
Stephen Haner, a senior fellow for state and local tax policy at the free-market Thomas Jefferson Institute, told The Center Square lawmakers should end the grocery tax altogether.
“It would just be silly to leave a 1% sales tax in place,” Haner said. “It never makes sense, in fact is lousy tax policy, to have the state and local governments with different lists of taxable items. That is a horrible idea that will only grow if allowed.”
The Senate version is sponsored by Sen. Jennifer Boysko, D-Herndon, and the House version is sponsored by Del. Joseph McNamara, R-Roanoke. Both chambers would need to agree on a version of the grocery tax reform legislation before they could send a proposal to the governor. Gov. Glenn Youngkin supports full repeal of the tax, rather than partial repeal. Republicans have a narrow majority in the House and Democrats have a narrow majority in the Senate.
