A meals tax is one of the few additional revenue sources available to localities in the Commonwealth of Virginia.
The Code of Virginia, 58.1-3833, defines a meals tax as a “tax on food and beverages sold, for human consumption, by a restaurant…not to exceed four percent of the amount charged for such food and beverages.” The Code notes a number of exceptions, including church picnics, schools, hospitals, etc. Grocery stores and convenience stores selling prepared foods would charge the extra tax on those items. While some jurisdictions can impose a meals tax by simple majority vote of the governing body, counties must put meals tax proposals to referendum, asking the voters whether they support a meals tax. In 1992, the last time a meals tax proposal was on the ballot in Fairfax County, the special election referendum failed, 58 to 42 percent.
At its meeting on Tuesday, following a lengthy debate, the Board of Supervisors voted, 8 (Bulova, Cook, Foust, Gross, Hudgins, McKay, Kathy Smith, Storck) to 2 (Herrity, Linda Smyth), to send a resolution to the Circuit Court, asking that the court order a referendum for consideration on the November 8 ballot this year. The referendum language submitted by the Board states:
“For the purpose of reducing dependence on real estate taxes, shall the Board of Supervisors of Fairfax County, Virginia, be authorized to levy a tax on prepared food and beverages, otherwise known as a meals tax, as allowed by Virginia Code 58.1-3833, at a rate not to exceed four percent (4%) of the amount charged for prepared food and beverages (which based upon state law, is applicable only to sales outside of the town of Clifton, and towns of Herndon and Vienna that have already implemented a meals tax)? The revenues generated shall; be dedicated to the following purposes:
1. 70 percent of the net revenues to Fairfax County Public Schools
2. 30 percent of the net revenues to County services, capital improvements, and property tax relief.
Estimates indicate that a four percent meals tax could generate as much as $90 million in additional revenue per year for Fairfax County. Many school proponents see meals tax revenue as a boon to increased funding for K-12 education. Others wonder about the effect on senior citizens’ ability to enjoy eating out, and imposing an extra tax on a specific industry. If correspondence to my office is any indication, emotions, on all sides, are running high. Whether one agrees with the proposal or not, asking the voters to decide is the appropriate course of action. If the referendum is approved, the Board of Supervisors must adopt an ordinance, via public hearing, to establish a meals tax in 2017. If the referendum fails, the meals tax effort fails. Whatever happens, it’s up to the voters!
Penny Gross is the Mason District Supervisor, in the Fairfax County Board of Supervisors. She may be emailed at [email protected]