Virginia – State On The Verge Of Approving Its First Local Option Sales Tax

Virginia is on the verge of creating local option sales tax authority for precisely one jurisdiction, and it’s been flying completely under the radar. Halifax County, population 35,000, is about to upend Virginia’s sales tax system and potentially open the door to local option sales taxes across the Commonwealth.

There are already local sales taxes of a sort in Virginia. The state rate is 4.3 percent, with a mandatory 1.0 percent local add-on, administered by the state and disbursed to local governments. A further 0.7 percent is imposed in planning districts that meet certain criteria: a population of 1.5 million or more, at least 1.2 million vehicle registrations, and at least 15 million transit rides per year. That revenue is deposited into local transportation authority funds in the two planning districts which currently qualify, Northern Virginia and Hampton Roads.

A big shift came last year, when the legislature created a new 1.0 percent sales tax for the Historic Triangle, consisting of Williamsburg, James City County, and York County. It, perhaps, could be said to lay the groundwork for what Halifax County is now seeking.

For The Full Story: Tax Foundation

Tax Foundation
by jared walczak
february 14, 2019