Countywide Dialogue on Transportation: Income Tax
In 1989, the General Assembly authorized Northern Virginia jurisdictions (and Norfolk and Virginia Beach) to impose a 0.5% local option individual income tax by referendum to fund only transportation. This optional income tax included a five-year sunset provision. In Fairfax County, it could raise $229 million per year.
- Tax on earnings of individuals and/or businesses that reside within Fairfax County
- 2% for Taxable Income $0-2,999
- 3% for Taxable Income $3,000-4,999
- 5% for Taxable Income $5,000-16,999
- 5.75% for Taxable Income $17,000+
- Additional 0.5% income tax at each tax bracket - currently, state code allows any increment of one-quarter percent up to a maximum rate of 1%.
Potential Annual Revenue at Example Rate:
- $229 million (0.5% increase)
- Board of Supervisors has authority initiate a referendum to implement an income tax for a 5 year window. Anything beyond 5 years would require legislative action.
- There is a five year sunset on this source which restricts bonding ability.
- Fairfax County businesses and residents
Who Doesn't Pay?
- Non-residents that work in Fairfax County
Effect on Household:
- See below table, income tax cannot currently be increased by a fraction of a percent but table also shows 0.5% for example purposes
- Additional Tax on Income of $77,890 is $389.
- $77,890 is the Average Taxable income per Fairfax County tax return, FY 2009. Source: FY 2011 Annual Report, Virginia Department of Taxation .