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Countywide Dialogue on Transportation: Income Tax

What Can You Do?

Funding - Read about Fairfax County's additional funding options.
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Documents - View maps and other related documents for this project.
Survey- Read overview summary of survey results

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.

Definition:

Tax on earnings of individuals and/or businesses that reside within Fairfax County

Current Rate:

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+

Example Rate:

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)

Requirements:

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.

Bond Eligibility?

There is a five year sunset on this source which restricts bonding ability.

Who Pays?

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 .

Text-only version of income tax effect on households

Income tax effect on households; see text-only version if using a screenreader