2016 Meals Tax Referendum
The Board of Supervisors voted on June 7, 2016 to place a meals tax referendum on the Nov. 8 election ballot.
State law authorizes counties, cities, and towns to levy a tax on prepared food and beverages, commonly called a “meals tax,” subject to certain restrictions. Most counties, including Fairfax County, may levy a meals tax only if the voters approve the tax by referendum.
The question presented in this referendum asks Fairfax County voters whether the Board of Supervisors should be authorized to levy 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 the taxable food and beverages. The Board of Supervisors has decided to dedicate the revenues to two purposes, which are specified in the ballot question. First, 70 percent of the net revenues would be dedicated to Fairfax County Public Schools. Second, 30 percent of the net revenues would be dedicated to County services, capital improvements and property tax relief.
The question also states that the Board of Supervisors’ reason for seeking authority to impose a meals tax is to reduce the County’s dependence on real estate taxes. Currently, nearly 65 percent of Fairfax County’s General Fund budget relies upon real estate taxes. State law limits what the County can tax and how it may otherwise raise revenue. Almost 90 percent of Fairfax County non-property tax revenues are capped, limited, or controlled by the state. A meals tax would give the County a new source of revenue, which would help diversify the County’s revenue base. At the maximum 4% tax rate, a meals tax would generate an estimated $99 million per year.
The tax would apply to prepared food and beverages at restaurants and similar establishments, although the law carves out some exceptions where the tax would not apply. It would apply to beverages, both alcoholic and non-alcoholic, that are served with a meal. It would not apply to groceries. Grocery and convenience stores would only collect the tax on ready-to-eat foods, like foods from the delicatessen. On a $5 meal, the meals tax would be $.20. On a $50 meal, the meals tax would be $2. A meals tax applies in addition to other applicable taxes, such as sales taxes.
A number of area jurisdictions already impose a meals tax, including Arlington County, the cities of Alexandria, Falls Church, and Fairfax, and the towns of Herndon and Vienna. Based upon state law, the County’s meals tax would not apply in the towns of Clifton, Herndon or Vienna.
If a majority of voters approve the meals tax referendum, then the Board of Supervisors may adopt an ordinance that specifies the tax rate and the terms of the tax. The ballot question dedicates the “net” revenues of the meals tax to the two purposes specified, so the Board of Supervisors would have the authority to allow the sellers to be compensated for their collection efforts and timely filing and remittance of the tax.
NOTE: Spanish translation forthcoming.
Meals Tax Referendum Pamphlet (PDF) This pamphlet is being distributed to households in Fairfax County.
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:
- 70 percent of the net revenues to Fairfax County Public Schools.
- 30 percent of the net revenues to County services, capital improvements and property tax relief.
IMPUESTO DE COMIDA
Con el propósito de reducir la dependencia del impuesto inmobiliario, ¿debe la Junta de Supervisores del Condado de Fairfax, Virginia, ser autorizada a aplicar un impuesto sobre alimentos preparados y bebidas, también conocido como impuesto de comida, según lo permite el Código de Virginia § 58.1-3833, a una tasa que no exceda el cuatro por ciento (4%) del monto aplicado por alimentos preparados y bebidas (los cuales, basados en la ley estatal, se aplica sólo a ventas fuera del pueblo de Clifton, y los pueblos de Herndon y Vienna que ya han implementado el impuesto de comida)? Los ingresos generados serán aplicados para los siguientes propósitos:
- 70 por ciento de los ingresos netos a las Escuelas Públicas del Condado de Fairfax.
- 30 por ciento de los ingresos netos a servicios del Condado, mejoras del capital y reducciones al impuesto inmobiliario.