Voters will decide on a meals tax in Fairfax County.
The Board of Supervisors voted today to place a meals tax referendum on the county’s Nov. 8 election ballot. Voters will be able to vote yes or no on a meals tax in our county. The Board does not have the authority to implement a meals tax unless approved by voters.
The Department of Management and Budget estimates that $99 million in revenue would be generated from a 4 percent meals tax in the first year it was implemented. This estimate is based on (calendar year) 2015 taxable sales of food and drinks. (It should be noted that approximately $3 million of the $99 million in revenue would go to back to restaurants/businesses to offset costs of implementing the meals tax. Therefore, an estimated $96 million would be allocated as noted below.)
A meals tax would diversify the county’s tax revenue base. A 4 percent tax is equivalent to over 4 cents on the current (FY 2016) real estate tax rate. When the real estate tax is increased, this impacts all property-owning residents, regardless of their ability to pay. If a meals tax is approved by voters, it would apply to tourists, commuters and travelers, as well as residents who choose to dine out. For example, it’s estimated that tourists would generate $22.8 million in one year.
Counties in Virginia, including ours, can only establish a meals tax if a referendum is approved by voters (learn more about the Dillon Rule). Examples of our neighbor jurisdictions that have a meals tax in place include:
- Alexandria: 4 percent
- Arlington: 4 percent
- Falls Church: 4 percent
- Fairfax City: 4 percent
- Herndon: 2.5 percent
- Vienna: 3 percent
- District of Columbia: 10 percent