Sunday, February 25, 2024

Virginia Sales Tax Holiday on Track to Return Oct. 20-22

A row of backpacks at a Virginia school. (Nathaniel Cline/Virginia Mercury)

RICHMOND — Virginia’s sales and use tax holiday for school supplies, clothing and energy-efficient goods is on track to be reinstated Oct. 20 through Oct. 22 after the General Assembly approved amendments to the state’s two-year budget during a special session Wednesday.

The amended budget will now go for review to Gov. Glenn Youngkin, who has said one of his administration’s top priorities is to lower the cost of living for Virginians.

Lawmakers ended the regular legislative session in March without amending state code to extend the sales tax holiday, which expired July 1, a month shy of when Virginia has traditionally held the tax-free shopping weekend.

The amended budget passed Wednesday will authorize the state to schedule the holiday through July 1, 2025. While this year’s weekend will be in October, Virginia has typically held it in August ahead of the beginning of the school year.

Under state code, qualifying items free from sales and use tax are Energy Star or WaterSense products such as house appliances, school supplies, clothing and footwear, and certain hurricane preparedness equipment.

The sales tax rate for most localities in the commonwealth is 5.3%, according to the Virginia Department of Taxation. Some areas have additional regional or local tax as well.

According to the Center for State Tax Policy at the conservative-leaning Tax Foundation, Virginia is one of 18 states including South Carolina and West Virginia that offer a sales tax holiday.

While Virginia’s sales tax holiday is broadly popular, groups such as the Tax Foundation have been critical of it, with senior policy analyst Manish Bhatt describing tax holidays are “political gimmicks” that distract from genuine, permanent tax relief.

“Policymakers should reduce the sales tax rate year-round, rather than relying on politically popular but economically inefficient and ineffective tax holidays,” Bhatt wrote this summer.

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