Wednesday, July 6, 2022

Governor’s recommendation eliminates groceries from sales tax bill

Gov. Northam's amendment to Sen. Norment's sales tax bill eliminates groceries from being taxed. (Photo courtesy of Colonial Williamsburg.)
Gov. Northam’s amendment to Sen. Norment’s sales tax bill eliminates groceries from being taxed. (Photo courtesy of Colonial Williamsburg.)

Gov. Ralph Northam won’t subject groceries to the proposed sales tax bill, according to his recommendation to the Senate.

The bill submitted by Sen. Tommy Norment, R-James City County, will raise the sales tax in the City of Williamsburg, and James City and York counties by 1 percentage point.

The original proposal would’ve also subjected groceries and food for “human consumption” to the sales tax increase. Northam’s recommendation also proposes maintaining the $2 transient occupancy tax, which would’ve been eliminated in Norment’s proposal.

If Northam’s recommendation is approved by the Senate, it will eliminate the tax collected for nightly stays in hotels, motels, and bed and breakfasts in Greater Williamsburg, according to Norment’s proposal.

“It affects everyone who eats, drinks and visits Williamsburg,” said Karen Riordan, president of the Greater Williamsburg Chamber and Tourism Alliance.

Williamsburg would also need to roll back its tourism tax increase on meals, lodging, and admission tickets. That tax was passed last year, with the expectation that it will take effect on July 1, if it is not repealed, according to Norment’s proposal.

If the bill becomes law, it could mean $2.2 million of new revenue for Williamsburg, according to Norment’s proposal. But that is based on groceries being taxable items. The governor’s message did not include revised accounting, and calls to his office were not immediately returned.

Riordan said the added revenue could serve as a funding mechanism for the area and produce funds to build a sports facility and a performing arts center.

In James City County, interim county administrator Bill Porter’s proposed budget includes a 2-cent real estate tax reduction for county residents, if the proposed sales tax bill becomes law.

If passed the bill would generate $5.5 million worth of revenue for
James City County, Porter said during his budget proposal news conference earlier this month. That, too, was based on the bill as written, which included groceries.

Half of the revenue from the increase would be directed toward marketing the Historic Triangle through the The Tourism Council of the Greater Williamsburg Chamber and Tourism Alliance, while the other half of the revenue would be given directly back to the localities the tax was collected from, according to Norment’s proposal.

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