Fairfax County staff propose food and beverage (meals) tax; Board to consider advertising March 18

Fairfax County budget staff presented a draft food and beverage tax ordinance at the Budget Committee meeting on March 11, 2025, and told supervisors they plan to bring the item to the full Board for authorization to advertise on March 18. The Board must set the maximum tax rate to advertise (Virginia Code allows up to 6 percent) and may set a dealer discount; the draft ordinance proposes a 3 percent dealer discount initially, reduced to 1 percent after two years. Phil Hagen, director of the Department of Management and Budget, said the county would not implement the tax earlier than Jan. 1, 2026, to allow time for county systems and businesses to prepare.

Why this matters: staff estimates each 1 percentage point of a countywide food and beverage tax would generate roughly $35 million in gross revenue annually (about $17.5 million per 1% in FY 2026 as a half year). The FY 2026 advertised budget includes nearly $60 million in agency reductions and proposes a 1.5-cent real estate tax increase; staff said a meals tax could offset some reductions or tax increases, but would not fully close large school funding requests. The draft also shows administration costs and compliance uncertainty will reduce net revenue.

What staff presented and the rules: Phil Hagen framed the tax as the statutory “food and beverage tax” (commonly called a meals tax or restaurant tax) and noted Virginia Code places the substantive definitions…