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Subcommittee holds bill to eliminate local grocery tax after local government revenue concerns
Summary
Senate Bill 1172 would eliminate the remaining local grocery tax and require state backfill for localities. The subcommittee voted to pass the bill by indefinitely after county and municipal associations warned of a large replacement cost.
Senate Bill 1172, carried by Senator Sutilin, would eliminate the remaining state grocery tax portions collected for local distribution and provide for state backfill to replace local revenues. Testimony to the committee focused on the regressive nature of grocery and hygiene taxes and on the local revenue impacts of elimination.
Why it matters
Proponents argued the tax is regressive and burdens working families, particularly low‑income households. Tom and Torsha of the Virginia Catholic Conference and Steve Rossi of the Family Foundation told the committee elimination would provide targeted relief to households struggling with inflation.
Local government groups, however, warned that the local option grocery tax yields roughly $320 million annually in revenue to localities and that reliable state backfill in perpetuity is uncertain. Katie Boyle of the Virginia Association of Counties and Joe Flores of the Virginia Municipal League urged caution, noting recent experience where a hold‑harmless payment had to be restored by the legislature.
Committee action
After public testimony and fiscal discussion, the subcommittee voted to pass Senate Bill 1172 by indefinitely (effectively tabling it) so that budget and replacement options could be fully considered.
What’s next
The bill was held; the committee indicated the issue will require broad budget analysis and decisions about whether the state will commit to a long‑term replacement of local revenue.
