Virginia Beach residents and restaurateurs urge council to roll back meals tax

Dozens of residents and restaurateurs urged the Virginia Beach City Council on April 15 to reduce or repeal the city's 6% meals tax, which many speakers said stacks on top of the 6% sales tax and effectively raises the cost of prepared food by about 12 percent.

"This tax doesn't just hurt owners or myself. It punishes the entire industry," said Marissa Ferguson, who identified herself as a restaurant worker, describing razor-thin profit margins and customers "double take" when presented with higher checks. "We're not asking for a handout. We're asking for fairness," she said.

Speakers representing restaurants, employees and trade groups gave multiple examples and figures. JB Moss told the council he had researched municipal rates and said, "There are 19,500 cities in the United States. 87% of them have 0 meals tax," and that most cities that do impose a meals tax charge between 0.5% and 1%. Amber Costa, owner of The Stock Pot and a board member of industry groups, told council that, based on city projections, the meals tax is expected to be "the third highest tax or fee paid per household in fiscal year 26-27."

Debbie Lou Hague, president of the Virginia Beach Restaurant Association, said the association is urging a reduction to 3.5% and that restaurateurs across districts had come to the meeting to press the point. "We urge you to reduce the tax to 3.5," she said.

Several speakers described operational impacts: Amber Costa said restaurants pay credit-card processing fees on taxes they collect and absorb costs rather than passing them to customers; Emily Johnson, a young restaurant worker, said coworkers have seen tip income decline. Owner-operators such as Kevin Sharkey and Greg Alkire warned that higher dining costs can change visitor behavior and make Virginia Beach less competitive as a tourism destination.

Not all public comments focused solely on the meals tax. Nicole Davis, executive director of the Independence Center, used her time to request continued investment in the city's community organization grant program, saying since July the center had served 157 residents and provided referrals to more than 780 people. Martha Thoreau asked council to raise the personal-property tax threshold that affects people with disabilities, noting the current threshold referenced in the transcript is $29,000 in total income.

Mayor Bobby Dyer opened the special session by listing the meeting's purpose: to take public input on the FY2026-27 operating budget and capital improvement program and to hear comment on a slate of proposed debt authorizations and fee changes, including bonds and possible water, sewer and stormwater revenue measures. After public comment concluded, Dyer thanked attendees and said, "We hear you." The transcript contains no council vote or formal action on the meals tax during the session.

What happens next: speakers asked council either to hold the meals tax steady and pursue a phased reduction to 3.5% or to consider immediate relief such as eliminating the tax. The transcript does not record any council decision, formal motion, or staff directive in response to tonight's comments.