Though rejected by Fairfax voters twice, the Fairfax County Board of Supervisors approved the new tax during Budget Mark-Up, while including the discount to help offset the cost to merchants.
FAIRFAX – The Virginia Restaurant Lodging and Travel Association (VRLTA) notes that the Fairfax County Board of Supervisors has officially approved the institution of a county-wide tax on all prepared food and beverage at a rate of 4%. This is in addition to the existing 6% sales tax. The Board did include a dealer discount for remittances of the food tax at a rate of 3%, which will help blunt the cost to merchants of collecting and remitting the funds to the County.
“We were proud to support the efforts to advocate against this tax, which we see as dangerous to the restaurant industry and costly for consumers,” says Eric Terry, President of the VRLTA. “But we are grateful that the Fairfax County Board of Supervisors did see fit to include a dealer’s discount in the ordinance that will ease the burden on restaurants to remit these taxes.”
A “dealer discount,” is a small percentage discount offered by the local government to the businesses that are actually remitting the tax money as a way to offset the cost of electronic interchange fees which apply to all electronic transactions. This helps lower the cost incurred to the restaurant of collecting and remitting the tax.
The meals tax hike wasn’t approved without opposition. On April 22nd, alongside a coalition of Fairfax restaurateurs, VRLTA members spoke in opposition to the proposed tax at the designated public hearing hosted by the Board at the County Government Center. Stakeholders laid out a clear case against the tax, which falls first and foremost upon locals and has the greatest impact upon low-income households.
Around the same time that the Fairfax County Board of Supervisors is instituting a countywide meals tax, just across the county line in Prince William the Board of County Supervisors has voted to reduce their recently-instituted meals tax from 4% to 3%.
These taxes come at an especially inopportune time for restaurants, which are weathering a perfect storm of rising costs alongside flagging consumer sentiment in the face of an uncertain economic future. When household budgets are cut, eating out is often one of the first line-items to go.
“We will continue to advocate against these single-industry taxes wherever they are proposed,” says Terry. “And we would still urge the Board to consider other revenue options that are less harmful to our members and County residents.”
Fairfax voters rejected the tax in a 2016 ballot initiative, and before that in a similar initiative in 2005. The Virginia General Assembly, however, has since removed the requirement for such tax increases to first be vetted by the voters, making a simple majority Board vote the only obstacle between Fairfax diners and this unwelcome addition to their bills.
Fairfax also raised their Transient Occupancy Tax by 2%, with 1% of that going to Visit Fairfax to promote tourism, and 1% going to the General Fund.