2024 Budget Recap

Thanks to the work of a Special Session on Monday, May 13, the Virginia General Assembly has now passed a final Budget, which the Governor has signed. The results are a mixed bag, but the avoidance of a government shutdown is a relief to us all.

Contrary to concerns, the Budget does not include a digital sales tax, which is great news for our industries. The tax would have been levied on all digital goods and services, to include software licenses and memberships like Spotify or Netflix. The idea had been part of the comprehensive tax shake-up proposed by the Governor, to be included with income tax cuts and a sales tax increase. The digital sales tax alone, extended beyond end-users into business-to-business transactions was included on the original Conference Report Budget that he initially amended. Happily, optimistic revenue projections continue to roll in for the Commonwealth, and it became unnecessary to impose additional taxes at this time.

Despite opposition from VRLTA, and consistent advocacy from our members, the Virginia General Assembly has chosen to move up the Commonwealth’s polystyrene container ban. This means that starting July 1, 2025, any restaurant operator with more than 20 locations will be banned from using polystyrene containers, to be followed on July 1, 2026, by any restaurant operator whatsoever.

This is obviously not an ideal outcome for our members, and will add one more significant cost increase to all of the others that restaurateurs are weathering right now. There will be another opportunity to advocate for a further delay in the 2025 Regular Session of the Virginia General Assembly. The make-up of the legislature will be identical to today’s, however, and absent any big development to change those votes, an extension is not likely.

The version of the Budget that has passed does still include G3 last-dollar tuition grant eligibility for Virginia Community College students in either culinary or hospitality management programs, which will be a great boon to the metaphorical pipeline that connects smart young talent to our industries.  We know that a sustainable pool of young professionals is vital to the development and growth of the restaurant, hotel lodging, attraction, campground, and tourism industries in the Commonwealth.
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Please do not hesitate to reach out to VRLTA Director of Government Affairs Tommy Herbert at [email protected] or (804) 761-3235 if you have questions about this development.