Elections have consequences and in Virginia those consequences will cut deeply into your pocket book.
There are at least 16 bills approved by the 2020 General Assembly which create new taxes or raise existing taxes.
If anybody would or could run the fiscal projections on these 16 tax bills, they might combine into a major tax hike comparable to those in 2004 and 2013. Over five years this will cost families or businesses multiple billions of dollars, but most will be collected by wholesalers (cigarettes and fuel) or too deeply buried on receipts to see. And don’t forget that all those taxes on businesses will be passed down to consumers.
The Budget Bill, which includes an increase in the state tax on cigarettes and other tobacco products, also creates a new tax on nicotine vaping products. The initial revenue estimate was $119 million in fiscal year 2021 and $130 million in fiscal year 2022.
House Bill 1414, raised the statewide tax on gasoline and diesel by five cents per gallon on July 1 of this year and then against July 1, 2021. The bill also imposes an additional 7.6 cents per gallon to be collected in all the state’s localities not otherwise covered by a regional transportation tax. All of this means that your gas tax will increase from 16 cents per gallon to just under 34 centers a gallon in the next 16 months.
Consumers will actually be paying the tax twice – once when you fill your vehicle and again when businesses pass the increase along to you in the form of higher costs on goods and services.
An additional grantors tax on Northern Virginia real estate transactions was created and while no revenue total has yet been provided, it is likely $300 million or more just in the next year and close to $400 million in the following year.
House Bill 785 gave all counties the legal right to collect four taxes that were previously allowed only to cities. If your county exercises the options, Virginians could be paying an additional $500 million in taxes by 2022. Most of that would come from taxes on restaurant meals and prepared foods.
House Bill 534 will allow any Virginia locality to impose a five cent tax on plastic bag at retailers. It is time to start demanding paper.
Senate Bill 851, the clean energy omnibus, imposes the state’s first carbon tax on electric power generation, collecting perhaps $150 million or more in 2021. By 2021 your electric bill will also include a tax to fund a new low-income benefit program, the Percentage of Income Payment Plan, which will cap bills for those on public assistance. That is likely to be another $200-250 million per year, only for customers of the two largest providers.
House Bill 4 authorized five casinos in Virginia, if approved by local referenda, and sets the tax rates on their gross receipts at from 18 to 30%, depending on the amount. It will be shared with the host localities.
Senate Bill 735 created a new regulatory structure and tax for the peer-to-peer vehicle sharing business, a growing Internet-based alternative to traditional auto rental (already taxed).
House Bill 1428 created a new state health benefits exchange and funds its operation with an assessment on health insurers, similar to the hospital provider assessments previously used to fund the 2018 Medicaid expansion. The assessment is expected to collect about $3 million next year but more than $50 million annually once the exchange is fully operational.
House Bill 1145 imposed an increase in the state’s small litter tax on retailers and the beverage industry.
House Bill 129 increases the gross receipts taxes paid by public service companies to fund the State Corporation Commission’s operations. No revenue estimate was provided.
House Bill 1541 created a Central Virginia Transportation District in the Richmond region, copying similar special taxing regions for Hampton Roads and Northern Virginia. Richmond area residents and businesses will pay an additional 0.7% on the sales and use tax and the 7.6 cent regional fuel tax. The taxes will raise $179 million next year and $198 million the following year.
House Bill 1726 created a regional transient occupancy tax and grantors tax on deeds in the Hampton Roads Region to provide an additional $25 million per year for mass transit operations.
Another four tax bills allow an additional 1% local sales taxes dedicated to school construction. This is a pattern likely to spread in future sessions unless some other school constructing funding sources is identified.
Source: Sixteen Tax Hike Bills Approved by the General Assembly, by Stephen D. Haner, Jefferson Policy Center