Board of Supervisors to hold a hearing on a proposed meals tax
The Fairfax County Board of Supervisors agreed on March 18 to authorize a public hearing on a meals tax.
The hearing, scheduled for April 22, would consider an amendment to the Fairfax County Code to impose a food and beverage tax of up to 6 percent on meals sold by restaurants and caterers.
If the tax is approved by the Board of Supervisors, it would take effect on Jan. 1, 2026.
Also on March 18, the board authorized the advertisement of a 15-cent increase in the property tax rate, for a total of $1.14 per $100 of assessed value. Real estate assessments, meanwhile, are up an average of average of 6.65 percent.
The county estimates a 6 percent meals tax would generate $101.8 million, and a 4 percent tax would generate $67.9 million. The cost to implement the tax would be about $2.8 million.
Related story: Supervisors consider a meals tax
“The implementation of a food and beverage tax would enable the county to better align its tax base with surrounding jurisdictions and would generate a significant portion of revenue from non-county residents,” states a description of the proposal by county staff.
Arlington County, Prince William County, the City of Fairfax, and the City of Falls Church have a 4 percent meals tax. The City of Alexandria’s is 5 percent. The meals tax is 3.75 percent in the Town of Herndon and 3 percent in the Town of Vienna.
According to county staff, “A food and beverage tax would provide an opportunity to diversify the tax base and moderate the impact of the increasing share of the tax burden on homeowners.” Approximately 34 percent of expenditures on meals are generated by commuters and out-of-county visitors.
“While taxes on unprepared food items are generally considered to be regressive since lower-income households tend to spend larger fractions of their incomes on necessities such as food and clothing, restaurant meals are not considered necessities,” the proposal states. “Higher-income households tend to spend a larger share of their food budget on eating out.”
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The food and beverage tax would not apply to items sold through vending machines; prepackaged items; eligible fundraisers; or food and beverages sold by volunteer fire departments, nonprofit religious facilities, schools, hospitals, or nursing homes.
The proposed amendment would allow a discount of up to 3 percent for restaurants to offset their administrative costs for the first two years. “The dealer discount would compensate sellers for the technology and record-keeping costs of collecting the food and beverage tax.”
If the tax is approved, the county would provide technical assistance to business owners and would translate information about the tax into multiple languages.
