Prince William County officials are developing an ordinance that would implement a tax on plastic bags.
County Executive Chris Martino told the County Board of Supervisors at its meeting on Tuesday that officials plan to present additional information about such a tax at the April 6 board meeting.
Several residents have urged the county to implement a bag tax in recent months and use the proceeds to fund staff positions focused on sustainability and the fight against climate change.
Martino said the county likely wouldn’t be able to create the infrastructure to implement the tax rate in conjunction with the city’s budget. financial year 2022which begins July 1. He said the tax could be approved after the budget.
The Virginia General Assembly legislation approved in 2020 allowing localities to impose a 5-cent tax on disposable plastic bags in grocery stores, convenience stores and pharmacies, with some exceptions.
State code requires retailers to collect tax proceeds in the same manner as sales and meal taxes. Until December 31, 2022, retailers can keep 2 cents of the tax collected from each bag, with retailers’ share dropping to 1 cent as of January 1, 2023.
Revenue from these taxes must be directed to specific activities such as environmental cleanup, pollution mitigation, and providing reusable bags to people receiving federal food support programs, according to a staff report to the Fairfax County Board of Supervisors prepared by Fairfax County Executive Bryan Hill.
The Virginia Department of Taxation has created a tax impact statement with legislation that the tax could generate between $20.8 million and $24.9 million in revenue statewide based on similar taxes in Montgomery County, Maryland, and Washington, DC
Hill’s report said Montgomery County, which has a population of about 1 million, received about $2.61 million in revenue in 2017. Hill’s report noted that revenue would decline over time as that customers would start using reusable bags, although it will take several years. He wrote that it would be difficult to estimate potential revenue because Virginia’s law only applies to certain retailers while Montgomery County’s applies to virtually everyone and lacks certain exemptions.
Martin has proposed a budget of $1.35 billion for fiscal 2022, as well as a six-year, $1.02 billion capital improvement program. The capital program includes $224.8 million for the next fiscal year.
The budget already comes with a potential 7% increase in property tax bills for county homeowners because, while the tax rate is not proposed to increase, higher assessments will drive up bills.
The real estate rate was announced at $1.125 per $100 of assessed value, but rising property values are expected to increase the average homeowner’s tax bill by $306, according to county staff.
The budget proposal says residential real estate values rose an average of 7%, while commercial real estate values fell an average of 4.5%. The increase in assessments would result in an effective increase in taxes for residential properties, but a decrease for commercial properties.
The spending plan calls for a tax of $1.60 per $100 of value on business computers and peripheral equipment, an increase of 25 cents from the current rate. This fee applies primarily to data centers.
The proposal also includes a 30-cent-per-pack tax on cigarettes, which would be a new tax estimated to generate $3 million in revenue.