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Commonwealth's Counties

Broad equal taxing authority measure defeated; cigarette tax study continued

SB 1127 (Favola), legislation introduced at VACo’s request, was heard in the Senate Finance Committee on January 23.  The bill would have equalized taxing authority between counties and cities and towns, effective July 1, 2020.  In the intervening time, a work group convened under the auspices of the Division of Legislative Services would determine any Code changes necessary to implement the provisions of the bill.  The delay was intended to ensure that no special taxing authority provided to individual localities in the Code was accidentally overridden.

Senator Barbara Favola encouraged the Senate Finance Committee to view the bill as a question of fundamental fairness, and also as a way for counties to reduce their reliance on property taxes to generate revenues.  VACo testified in favor of the bill, pointing out that residents’ expectations of service delivery from local governments have evolved over time and that counties need revenue options to provide these services.  Fairfax County also spoke in favor of the bill.  After testimony by representatives from the restaurant and retail industries and the Virginia Farm Bureau in opposition, the bill was passed by indefinitely.  HB 2189 (Kilgore), which contains the same provisions as SB 1127 and was also introduced at VACo’s request, has been assigned to the House Counties, Cities, and Towns Committee’s Subcommittee #2, and has not yet been heard.

SB 1371 (Norment) creates new definitions for alternative nicotine products to address “vaping,” and, of particular interest to local governments, extends by one year the study directed in the 2018 Appropriations Act of “possible reforms to the taxation of tobacco products that will provide fairness and equity for all local governments and also ensure stable tax revenues for the Commonwealth.”  This study is to be conducted by the Joint Subcommittee to Evaluate Tax Preferences and presents another avenue for counties to advocate for parity in options for generating necessary revenues.

VACo Contact:  Katie Boyle

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