Both the House and Senate have struggled throughout the session to develop consensus proposals to impose taxes on plastic bags provided by retailers. Areas of dispute include whether the tax should be levied statewide or on a regional basis, whether taxes should be imposed by the state or by localities, and the use of the revenues generated. Two House bills are now before the Senate Finance and Appropriations Committee, and a Senate bill has been referred to the House Finance Committee.
HB 534 (Carr) would impose a five-cent fee on disposable plastic bags, collected by the state Tax Commissioner, beginning July 1, 2021. Certain bags, such as those provided to transport newspapers, dry cleaning, or certain meat or dairy products, would be exempt from the fee. Retailers would be allowed to retain one cent of the five-cent fee, and the remaining revenues would be divided between the Water Quality Improvement Fund and the Litter Control and Recycling Fund. This bill narrowly passed the House (52-46) after initially failing on the House floor by one vote.
HB 1151 (Lopez) would authorize localities to impose a five-cent tax on each disposable plastic bag (the same exemptions as in HB 534 would apply), beginning July 1, 2020. The Tax Commissioner would collect the tax. Retailers would be authorized to retain one cent of the tax, and the remaining revenues, after the Department of Taxation recouped its expenses for administering the tax, would be divided between the Water Quality Improvement Fund and the Natural Resources Commitment Fund. This bill also passed narrowly (50-46).
SB 11 (Ebbin), as amended on the Senate floor, would establish a bifurcated system: in Planning District Eight, the state would impose a five-cent tax on each plastic bag, which would be collected by each locality, and in the rest of the state, the tax would be imposed by local ordinance and collected locally. All revenues collected by localities would be directed to environmental purposes, such as education programs or litter mitigation. The same exemptions for certain plastic bags used for certain purposes, as in the other bills, would apply. Beginning July 1, 2021, and ending July 1, 2023, retailers would be allowed to retain two cents per bag, but would be required to use half of this amount to promote the use of reusable bags; after that time, retailers would be allowed to retain one cent, but without restriction on the use of those funds. The bill would take effect July 1, 2021. A floor version passed 26-14 after the Senate Finance and Appropriations version (which imposed the tax statewide) failed, with the Lieutenant Governor casting the tie-breaking vote against the bill.
VACo Contact: Katie Boyle