Members of House Finance Committee’s Subcommittee #3 heard several bills on January 31 relating to litter tax, which is levied on manufacturers, wholesalers, distributors, and retailers of certain products, including groceries, soft drinks, beer, wine, and paper products, at the rate of $10 per year per business location. An additional $15 is levied on each location that manufactures, sells, or distributes groceries, soft drinks, or beer. Along with an excise tax on soft drinks and a portion of an excise tax on beer and wine coolers, funds from the litter tax are deposited into the Litter Control and Recycling Trust Fund, which is used to provide grants to localities for litter prevention and recycling programs.
According to the Department of Environmental Quality, the litter tax generated $664,102 in FY 2019 for the Fund, and the three revenue sources for the Fund collectively generated $1.7 million. In FY 2018, localities matched approximately $1.8 million in Fund revenues with more than $22 million in other sources of funding and in-kind contributions.
The subcommittee recommended advancing HB 1154 (Lopez), which would increase the annual litter tax from $10 to $20 and the additional tax from $15 to $30 per year. HB 502 (Krizek), which adds a $100 penalty for litter tax delinquency, will likely be incorporated into HB 1154 in full committee.
After advancing the other bills, the subcommittee tabled HB 302 (McNamara), which would have repealed the tax. The patron explained his view that the administration of this tax was burdensome for businesses relative to the amount of funding it generated. VACo opposed the bill, as it would have eliminated a local revenue source without replacing it.
VACo Contact: Katie Boyle