Multiple bills have been introduced during the General Assembly session aimed at raising revenues for transit and other public transportation purposes. VACo expected bills that address transit funding to be filed this year as the Northern Virginia Growing Needs of Public Transit Joint Subcommittee (SJ 28) formally transmitted its recommendations to legislators in November 2025. All the bills introduced so far vary but generally raise certain taxes and fees and dedicate them for transit and public transportation purposes.
HB900 (Sullivan) would decrease the statewide retail sales and use tax from 4.3 percent to 4 percent and expand such tax to taxable services and digital personal property beginning on January 1, 2027.
Furthermore, the bill imposes additional retail sales and use tax in any county or city:
- That is a member of the Northern Virginia Transportation Commission (NVTC) at the rate of 0.385 percent
- That is embraced by the Northern Virginia Transportation Authority but that is not a member of the Northern Virginia Transportation Commission at the rate of 0.615 percent
- That is a member of the Potomac and Rappahannock Transportation Commission (PRTC) at the rate of 0.2 percent
The bill would also impose a retail delivery fee in the amount of 20 cents upon each retail delivery made in any county or city located within the Northern Virginia Transportation District. Lastly, the bill would impose a regional highway use fee on all vehicles in the Commonwealth that are subject to the existing highway use fee. This additional fee would be 29.34 percent of the amount of the current highway use fee assessed. This regional highway use fee would, depending on where a vehicle is garaged, be allocated to the proposed Northern Virginia Transportation District Regional Fund, Potomac and Rappahannock Transportation Commission Regional Fund or the existing Commonwealth Transportation Fund.
HB 900 would have the funds generated from these various proposals be deposited in the Northern Virginia Transportation District Regional Fund and the Potomac and Rappahannock Transportation Commission Regional Fund. These two funds would then be used to benefit public transportation efforts in the NVTC and PRTC regions through supporting the Washington Metro Area Transit Authority (WMATA), Virginia Railway Express and local transit agencies.
HB 1179 (Tran) and SB 638 (Ebbin) are similar bill to HB 990 in that it would create the Northern Virginia Transportation District Regional Fund and the Potomac and Rappahannock Transportation Commission Regional Fund along with imposing various taxes with the revenue generated being put toward public transportation purposes.
As we saw with HB 990 and SB 603, HB 1179 would create a regional highway use fee in addition to the highway use fee already assessed. The regional fee would be 29.34% of the amount of the current highway use fee assessed. This regional highway use fee would, depending on where a vehicle is garaged, be allocated to the Northern Virginia Transportation District Regional Fund, Potomac and Rappahannock Transportation Commission Regional Fund or the Commonwealth Transportation Fund.
HB 1179 would impose an additional retail sales tax of 0.2 percent in any locality that is a member of the Northern Virginia Transportation Commission or the Potomac and Rappahannock Transportation Commission. The revenue generated and collected from this additional retail sales tax would be deposited in the Northern Virginia Transportation District Regional Fund for revenue from any county or city that is a member of the Northern Virginia Transportation Commission or the Potomac and Rappahannock Transportation Commission Regional Fund for revenue from any county or city that is a member of the Potomac and Rappahannock Transportation Commission.
This bill would also impose a transportation network companies tax. A transportation network company (TNC) is a person who provides prearranged rides using a digital platform that connects passengers with TNC partners. Common examples are Lyft and Uber. The transportation network companies tax would be levied at a rate of 4.3 percent statewide and at an additional 1.9 percent within localities that are members of the Northern Virginia Transportation Commission. Revenues generated from the statewide portion of the tax would be deposited into the Commonwealth Mass Transit Fund (CMTF), which supports all public transit agencies across Virginia. Revenues generated from the additional northern Virginia specific portion of the tax would be deposited in the Northern Virginia Transportation District Regional Fund.
This legislation would also impose a retail delivery fee of 50 cents per retail delivery made in the Commonwealth. In addition to the 50 cents fee, retail deliveries made in any county or city that is a member of the NVTC will be charged an extra 25 cents. The revenue generated from the statewide fee would be deposited in the CMTF while the NVTC portion of the fee would be deposited into the Northern Virginia Transportation District Regional Fund.
Lastly, this bill would impose a regional commercial parking tax in any locality that is a member of the NVTC. The regional commercial parking tax would be 10% of the gross receipts for parking or storing motor vehicles or trailers in a public commercial parking lot. There are some exclusions to this tax and all revenue generated is to be deposited in the Northern Virginia Transportation District Regional Fund.
HB 978 Watts would expand the retail sales and use tax to many services not previously covered. The bill also imposes the retail sales and use tax on digital personal property.
Revenues generated by the taxes levied on services and digital personal property shall be allocated in the same manner as other sales and use taxes; however, revenues from the state portion of the sales and use tax that would be allocated to the general fund shall instead be allocated as follows:
- Revenue generated by the imposition of such tax on delivery services in the Northern Virginia Transportation District shall be distributed to the Washington Metropolitan Area Transit Authority
- All other revenues generated by the imposition of such tax on delivery services shall be distributed to the Commonwealth Transportation Fund.
- Of the remaining revenues raised, 60 percent shall be distributed to localities on the basis of school-age population and 40 percent shall be distributed to localities on the basis of the high-need student population in the locality.
The bill clarifies that a high-need student population includes students who are:
- Automatically certified for free school meals because of participation in social services programs
- Participants in a program of special education, or
- English language learners.
The bill provides certain exemptions to the sales and use tax on services.
Finally, the bill exempts food purchased for human consumption and essential personal hygiene products from all state, local, and regional sales taxes on and after July 1, 2026.
VACo staff will continue to monitor and track these bills as they are heard and will be sure to provide updates when applicable. VACo staff believes these bills and their contents will be folded into one larger transportation funding bill at some point during the Session. VACo remains dedicated to advocating for transportation funding policies that empower counties to address their evolving infrastructure needs effectively and to foster economic development.
VACo Contact: James Hutzler