For Immediate Release
Date: April 24, 2017
Contact: Ofirah Yheskel, firstname.lastname@example.org
RELEASE: Northam Calls For A Phase Out Of The State Grocery Sales Tax On Low-Income Virginians
Richmond, VA – Today, Lt. Governor Northam called for phasing out the regressive nature of the state grocery sales tax in Virginia. The Lieutenant Governor is calling for this change in policy as part of a broader look at tax reform in the commonwealth. He is committed to bringing together a tax reform commission that makes Virginia’s tax code simpler, fairer, more progressive and fiscally responsible. He believes tax reform should expand purchasing power for working families and allow Virginia to make smart investments in quality education and effective worker training.
The sales tax on groceries has been found to disproportionately hurt the poor. Virginia is one of the few states that only partially exempts food for home consumption. The existing partial exemption provides households with enough annual savings to buy an additional nine days of groceries. By ending the regressive nature of the state sales tax on groceries, working families will have more purchasing power for essential items.
Ending the regressive nature of the state sales tax on groceries can be accomplished in several ways, and is part of a broader set of guiding principles on tax reform to be looked at by an appointed commission on comprehensive tax reform. The larger set of principles will be forthcoming from the campaign later this week.
Communications Director David Turner issued the following statement on the proposal:
“Virginia has long talked about comprehensive reform of its tax structure to make it simpler, fairer and more equitable for every Virginian–no matter who they are or where they live. In order to continue making progress, Ralph wants to phase out the regressive impact of the state sales tax on groceries on low-income Virginians. This regressive, unfair tax hits working families the hardest, and they can afford it the least. Now is the time for real comprehensive tax reform that helps Virginia families who need it the most. Just like his lobbyist friends on K Street, Ed Gillespie wants to cut taxes for millionaires and billionaires instead of helping families who need real relief. Ralph Northam’s plan will help working and middle class Virginia families who are feeling squeezed.”
Virginia Assesses A 2.5 Percent Tax On Food Purchased For Home Consumption. “Food purchased for home consumption is taxed at the reduced rate of 2.5% (1.5% state, 1% local). […] Food purchased for home consumption includes most staple grocery food items and cold prepared foods packaged for home consumption (Food Stamp Act of 1997, 7 U.S.C. § 2012.) Specifically excluded from this are alcoholic beverages, tobacco, and prepared hot foods sold for immediate consumption on and off the premises. The reduced sales and use tax rate also does not apply to seeds and plants that produce food for human consumption.” [Tax.Virginia.Gov, Accessed 4/24/17]
- Taxes On The Sale Of Groceries “Disproportionately Hurt The Poor.” “Thirteen states and many localities continue to tax the sale of groceries, even though the taxes disproportionately hurt the poor and may affect the quality, variety and even the amount of food they can afford to put on the table. […] Alabama, Hawaii, Idaho, Kansas, Mississippi, Oklahoma and South Dakota tax groceries at the same rate as the sales tax on all purchases, according to the Tax Foundation. Arkansas, Illinois, Missouri, Tennessee, Virginia and Utah tax food at a lower rate. Seven fewer states tax groceries than in 1998, when researchers at the Center for Budget and Policy Priorities found that 20 did. But the trend to eliminate the tax has stalled.” [Pew Charitable Trusts, 8/16/16]
- JLARC: “Virginia Is One Of The Few States That Only Partially Exempts Food.” “Virginia is one of the few states that only partially exempts food, as most states fully exempt food for home consumption.” [JLARC, January 2012]
- JLARC: The Majority Of States (31 States And D.C.) Fully Exempt Food.” [JLARC, January 2012]
- The Existing Partial Exemption On Groceries “Provided Households… With Enough Annual Savings To Purchase An Additional Nine Days Of Groceries.” “Although average reductions in tax liability are relatively low for consumers, this reduction appears to be a meaningful amount because it allows them to purchase additional quantities of needed goods. For example, the partial exemption for food provided households in Virginia with enough annual savings to purchase an additional nine days of groceries in 2008.” [JLARC, January 2012]