New Laws Change Taxes

New Laws Change Taxes

Cost of groceries goes down; cigarette prices up.

People buying groceries and cigarettes this weekend may have noticed a change in their bill. Their grocery bill has gone down, while the cost of cigarettes has gone up. This is due to a Virginia law that went into effect Friday, July 1.

The food tax, which has been at four percent in recent years, was reduced by one and a half percent, completely eliminating the state’s General Fund portion. Still in place is the one-percent dedicated to education and distributed by school age population, a one-percent Fairfax County local option and a half-percent that goes into the Transportation Trust Fund.

“The food tax reduction was initially supposed to take place over three years as passed in the 2004 General Assembly’s budget reform package,” said Del. Mark Sickles (D-43), who was an original co-patron with Gov. Mark Warner on the bill. “I was very pleased to help carry this bill that will provide tax relief to everyone, but will be especially helpful to those individuals struggling to get by in a high cost area like the Washington Metropolitan region. I see no better way to use the excess revenue we’ve experienced from our burgeoning economy than for core necessities like transportation, restocking the rainy day fund, and reducing this regressive tax.”

Del. Kristen J. Amundson (D-44), who appeared last week at Giant Supermarket in Beacon Mall with House Democratic Caucus chairman Del. Brian J. Moran, said, “They were supposed to phase it in, but the economy allowed us to speed it up.”

“Thanks to our leadership in passing budget reform last year, we were able to cut taxes for people who need it most including seniors and working families,” Moran said. “These delegates and candidates want to keep Virginia on the right track we began under Governor Warner — the track of fiscal discipline that will allow us to improve our schools, fix the transportation crisis, and improve public safety.”

Amundson said, “We targeted tax relief to the people who need it most — families and seniors on fixed income.”

State Sen. Linda “Toddy” Puller (D-36) said that she wishes they could have taken the whole tax away, but the rest goes back to the locality and is also used for schools and transportation.

Regarding the increase in cigarette taxes, Puller said that she hasn’t heard from any business owners complaining about the tax increase. The bigger increase occurred last September when the cigarette tax was raised from 2.5 cents to 20 cents. This most recent increase took it to 30 cents.

“If you don’t smoke you don’t pay anymore.” Puller said. “It’s wonderful that we’re finally able to take away the most regressive tax, the one that hurts poor people the most. People have tried for 30 years to get rid of it, and it always failed.”

“This is what delegates should be fighting for,” Moran said. “This is all a result of what we did last year.”