Roanoke, Virginia – “It’s exciting to see things now coming to fruition that we talked about two years ago,” Gov. Glenn Youngkin said today during a speech in which he confirmed that Virginia is cutting the 1.5% grocery tax starting January 1. “This is what Virginians elected us to do is to deliver on promises made,” he added.
In the New Year, Virginia residents will no longer have a 1.5% grocery tax added to their bills when grocery shopping in supermarkets. This comes as a relief to millions at a time when the economy is headed into a recession driven by the FDA’s aggressive interest rate hike, a decision prompted by the sky-high inflation and rising prices on almost everything this year. For Virginia residents, the tax cut means they will now save $1.5 for every $100 spent on groceries.
According to Youngkin, the tax cut is part of the state’s leadership’s long-term policy to cut and lower current taxes and help residents throughout the state in these difficult times. Gov. Youngkin has also spoken about the grocery tax cut since the beginning of his campaign. However, the state’s most recent decision is not mandatory, as local governments will still have the option to impose a 1% grocery tax if they would like too.
In recent years, Virginia has been considered one of the best states for doing business. In 2019 and 2021, Virginia was named the top state for doing business among all other states, per the CNBC annual ranking. This year, Virginia dropped to the third place behind North Carolina and Washington state. Gov. Glenn Youngkin wants Virginia as high on this list as possible because these kinds of rankings are important when companies decide whether to invest in a specific state or not.
That’s why Youngkin encourages local governments to take their tax structure into consideration and do everything in their power not to impose a grocery tax if possible. Such a decision would not only help residents but also make those areas more attractive for out-of-state companies to start operations there and boost the state’s economy. Not only businesses, but cutting the grocery tax will also make Virginia more attractive for out-of-state Americans who think of moving permanently.
“I think the layering of sales tax, of grocery taxes, of food taxes on top of property taxes, car taxes and real estate taxes is really a tough thing for Virginians. Remember, businesses and people make a decision on ‘where I want to live’. And we are now turning the tide in getting people and businesses to stay in Virginia, but we’re going to need some help from the localities as well,” Youngkin said Wednesday.
Local governments will have to decide by the end of this week whether they will follow the state’s steps in cutting grocery taxes starting January 1. Local governments can also discuss the matter and decide in the new year, meaning that a potential tax cut will take effect at a later date.