Fairfax Co. Again Sees Dining Tax as Path to Additional Revenue

Supporters say a meals tax would provide additional funding for schools and other county needs. But critics argue the plan unfairly targets one area and could cause residents to dine out less often.

Lawmakers in Fairfax County, Virginia, are once again exploring the possibility of a meals tax as an option to create an additional revenue stream.

At a Board of Supervisors meeting Tuesday, lawmakers voted 9-1 to direct County Executive Bryan Hill to examine the pros and cons of adopting a meals tax. It would vary between 1% and 6% and would apply to food and drinks prepared in restaurants and grocery stores.

The vote comes weeks after the board approved a fiscal 2025 budget that includes a three-cent residential tax rate increase. Residents face an average property tax increase of about $450, and lawmakers are always looking for new sources of revenue.

Several surrounding jurisdictions have a meal tax, and supporters say it will provide additional funding for schools and other county needs. But critics argue the plan unfairly targets one area and could cause residents to dine out less often.

“It’s just one of those tools that I think we need to look at right now to understand the cost and the benefits,” Supervisor Dalia Palchik said. “We cannot continue to rely so much on our property taxes. »

Fairfax County voters have twice rejected the idea of a meals tax. Most recently, in 2016, a 4% tax on prepared foods at deli counters, restaurants and convenience stores was not passed. However, a Virginia state law passed in 2020 allows jurisdictions to implement a meal tax without feedback from voters.

“Nowhere does it say that the board approves a meal tax in this resolution,” Chairman Jeff McKay said. “The only thing it does is ask us to get data.”

Although the board isn’t expected to learn about the positives and negatives of the idea until September, some are concerned about the impact the plan could have on restaurants.

Gary Cohen, executive vice president of government affairs and franchises at Glory Days Grill, said the consequences of a dining tax could be significant because many people are already eating out less often.

“I know a lot of families who used to eat out six times a month now only eat out three times a month,” Cohen said. “This may be precisely what encourages them not to eat in restaurants at all. In particular, low-income families are the ones who can least afford a new tax at this time.”

The potential dining tax, Cohen said, makes it seem “like they’re trying to solve all their financial problems on the backs of restaurants.”

“You can’t stop paying your property tax or you’re going to get kicked out of your house,” Cohen said. “But it’s very easy for people to stop eating out, and if they don’t stop, they will definitely cut back on their spending, and that’s my biggest fear.”

Supervisor Pat Herrity, the only local lawmaker to vote against exploring the possibility of a meal tax, said at this week’s meeting that the board should review its own spending before add a new tax.

The county will continue to advocate for additional state and federal funding, but Palchik said leaders “need to find ways that go beyond our property taxes to be able to fund our very important services in the county.”

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