The House of Delegates Finance Committee advanced a bill to eliminate Virginia’s grocery tax and a bill to double the standard deduction on income tax; those are two key promises Governor Glenn Youngkin made in his campaign as part of his focus on “kitchen-table issues.”
HB 90, sponsored by Delegate Joe McNamara (R-Roanoke) exempts food for human consumption and essential personal hygiene items from state and local sales taxes. On Monday, Delegates Candi Mundon King (D-Prince William) and Delegate Richard “Rip” Sullivan (D-Fairfax) expressed concern about how a different Youngkin-inspired tax bill would impact low-income Virginians. McNamara recalled those remarks in the Wednesday committee meeting.
“I know just a few days ago, you had a question and had concern about whether our tax policy was helping families, low-income families. Well, I’m here to tell you that this bill helps low-income families. I cannot think of another tax that is more regressive-oriented,” McNamara said. “Our sitting governor has made it his number-one pillar in his Day One agenda. So I’m telling you, join me. We can become the 38th state to not tax groceries.”
Legislators on the committee worried that eliminating the tax would harm localities which use the tax as a source for school funding. McNamara said that his bill includes a supplemental payment from Virginia’s General Fund to make sure localities don’t feel the cut.
The committee also advanced McNamara’s HB 472 which increases the standard income tax deduction, starting in the tax year 2022, from $4,500 to $9,000 for individual payers, and from $9,000 to $18,000 for joint filers.
“HB 472 is, if I might suggest to Delegate Mundon King, this was designed with your concerns in mind,” McNamara said. “Literally, this proposal will give about 65 percent of the dollars back to taxpayers below $100,00 of income, so again, it’s really getting that lower level of taxpayer in our marketplace.”
McNamara cited the revenue surplus Virginia had in 2021 as evidence that Virginia can afford to increase the deduction.
“The revenues are there, I think it’s time we go and take care of really the lower-income taxpayers,” he said.
Delegate Vivian Watts (D-Annadale) said she would support the bill if it was part of comprehensive tax reform. But she said the standard deduction change would cost close to $1 billion a year, and cited a need to increase wages paid to state law enforcement and teachers as things that will require increased revenue.
“We cannot afford to continue down this path,” she said. “It has been decades since we had meaningful tax reform.”
Both HB 90 and HB 472 are now headed to the appropriations committee.
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