Northam proposes to reduce Virginia grocery tax and income tax


Virginia Governor Ralph Northam is proposing tax cuts that would cut state revenues by $ 2.1 billion.

Virginia Governor Ralph Northam is proposing tax cuts that would cut state revenues by $ 2.1 billion.

Northam announced plans to cut taxes in Richmond on Tuesday. He said it would benefit workers, especially those who struggled during the pandemic.

“Some jobs just can’t be moved online – restaurant workers, early childhood educators, home care workers and the like – and we all depend on the people who do that work. Virginia can help workers by eliminating the state tax on groceries, offering one-time discounts and giving tax relief to working people, ”Northam said in a press release from the governor’s office.

Northam offers four tax cuts:

  • Elimination of the state sales tax on groceries, which is currently 1.5%. Most states do not tax groceries.
  • By reducing the income tax for working families, the proposal would refund up to 15% of the federal earned income tax credit to people earning less than a certain income from their work.
  • Unique “economic growth discounts” for anyone filing Virginia state income taxes: $ 250 for individuals and $ 500 for married couples. The last time Virginia offered discounts was in 2019, $ 110 for individuals and $ 220 for married couples.
  • End “fast-track sales tax” payments for retailers, which began in 2008 and required retailers to prepay sales tax to the state before revenue was collected.

“Virginia has been named the Best State for Business for three years in a row and we have a remarkably strong economy, but not everyone benefits equally,” Del said. Lamont Bagby, Chair of the Legislative Black Caucus, in the press release. “This tax plan focuses on Virginians who need help and who have largely not benefited from our strong economy. This is the right way to help workers and to ensure fairness in our tax policy.

In an emailed statement, Gov.-elect Glenn Youngkin’s transition assistant Macaulay Porter said: and by eliminating the grocery tax for all Virginians as part of his day one game plan, the Virginians across the Commonwealth have adopted these ideals overwhelmingly. Governor Northam’s budget proposal is a step in the right direction but does not fully fulfill the Virginians’ mandate.

We appreciate that the Northam administration laid the groundwork for these elements of the Day 1 game plan so that Governor-elect Youngkin can begin on January 15 to begin delivering on his key campaign pledges and finish the job.

In a separate statement, President-elect Todd Gilbert said, “Now we know what it takes for Virginia Democrats to propose tax cuts – losing to a Republican.”

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