|A sign in Silverado.|
If the board approves the referendum, Fairfax County citizens will be able to vote yes or no on a meals tax on Election Day. Under state law, counties can only impose a meals tax if it is approved by voters in a referendum.
The county’s Department of Management and Budget estimates that $96 million in revenue would be generated from a 4 percent meals tax in the first year it takes effect. This estimate is based on taxable sales of food and drinks in calendar year 2015.
A meals tax would diversify the county’s tax revenue base, which currently is mostly dependent on property taxes. When the real estate tax rate is increased, all property-owning residents are affected, regardless of their ability to pay. A meals tax would apply to tourists, commuters, and travelers, as well as residents who choose to dine out. For example, it’s estimated that tourists who patronize Fairfax County restaurants would generate $22.8 million in one year.
At its June 7 meeting, the BoS is also scheduled to vote on a proposal for distributing 70 percent of the revenue from a meals tax to Fairfax County Public Schools, with the balance allocated to county services, property tax relief, and capital improvements, including police and fire stations, libraries, and schools.
Most nearby jurisdictions already have a meals tax. Alexandria, Arlington, Falls Church, and the City of Fairfax have a 4 percent meals tax. Herndon has a 2.5 percent meals tax, Vienna’s is 3 percent, and the District of Columbia’s is 10 percent.
According to County Executive Ed Long, a meals tax would apply to “prepared food and beverages at restaurants, lunchrooms, cafeterias, coffee shops, cafes, taverns, delis, pushcart operations, and hot dog stands.” It would include alcoholic and non-alcoholic beverages served with a meal. It would not apply to food sold from vending machines or in grocery stores, except ready-to-eat food, such as meals from delis and salad bars.