Virginia proposal would exempt qualifying food and hygiene purchases from tax

The proposal would bar sales and use taxes on qualifying food and essential personal hygiene products. The provision covers food purchased for human consumption and the listed essential personal hygiene products. Food excludes seeds and plants that produce food, and food sold by a retailer whose prepared-food sales are more than 80 percent of its total receipts. Covered hygiene products include specified disposable incontinence and menstrual products; items already exempt under other provisions are excluded. The exemption would apply on and after January 1, 2027, the act’s stated effective date.

The state would distribute replacement revenue to cities and counties. The distribution would go to cities and counties across Virginia. The total would equal the revenue that would have been distributed if local sales and use taxes had continued to apply to these purchases. Distributions would begin January 1, 2027; each locality’s share would be based on collections for the month of the distribution.