For more than ten years, Virginia has hosted a tax-free weekend in August, offering savings on items like apparel and educational supplies. A minimum of fifteen other states celebrate comparable sales tax holidays during July and August.However, this year, the regulation permitting Virginia’s sales tax holiday lapsed on July 1, and it has not been re-enacted.
Statistics from the previous year revealed that Virginia households might spend upwards of $600 on materials for school. During the tax-free period, the discounts could exceed $35. Conversely, charities and associations providing necessities such as new backpacks could extend their reach, benefiting more students with the savings of thousands of dollars.
Youngkin’s Proposed $1 Billion Tax Reductions in Virginia
The Virginia statute facilitating the sales tax holiday needed legislative renewal prior to July 1, coinciding with the close of Virginia’s fiscal year on June 30. Other modifications to state laws typically take effect on the same date. For instance, Virginia’s gas taxes saw an increment on July 1, just ahead of the Fourth of July celebration. (The former 28 cents per gallon rate increased to 29.8 cents.)
Without timely legislative intervention, Virginians will miss out on the 2023 back-to-school tax break. The future of this tax-free event remains uncertain. Additionally, Virginia’s tax-exempt weekend wasn’t limited to educational tools; other products like garments and emergency kits were also eligible.
Some tax cuts have been initiated in Virginia, such as a 1% cut in the state’s sales tax on foodstuff and select toiletries starting in 2023. Local sales tax, however, means many Virginia residents continue to incur tax on groceries.
Operating on a biennial budget, the Commonwealth isn’t immediately disrupted by the lack of a budget agreement. Still, the ambiguity over finalizing the budget is significant, and taxation remains a contentious issue.
Governor Youngkin has advocated for close to $1 billion in enduring tax reductions, facing opposition from the Democrat-controlled Virginia Senate. Particular legislators express concerns regarding the lasting consequences of proposed corporate tax incentives and fear that substantial cuts to income tax might hinder Virginia in a potential economic downturn.
2023 Virginia Tax Refund?
Virginia extended tax refunds to eligible citizens last year. The 2022 Virginia refunds, primarily distributed last autumn, amounted to a maximum of $250 for individuals (or $500 for couples filing jointly). These payments mirrored a broader movement, with over twenty other states delivering “stimulus or inflation relief” to qualifying residents. (Some states continue to issue “stimulus” payments this year.)
Proposals for analogous Virginia tax refunds to be distributed later in the year have been made but not settled. Currently, the Republican-majority General Assembly and Democratic Senate remain at an impasse over adjustments to Virginia’s FY24 budget.