Proposed sales tax changes

RICHMOND, VA (WWBT) – State lawmakers are considering cutting the state's sales tax in half - but there's no guarantee you'll have more money in your wallet.

You'll pay less in sales taxes on retail goods you by under this proposal, but you would also start paying sales taxes on services too. This proposal could simplify the tax code, but some say simpler is not always better. 

Retailers are not the only ones making a lot of money during the holiday shopping season - the commonwealth is too. Virginians pay 5% in sales taxes – 4% going to the state and the remaining 1% to local governments.

Willis Turner thinks he could end up paying less.

"My suspicion is I would end up paying less and the state would end up with less revenue only because I typically make a lot more consumer purchases than service purchases like haircuts and things like that," he said.

Others are not so sure. Our NBC12 Facebook page is filled with comments from people opposed to this tax proposal. Jason Taylor wrote: "Well that depends on how much they plan lower the sales tax…It will end up costing more in the end to the actual taxpayer, and at the moment, I can't stand behind that."

Allan Carmody is the Director of the Chesterfield County Department of Budget and Management. He says the slow economy is causing legislators to look at new ways to spark growth.

"You're going to get forced to do things and think differently in these times," Carmody said.

He says part of the proposal is eliminating some local taxes and that could cost Chesterfield County roughly twenty million dollars a year.

Debbie Galbraith says charging sales taxes on services could hurt people that depend on tips.

"If we have to pay a tax on top of the tips, I'm going to lower the tips so they're going to make less money," Galbraith said.

Cyndi Cecil thinks she would understand what's she's being taxed on under this plan.

"It would make it more accessible for more people to understand what they're being taxed on," she said. 

So far no legislation has been drafted with this proposal. The idea is currently being discussed in the Senate Finance Committee.

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