Gov. Northam proposes four changes to Virginia tax policy

Published: Dec. 14, 2021 at 1:09 PM EST|Updated: Dec. 14, 2021 at 6:44 PM EST
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RICHMOND, Va. (WWBT) - At a Richmond grocery store Tuesday, Virginia Governor Ralph Northam announced he is proposing to eliminate the 1.5% state grocery tax.

“It’s a total of 2.5%. 1% goes to localities. We’re not touching that. The other 1.5% goes to our general fund. Some of it goes into transportation and some of it goes to education. We are far making up for whatever we’re eliminating through the grocery tax,” said Governor Ralph Northam, (D) Virginia.

The elimination was a 2017 campaign promise for him and something incoming Governor-elect Glenn Youngkin, a Republican, campaigned on.

Northam’s proposal also includes one-time economic growth rebates. That’s $250 for individuals and $500 for married couples.

Northam also wants to provide a tax break through the federal earned income tax credit.

“I think it’s something that Virginians have certainly been waiting for, especially our communities that have been working so hard, this is going to be a tremendous boom for our middle-class families,” said State Sen. Ghazala Hashmi, (D) Virginia 10th District.

Northam’s tax proposal also includes ending accelerated sales tax payments for retailers. In 2008, changes made at the state level meant retailers had to prepay sales tax before selling an item.

“This placed a burden on retailers causing them to reach into their own pockets. It’s time we get rid of this budgeting move altogether,” said Gov. Northam.

It’s not the Democrat who will have the final say, but some of the proposals are aligned with Republican priorities.

A spokesperson for Governor-elect Youngkin says, “Governor-elect Youngkin campaigned on reducing the cost of living, fully funding our law enforcement personnel, raising teacher pay, increasing HBCU funding, expanding broadband access, and eliminating the grocery tax for all Virginians as part of his Day One game plan, Virginians throughout the Commonwealth overwhelmingly embraced those ideals. Governor Northam’s budget proposal is a step in the right direction but does not entirely fulfill Virginians’ mandate. We appreciate the Northam administration laying the foundation for these elements of the Day One game plan so that Governor-Elect Youngkin can hit the ground running on January 15th to begin executing on his key campaign promises and finish the job.”

Governor Northam will present his budget to state lawmakers on Thursday.

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