Grocery tax cut takes effect New Year’s day in Virginia

Published: Dec. 29, 2022 at 6:03 AM EST
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ROANOKE, Va. (WDBJ) - In 2023, your grocery bill will look a bit lower.

Virginia is cutting taxes on groceries and some personal hygiene products. The new law takes effect Sunday, January 1, 2023.

It will end the state’s current 1.5% sales tax on some groceries. Officials say that’s about $1.50 in savings for every $100 spent.

However, the tax cut doesn’t totally eliminate taxes on groceries in the Commonwealth.

Localities are still able to levy a one-percent tax on the check-out line.

What qualifies as food for home consumption?

According to the Virginia Tax website, most staple grocery items and cold-prepared foods packaged for home consumption qualify for the reduced sales tax rate.

Items that don’t qualify for the reduced rate include:

  • alcoholic beverages
  • tobacco
  • prepared hot foods packaged for immediate consumption on or off premises
  • seeds and plants used to grow food for home consumption.

Certain types of vendors are presumed to be selling food for immediate consumption and are not allowed to charge the reduced rate. These include:

  • caterers
  • concession vendors
  • entertainment facilities (theme parks, stadiums, etc.)
  • fair and carnival vendors
  • gift shops
  • hamburger and hot dog stands
  • honor snack vendors
  • ice cream stands and trucks
  • mobile food vendors
  • movie theaters
  • newsstands
  • vending machine vendors

Any retail store whose sales of food for immediate consumption constitutes 80% or more of their total sales also may not charge the reduced rate. (A business that also sells motor fuels should include motor fuel sales when determining if they meet the 80% rule.)

For more information on the reduced tax on food for home consumption, including detailed lists of eligible foods, see Tax Bulletin 5-78.

What qualifies as an essential personal hygiene product?

Essential personal hygiene products that qualify for the reduced tax rate:

  • diapers
  • disposable undergarments
  • pads designed to protect undergarments
  • bed sheets
  • pads designed to protect bed sheets and mattresses
  • incontinence products designed to be inserted in the body

Feminine hygiene products:

  • sanitary napkins
  • sanitary towels
  • tampons
  • menstrual sponges
  • menstrual cloths and pads
  • menstrual cups
  • pantyliners
  • other products used to absorb or contain menstrual flow

For more information on the reduced rate for essential personal hygiene products, please see Tax Bulletin 19-8.