Revenue from the tax will go toward environmental cleanup programs, pollution and litter mitigation programs, educational programs on environmental waste reduction, and for providing reusable bags to neighbors in need.
Frequently Asked Questions
Why a plastic bag tax now? The Virginia General Assembly passed legislation in 2020 allowing localities to create ordinances for a five-cent tax on disposable plastic bags provided by retailers in grocery stores, convenience stores, and drugstores. The Virginia Tax Commissioner adopted guidelines in September 2021.
What is the purpose of a plastic bag tax? Plastic bags frequently end up in local watersheds, polluting our natural landscapes and negatively impacting the fish and wildlife that depend on clean waterways. The plastic bag tax is intended to influence consumer behavior by discouraging consumers from using single-use disposable plastic bags, thereby reducing plastic bag residue in our local streams, rivers and lakes. As an added benefit, the revenue collected from the plastic bag tax can help fund pollution reduction and environmental education programs.
For what will the collected taxes be used for? According to the guidelines by the Virginia Tax Commissioner, the funds can be used for:
Providing education programs designed to reduce environmental waste;
Mitigating pollution and litter; or
Providing reusable bags to recipients of Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children Program (WIC) benefits.
What types of retailers would be affected? According to the guidelines by the Virginia Tax Commissioner:
“Grocery store” means an establishment that has an enclosed room in a permanent structure and that sells food and other items intended for human consumption, including a variety of ingredients commonly used in the preparation of meals. This definition does not include food banks, farmers markets, or mobile food units.
“Drugstore” means an establishment that sells medicines prepared by a licensed pharmacist pursuant to a prescription and other medicines and items for home and general use.
“Convenience store” means an establishment that (i) has an enclosed room in a permanent structure where stock is displayed and offered for sale and (ii) maintains an inventory of edible items intended for human consumption consisting of a variety of such items of the types normally sold in grocery stores.
Larger retailers that contain a grocery store, a convenience store, or a drug store are subject to the tax. Such retailers shall collect the tax on all taxable plastic bags provided, regardless of the items sold. However, no store will be considered a convenience store solely because it offers a limited selection of snacks and beverages for sale at the point of sale. In order to be subject to the tax in a locality, a grocery store, convenience store, or drug store must maintain regular business hours at a fixed place of business in the locality.
Will retailers be allowed any discounts for administration of this tax? To compensate dealers for the cost of collecting, accounting for, and remitting the tax, retailers are permitted to keep a portion of the tax collected. Regulated entities will be able to retain two cents for every five cents collected on each disposable plastic bag from when the tax goes into effect in the City through January 1, 2023. After January 1, 2023, this discount will decrease to one cent.
Are there exemptions to this tax? The five-cent tax would not apply to the following bags:
Durable plastic bags, with handles, that are specifically designed and manufactured for multiple reuse and that are at least four mils thick;
Plastic bags that are solely used to wrap, contain, or package ice cream, meat, fish, poultry, produce, unwrapped bulk food items, or perishable food items in order to avoid damage or contamination;
Plastic bags used to carry dry cleaning or prescription drugs; and
Multiple plastic bags sold in packages and intended for use as garbage, pet waste, or leaf removal bags.
Will the City provide reusable bags to those who cannot afford them? Staff provided reusable bags to recipients of SNAP and WIC beneficiaries.
If you are a SNAP or WIC beneficiary, you may pick up a bag from Housing and Human Services in City Hall (300 Park Avenue) from 10 a.m. to 3 p.m., Monday through Friday. (See the website calendar to City government holiday closures.)
Will the City provide business owners guidance to transition to the effective tax date? Staff will develop outreach materials and make available to help communicate the plastic bag tax and make them available on the City’s website.
How will the tax be administered? The tax will be collected, administered, and enforced by the Virginia Tax Commissioner, in the same manner that the Retail Sales and Use Tax is administered. Following deductions from the retailer discount, and direct costs incurred by the Virginia Department of Taxation, remaining revenue will be distributed to the county at the end of each month.
Would the tax apply to online purchases? Yes, if you plan to pick up the order from the store. According to the final guidelines released in September 2021, the plastic bag tax applies to consumers who make in-store, to-go, delivery or curbside pick-up purchases if those purchases are provided in a disposable plastic bag.
How would a plastic bag tax be enforced at self-checkout? Retailers typically rely on the honor system for customers at self-checkout. Many self-checkout kiosks are equipped for customers to electronically indicate if and how many of their own reusable bags they have brought before they begin scanning items.
Can I get a refund on the plastic bag tax if I return the item I bought? No, according to final guidelines published by the Virginia Department of Taxation, as the tax is imposed on each disposable plastic bag provided to a customer rather than the items purchased by the customer, refunds of the Disposable Plastic Bag Tax should not be allowed in situations where the customer returns the items purchased or the bag to the dealer.
When would are retailer need to remit the plastic bag tax to the Virginia Department of Taxation? Affected retailers shall report the number of disposable plastic bags and amount of tax for each locality to the Virginia Department of Taxation. The return must be filed and the tax paid by the retailer to the Virginia Department of Taxation on or before the 20th day of each month for the period ending the previous month.
How do plastic bags compare to paper bags in terms of environmental friendliness? The production and recycling of paper bags is much more water- and energy-intensive than their plastic bag counterparts: For each 1,500 bags produced, paper bags require 1,502 gallons of water while plastic bags require 58. Plastic bags require 71% less energy to produce than paper bags and use 36% less nonrenewable energy. Finally, paper bags require 1,444 British Thermal Unit (BTU) to recycle while plastic bags require 17.
Despite being more water- and energy-intensive to produce and recycle, paper bags have some positive environmental attributes when compared to plastic bags that must be weighed. Paper bags are typically much more biodegradable than plastic bags and pose a much lower risk to marine life.
Another issue is that while plastic bags are not allowed in the City’s curbside recycling program, many residents mistakenly include them. Plastic bags can cause major issues with the recycling sorting machines, slowing down the process or resulting in batches of recycling being disposed.
In terms of overall energy use, the friendliest bag option is a reusable shopping bag. Making the switch to a reusable bag saves about 53 megawatt (MW) of energy per year, as well as 7 liters of water.
How do I report non-compliance? If one of the 20 City retailers is not charging the 5 cent tax, you can call the Virginia Department of Taxation, 804-367-8031 (TTY 711).