Updated May 12, 2018: The Alexandria City Council on Saturday approved a 1 percent increase in the Meals Tax to support affordable housing initiatives.
Currently, Alexandria diners pay the normal 6 percent sales tax on meals, plus a 4 percent tax from the City of Alexandria, for a total of 10 percent. The 1 percent increase would bring the total to 11 percent tax on meals.
The City has been charging a Meals Tax since 1975. The 4 percent rate went into effect with the 2009 budget.
The current 4 percent rate is still less than most Virginia towns and cities with Meals Taxes. According to data from the Weldon Cooper Center for Public Service in Charlotteville, Virginia, Alexandria’s 4 percent rate is higher than 40 localities, equal to 47 and lower than 108. \
The statewide average Meals Tax rate is 6 percent. Counties are limited to 4 percent unless a local referendum allows a higher rate.
Original story, May 16, 2018:
A public hearing on a 1 percent increase in the City of Alexandria meals tax to help fund additional affordable housing is set for Saturday morning in Council Chambers at City Hall. If passed, the meals tax would rise from 4 percent to 5 percent.
The council will meet at 9:30 a.m. Saturday in the City Council Chambers at 301 King St., Room 2400.
The Alexandria Chamber of Commerce is asking its members to sign up to speak at the meeting or submit a letter to the Council and to urge that the City find an alternative solution to raising funds for affordable housing.
A petition from restaurant owners and retailers is making the rounds, urging City Council to "free Alexandria restaurants from tax discrimination."
In addition to requesting that the 1 percent increase be repealed, the petition also asks that restaurants be given a 3 percent rebate on all meals tax revenues collected, noting that restaurants currently pay credit card fees in order to collect taxes for the city.
The Chamber sent a letter to City Council earlier this week officially opposing an increase in the meals tax.
"...we do not feel that a dedicated fund is the proper method to achieve the desired results" the Chamber said in a news release. "Rather, we urge Council to find a way to incorporate affordable housing into the City's long term planning and overall budget."
In the May 2 mayoral debate held in Del Ray, Vice Mayor Justin Wilson said that he was for funding affordable housing through the general fund; he also noted he was for decreasing real estate taxes if there were going to be an increase in the meals tax; he also said the City needs to make more use of its land use/zoning authority.
"I am fully committed to dedicated funding for the affordable housing fund and my colleague is not," Mayor Allison Silberberg responded.
