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Grocery shoppers want to see Virginia's grocery tax come to an end, but Hampton leaders say it could leave a huge impact in our cities

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Posted at 4:52 PM, Feb 22, 2022
and last updated 2022-02-22 19:43:00-05

HAMPTON, Va. — Virginia Gov. Glenn Youngkin campaigned on eliminating Virginia’s grocery tax. As the proposal is debated in the General Assembly, News 3 took a look into what impact our cities could face if the portion that goes to them goes away.

Right now, Virginia is just one of 13 states with a tax on groceries. Shoppers want to see it go away, but there could be some impact on local cities if it does.

Kenneth Kitchin, who hopes to see the grocery tax eliminated, said, "I am retired, my wife is retired, and we're trying to save every dime we can."

"Me being a veteran, I welcome it. The prices of everything have jumped up and they're sure to increase more," said grocery shopper Gerald Smith.

Right now, of the 2.5% tax, 1% goes to local cities and counties. Hampton's Commissioner of the Revenue Ross Mugler said that brings a lot of money to the city.

"Local governments must be protected by having some legislation that provides some guarantees that will be automatic in the budgeting process, where we're not subject to annual appropriations," said Mugler.

Mugler said the city could lose slightly more than $4 million each year if the grocery tax is eliminated.

"The part that they're actually going to replace - which is the other half percent, which makes up the 2.5% the state allows at this point to be taxed on groceries - and that portion goes to our schools and transportation fund," said Mugler.

City leaders said in the past through different taxes, they've seen the state say they will eliminate and replace them. But unless it's legislated, there's no guarantee.

As the General Assembly keeps working through the proposed elimination, there is a proposal to make sure local governments can still get tax dollars.

But shoppers just want to see savings at the register.

"We're on a fixed income, and you got to count your dollars and count your pennies, so whatever our governor can do is most appreciated," said Kitchin.

Lawmakers are still working out the specifics on the grocery tax repeal. They face a deadline of March 12, when this session is set to end.

Related: Virginia Senate panel passes partial grocery tax repeal