The Virginia General Assembly last year enacted legislation to authorize the new tax of 5 cents per disposable plastic bag provided to retail customers by grocery stores, drug stores and convenience stores. Fredericksburg City Council adopted the tax earlier this year to take effect January 1 in an effort to reduce the use of single-use disposable plastic bags in the City and promote the use of durable multi-use bags by retail and restaurant establishments. This initiative is an extension of City Council’s desired future state for a Green, Clean Environment in which “Fredericksburg is a responsible, modern city with a quality of life that is guaranteed by thoughtful environmental stewardship.”
The tax will be collected at the point of purchase, in a similar manner as sales taxes, and will be administered and enforced by the Virginia Tax Commissioner in Richmond.
Larger “big box” retailers such as Walmart or Target will be subject to the tax if they contain a grocery store, convenience store or drugstore. No retailer will be subject to the tax solely because it offers a limited number of snacks and beverages for sale at the cash register. Furthermore, per state code, the tax will only apply to retailers that maintain regular business hours at a fixed place of business in the City.
Retailers will be compensated for the costs of collecting and remitting the tax by retaining a portion of the tax collected. Until January 1, 2023, retailers subject to the tax will be able to retain 2 cents for every 5 cents collected. After January 1, 2023, this discount will be reduced to 1 cent per bag.
The 5-cent tax will not apply to:
- Durable plastic bags meant for multiple reuse
- Bags that are solely used to wrap ice cream, meat, fish, poultry, produce, unwrapped bulk food items or other perishable food items in order to avoid damage or contamination
- Plastic bags used for dry cleaning or prescription drugs
- Bags that are packaged and sold for use as garbage, pet waste or leaf-removal bags
State law requires that all revenue collected from this tax shall be appropriated for the purposes of environmental cleanup, providing education programs designed to reduce environmental waste, mitigating pollution and litter, and providing reusable bags to recipients of Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children Program (WIC) benefits.