Plastic Bag Tax
Beginning on January 1, 2022, the City of Fredericksburg implemented a five-cent ($0.05) tax on single-use disposable plastic bags provided to customers in local grocery stores, convenience stores, and pharmacies within city limits (22401 zip code). View Ordinance 2-24 adopted by City Council on September 28, 2021.
The store (grocery, convenience or pharmacy) collects the tax at the time of the sale. Money raised by this tax goes to support environmental cleanups, litter and pollution mitigation, environmental education efforts, and to provide reusable bags to recipients of SNAP or WIC benefits.
Plastic Bag Tax Information and Overview
Legislation enacted during the Regular Session of the 2020 General Assembly (House Bill 534 (2020 Acts of Assembly, Chapter 1022) and Senate Bill 11 (2020 Acts of Assembly, Chapter 1023)) authorizes any county or city to adopt by ordinance the Virginia Disposable Plastic Bag Tax. The tax will be administered by the Virginia Department of Taxation. View legislation here.
As of January 1, 2022, there is a five-cent tax on single-use disposable plastic bags provided to customers in grocery stores, convenience stores, and drugstores in the City of Fredericksburg (22401 zip code). View full guidelines here.
Who does this tax affect?
The state’s guidelines on definitions of these retailers are as followed:
- “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.
A disposable plastic bag subject to the tax includes any plastic bag provided by a grocery store, convenience store, or drugstore to a customer at the point of purchase to transport items purchased and not intended for reuse. Dealers should not collect the tax on the following items:
- 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; or
- Multiple plastic bags sold in packages and intended for use as garbage, pet waste, or leaf removal bags.
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.
How will the city use the funds generated by this tax?
Tax revenue will help fund:
- Litter cleanups
- Community pollution prevention education programs
- Mitigating pollution and litter
- Provide reusable bags to recipients of certain federal food support programs such as Supplemental Nutrition Assistance Program (SNAP) or Women, Infants, and Children Program (WIC) benefits.
Funding for the provision of reusable bags to other city residents would need to come out of alternative funding sources.
To compensate dealers for the cost of collecting, accounting for, and remitting the tax, dealers are permitted to keep a portion of the tax collected. Dealers must account for the discount in the form of a deduction when submitting their tax return and paying the amount due in a timely manner. The amount of the discount will decrease over time as follows:
- Beginning January 1, 2021, and ending January 1, 2023, dealers are allowed to retain two cents ($0.02) from the tax collected on each disposable plastic bag
- Beginning January 1, 2023, dealers are allowed to retain one cent ($0.01) from the tax collected on each disposable plastic bag
Virginia Department of Taxation
The Department will administer the tax similarly to the Retail Sales and Use Tax. As with the local option Retail Sales and Use Tax, the Department of Taxation will be solely responsible for administering the tax, including auditing and collecting of the tax. Read more here.
Virginia Department of Taxation
Virginia Department of Taxation, Attention: Disposable Plastic Bag Tax,
PO Box 27185
Richmond, VA 23261-71858
Phone: (804) 367-8037
Education: Plastic Pollution
Plastic bags have a major impact on the environment because it takes hundreds of years to for them to breakdown, and even then they never truly decompose. During the production of plastic bags, greenhouse gas emissions are created and released into the atmosphere. These emissions carry toxic chemical properties that pose a threat to human and environmental health. By adopting the Plastic Bag Tax, the City of Fredericksburg is committing to its vision of creating a green, clean environment for the whole community.
When plastic starts to break down into smaller pieces they are called microplastics. Microplastics are harmful because they end up being ingested by humans and animals through the food we eat and the water we drink.
Plastic pollution also poses a threat to our natural resources and wildlife mortality. The Rappahannock River, a natural gem to the region, flows to the Chesapeake Bay and then into the Atlantic Ocean. When plastic pollution and litter ends up in our natural environment it damages our waterways, wildlife habitats, and stormwater systems.
Over the next year, this tax has the potential to stop millions of bags from being created and thrown away while increasing revenue for environmental cleanup and education. By bringing a reusable bag to the store, citizens can do their part to make meaningful change for the City of Fredericksburg by supporting a green, clean environment.
For more information on the City’s green initiatives, please contact MacKenzie Bellimam, Environmental Sustainability Coordinator, by email or by calling Public Works at 540-372-1023.