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Fairfax County would need more than 20 new employees and roughly $2.8 million annually to administer a countywide meals tax, though officials project the levy would generate far more revenue than it costs to operate.

The tax would apply to food and drinks sold by restaurants and other food-service businesses. County staff told the Board of Supervisors’ budget policy committee on March 11 that hiring workers and preparing early could help Fairfax avoid the troubled launches experienced elsewhere.

Department of Tax Administration Director Jay Doshi cited Richmond as a cautionary example, pointing to problems involving staffing, technology, enforcement and communication. He said some jurisdictions initially recorded compliance rates of only 75% to 85%.

Fairfax would need intensive outreach and hands-on assistance when the tax begins, particularly for businesses learning new collection and reporting requirements.

Supervisors asked county staff in 2024 to examine a meals tax and other potential revenue sources. County Executive Bryan Hill did not formally include the tax in the proposed fiscal 2026 budget released in February, but identified it as an option worth considering.

The board was expected to advertise a proposal and possible maximum rate on March 18, setting up an April 22 public hearing. Virginia law allows counties to charge as much as 6% in addition to the state’s 4.3% sales tax, but Fairfax officials appeared to be considering either 3% or 4%.

A final decision was expected during the board’s May 6 budget markup ahead of adoption later that month.

Although the new budget takes effect July 1, a meals tax would likely begin in January 2026. That schedule would give county agencies and affected businesses time to prepare and resolve technology issues.

Millions in projected revenue

County estimates show a 3% tax producing about $48.1 million in net revenue from January through June 2026. A 4% rate could bring in approximately $65.1 million during the same period.

Department of Budget Management Director Philip Hagen said he was reasonably confident in those forecasts, while acknowledging that actual collections could differ. A regional or national recession could reduce the total because restaurant spending is often among the first household expenses to be cut.

For a typical middle-income Fairfax County household, a 3% rate would add an estimated $150 per year to the cost of restaurant meals and prepared food.

Supervisors generally appeared comfortable with the proposed staffing needed to administer and enforce the tax while helping businesses comply. Hunter Mill District Supervisor Walter Alcorn noted the program’s complexity, while Providence District Supervisor Dalia Palchik warned that small, independently owned businesses would have the most difficulty adjusting.

Board Chairman Jeff McKay said the supervisors appeared to agree on at least advertising the proposal for consideration. He also noted that the county was already receiving substantial public correspondence.

Voters rejected earlier proposals

Virginia counties were required to hold voter referendums before imposing meals taxes until state law changed in 2021.

Fairfax voters rejected such proposals twice. In 2016, the measure lost with 44% support and 56% opposition. The margin was slightly wider in 1992, when 42% voted in favor and 58% opposed it.

The 2016 proposal would have capped the rate at 4% and directed 70% of the proceeds to Fairfax County Public Schools. Under the current proposal, all revenue would enter the county’s General Fund, leaving supervisors to determine how it is spent.

Springfield District Supervisor Pat Herrity, the board’s only Republican and its most consistent meals-tax skeptic, was absent from the March 11 committee meeting. Several supervisors who attended still questioned whether the levy was the best option.

Franconia District Supervisor Rodney Lusk raised concerns about the effect on lower-income residents, who may spend a larger share of their earnings on restaurant and prepared meals. Mason District Supervisor Andres Jimenez called for extensive outreach to small-business owners, especially those whose first language is not English.

An alternative to higher property taxes

Supporters argue that a meals tax could reduce the county’s dependence on real estate taxes. Officials estimate that visitors and other nonresidents would provide about one-third of the revenue.

Hill’s proposed budget called for a 1.5-cent increase in the real estate tax rate, expected to raise approximately $51 million in the next fiscal year. That is roughly comparable to the amount a 3% meals tax could generate if collected during the fiscal year’s final six months.

Opponents cite the added expense for families, the potential harm to restaurants and retailers, and Fairfax voters’ previous rejection of the tax.

Nearly every Northern Virginia jurisdiction except Loudoun County already imposes a meals tax, including Arlington, Alexandria and Prince William County. A Fairfax County levy would not cover businesses in Fairfax City or the towns of Herndon, Vienna and Clifton, which already charge their own taxes.

Arlington, Fairfax City and Herndon were also considering meals-tax increases as part of their new budgets.