Senate panel kills bill to impose disposable plastic bag tax

The Senate Finance Committee has killed a bill to impose a 5-cent tax on disposable plastic bags that stores give their customers. But the proposal’s sponsor says he isn’t giving up.

The tax would have applied to grocery stores, convenience stores and drug stores in the Chesapeake Bay Watershed, which encompasses most of Virginia. As an incentive to collect the tax, the bill would have allowed retailers to keep 1 cent of the 5-cent levy.

Revenue from the plastic bag tax – estimated at as much as $18 million a year – would have been used to support the Chesapeake Bay Watershed Implementation Plan, which works to reduce pollution in the bay and the region’s streams, creeks and rivers.

The bill (SB 925) was introduced by Sen. Chap Petersen, D-Fairfax, who says that despite its defeat, he will continue to fight for a tax on plastic bags.

“We need to limit the amount of trash that goes into the bay, and one of the easiest ways to do that is to tax goods like plastic bags which are frankly unnecessary and create an environmental hazard,” Petersen said.

The Chesapeake Bay Watershed is the largest estuary in the United States and contains more than 100,000 rivers and streams that filter in from six states.

In 2010, the U.S. Environmental Protection Agency found that excessive amounts of nitrogen, phosphorus and sediment were impairing the bay’s water quality. The EPA told the states whose waters empty into the Chesapeake to limit the pollution entering the bay and associated waterways.

The greatest source of pollution in the Chesapeake Bay is not plastic bags, but agricultural runoff, according to the Chesapeake Bay Foundation. However, plastic bags are destructive to the bay and the environment overall because they kill wildlife, clog landfills and are not biodegradable. The Worldwatch Institute, a Washington-based environmental research group, says Americans throw away 100 billion plastic grocery bags every year.

In Virginia, all land from the Washington suburbs to Virginia Beach drains unto the Chesapeake Bay. Only the southernmost localities and far Southwest Virginia aren’t part of the watershed.

“It’s our environmental legacy here in Virginia,” Petersen said. “The bay is what makes Virginia the unique place it is to live.”

Previous attempts to tax plastic bags in Virginia also have died in committee in the General Assembly.

Several other state and local governments have enacted laws dealing with the issue. For example, Hawaii and California have banned plastic bags, and the District of Columbia has imposed a 5-cent tax on each bag issued to store customers.

The plastic bag tax was opposed by the retail merchant lobby, including the National Federation of Independent Businesses, Petersen said.

Nile Abouzaki manages a family-owned business in Richmond called Shawarma Shack. He says a tax on plastic bags may be well intentioned but would be a burden on small businesses.

“We already have plenty of taxes in Richmond, especially the meals taxes that are somewhat overboard compared to other cities,” Abouzaki said.

Sara Vaughan, general manager of the Virginia Book Company and daughter of the owner, says businesses should decide for themselves whether to be environmentally conscious.

“I think it is up to businesses to be eco-friendly and not get taxed because we have a hard time as it is,” Vaughan said. “But I think we definitely need to be part of the solution as opposed to just sending a bunch of plastic bags out into the environment.”

The Senate Finance Committee considered Petersen’s bill on Wednesday. The panel voted 10-4 along party lines that SB 925 be “passed by indefinitely,” meaning it is dead for this legislative session. All of the Republicans on the committee supported the motion to kill the measure; all of the Democrats opposed it.

According to the Virginia Department of Taxation, the proposed tax on plastic bags would cost state government about $110,000 to implement and enforce the first year, but it could generate between $14 million and $18 million annually for the Chesapeake Bay Watershed Implementation Plan.

The tax would not have applied to:

  • Durable plastic bags with handles that were designed to be reused
  • Plastic bags used to carry ice cream, meat, fish, poultry, leftover restaurant food, newspapers or dry cleaning
  • Bags used to carry alcoholic beverages or prescription drugs
  • Bags sold in packages for use as garbage, pet-waste and leaf-removal bags