VIRGINIA BEACH, Va. — Virginia Beach leaders are considering raising the restaurant meals tax — currently 5.5 percent — by half a percentage point to 6 percent.
Director of Budget and Management Services for the City Kevin Chatellier briefed councilmembers Tuesday on the proposed budget for fiscal year 2025-26. If approved, then the tax will go into effect on July 1, 2025.
Combined with the 6 percent sales tax, this means that Virginia Beach diners will pay a 12 percent tax overall. The city collects the full meal tax and 1 percent of the sales tax.
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The tax applies to any prepared meal sold in a bar, restaurant, drug store, grocery, cafe, convenience store, grill, diner, fairgrounds, event venues, fast food, drive-in or take-out establishments.
The city says revenue from the Restaurant Meals Tax has grown 13.5 percent per year over the past three years on average, "significantly outperforming the historical average of 4.5% annual growth."
The tax is a significant source of revenue for Virginia Beach, the proposal says. The money from the increase would benefit funding for major projects around the city. The Law Enforcement Training Academy and VB Trail were pointed to as key examples.
Michael Mauch, President of Virginia Beach Restaurant Association tells News 3 that he plans to write City Council urging them to consider the broader economic impact of the proposal, in hopes that they will seek alternative solutions.
"Especially with the climate we’re in with the rising cost of food, shortage in labor, this just adds one more element to our plate that prohibits people from visiting restaurants when we need it the most," stated Mauch. "And the margins are super thin on restaurants anyway."
The city will hold two public hearings for residents to voice their opinion on the proposed budget. The meetings will be open to virtual audiences as well.
- April 16, 6 p.m. — Virginia Beach Convention Center
- April 22, 6 p.m. — Council Chamber, City Hall, Bldg. 1
