A BILL to amend and reenact §§ 58.1-602, 58.1-605, 58.1-605.1, and 58.1-606.1 of the Code of Virginia, relating to additional local sales and use tax to support schools; referendum.
HB1156 would expand Virginia law governing local sales and use taxes for school construction and renovation. The bill keeps the existing framework that allows localities to levy an additional local sales tax for public school capital projects, but broadens eligibility by changing the school-capital-tax authority from a limited set of “qualifying localities” to “any locality.” It also preserves the requirement that the tax be approved by referendum initiated by the local governing body, and it continues to require that the revenue be used solely for public school capital projects, including new construction, major renovation, and related debt service costs.
The bill also amends the local use tax provisions to match the expanded sales tax authority and adds a new requirement for localities that already have such a tax in place as of June 30, 2026: if they want to extend the tax beyond the referendum’s original expiration date, they must obtain approval in an additional referendum before the tax expires. The bill further excludes food for human consumption and essential personal hygiene products from the school-capital local sales and use taxes, and it requires separate collection and distribution of these revenues from the general local sales tax. It also maintains the existing administrative structure in which the Tax Commissioner collects the tax and the Comptroller distributes the proceeds to the locality.
In practical terms, HB1156 would affect local tax policy, school funding, and the administration of Virginia’s sales and use tax system. Localities that choose to use this authority could raise dedicated revenue for school buildings, renovations, and related financing costs, while taxpayers would see an additional local tax only in jurisdictions that approve it by referendum. The bill would also require local governments and state tax officials to manage a separate fund for each participating locality and to handle the tax’s expiration and possible extension through referendum.
The general sentiment reflected in the bill text is supportive of school capital funding through local option taxation, with an emphasis on voter approval and dedicated use of the revenue. Because there were no committee transcripts or recorded votes provided, there is no direct evidence of debate or opposition in the materials supplied. The bill was referred to Finance and ultimately left in Finance, which suggests it did not advance out of committee during this stage.
The main points of contention likely center on whether localities should be given broader authority to impose a school-focused sales and use tax, and whether extending an existing tax should require another referendum. Other likely concerns include the added tax burden on consumers, the exclusion of food and hygiene products, and the administrative complexity of maintaining separate local funds and referendum-based expiration dates.
HB1156 would amend §§ 58.1-602, 58.1-605, 58.1-605.1, and 58.1-606.1 of the Code of Virginia to expand and restructure local authority to impose dedicated sales and use taxes for public school capital projects. It would broaden the school-capital tax provisions from a limited list of qualifying localities to any locality, while preserving referendum approval, separate accounting, and restricted use of revenues for school construction, renovation, and related debt service. It would also require a new referendum to extend an existing school-capital local tax beyond its original expiration date.
The bill appears generally favorable toward school infrastructure funding and local control, but it conditions that authority on voter approval through referendum and limits the tax’s use to school capital purposes. No committee discussion or vote record was provided, so there is no direct evidence of support or opposition from legislators in the supplied materials. Its being left in Finance indicates it did not move forward in the process at this stage.
Likely areas of contention include the expansion of local taxing authority to all localities, the potential impact on taxpayers, and the requirement that localities seek renewed voter approval to extend an existing tax. Some may also object to the administrative burden of separate funds and the complexity of coordinating sales and use tax collection, while supporters are likely to emphasize dedicated school funding and local referendum control. The absence of transcripts means specific member positions are not available in the record provided.