An Act to amend and reenact § 58.1-1745 of the Code of Virginia, relating to plastic bag tax; distribution to towns.
HB341 amends Virginia’s disposable plastic bag tax law to require that towns located within a county that has adopted the tax receive a share of the county’s bag-tax revenue. Under current law, counties and cities may impose a five-cent tax on each disposable plastic bag provided by certain retailers, and the revenue must be used for environmental cleanup, waste-reduction education, pollution and litter mitigation, or reusable bags for SNAP and WIC recipients. This bill keeps that framework in place but adds a new distribution rule for towns.
Specifically, if a county imposes the tax, any town within that county must receive distributions from the county based on the local sales tax distribution formula used in state law. Those town distributions must be made at the same time and frequency as local sales tax distributions, and towns must use the money only for the same permitted purposes as counties and cities. The bill therefore expands the revenue-sharing structure of the plastic bag tax without changing the tax rate or the authorized uses of the funds.
The bill amends § 58.1-1745 of the Code of Virginia by adding a mandatory revenue-sharing requirement for towns in counties that levy the disposable plastic bag tax. It affects local governments by directing counties to pass through a portion of collected tax revenue to towns using the sales-tax distribution formula in § 58.1-605, and it extends the existing use restrictions to those town receipts. Retailers continue to collect the tax, but the bill changes how the revenue is allocated among localities.
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or opposition in the supplied materials. Based on the enacted chapter text, the bill appears to have moved successfully through the legislative process and was approved as Chapter 112 on April 6, 2026. The available record suggests a generally neutral-to-supportive posture, with the measure focused on local revenue allocation rather than on changing the underlying tax policy.
The main potential point of contention is fiscal: counties that collect the plastic bag tax must share revenue with towns, which may reduce the amount retained by counties for their own environmental and anti-litter purposes. Towns, by contrast, gain a dedicated revenue stream and a claim to a portion of the tax proceeds. Another possible issue is administrative complexity, since counties must calculate and distribute the funds on the same schedule as local sales tax distributions and ensure the money is used only for the statutorily permitted purposes.