Translate[Archived] Question # 60: What are the potential revenues, costs, benefits and drawbacks of implementing the disposable plastic bag tax recently allowed by the State?
Question:
What are the potential revenues, costs, benefits and drawbacks of implementing the disposable plastic bag tax recently allowed by the State? (Mayor Wilson)
Response:
This is in response to the passage of Virginia SB11, which authorizes any county or city to impose a tax of five cents per bag on disposable plastic bags provided to consumers by certain retailers beginning no earlier than January 1, 2021. The plastic bag tax aligns with the City’s goals in the WasteSmart Strategic Plan and the Environmental Action Plan. The bill was also a City Council Legislative Package priority, for which the City’s Legislative Director worked closely with the General Assembly to get the bill passed.
SB11 only applies to grocery stores, convenience stores and drug stores, of which there are approximately 100 in the City. It excludes food establishments and restaurants and does not apply to paper bags. It also limits the City’s share to three of the five cents in the first year and four cents in each subsequent year and allows the Commonwealth to deduct administrative costs for collection, enforcement and dispersal. Staff estimates implementation of this new tax would generate less than $50,000 annually in revenue.
SB11 states that “The Tax Commissioner shall develop and make publicly available guidelines implementing the provisions of this article.” Staff recommends awaiting the issuance of guidelines in order to gather more clarity before fully developing the City’s ordinance. The earliest the City could implement this tax is January 1, 2021, and the City would be required to provide a certified copy of the City’s plastic bag tax ordinance to the Tax Commissioner at least three months prior to the tax effective date.
Utilizing the State’s guidelines (to be published), staff will develop a draft ordinance and implementation plan in the summer and fall including Council’s concurrence to be ready to submit to the State Tax Commissioner. However, there are concerns with the current COVID-19 crisis that plastic bags are safer than reusable bags. Some states and localities have delayed implementation (Maine) and some have banned the use of reusable bags or lifted plastic bag rules (Massachusetts, Illinois, New Hampshire, City and County of San Francisco, and others). Staff will monitor the situation throughout the summer and into the early fall, and then make a recommendation to City Council.