The sales tax rate on groceries (food for home consumption and certain essential personal hygiene items) will be reduced to 1% beginning January 1, 2023.
Groceries are about to get cheaper in Virginia as the state government lowers grocery tax to 1% from Jan 1, 2023. Sales of food for home consumption and certain essential personal hygiene products are taxed at the reduced rate of 2.5% throughout Virginia. Beginning January 1, 2023, the rate will decrease to 1%.
The tax reduction however doesn’t apply to all items in the grocery store.
Read on to see the list of items that qualify for the reduced rate and where to get more information about grocery tax rate.
What qualifies as food for home consumption?
Most staple grocery items and cold-prepared foods packaged for home consumption qualify for the reduced tax rate.
Items that don’t qualify for the reduced rate include:
- Alcoholic beverages
- Prepared hot food packaged for immediate consumption on or off premises
- Seeds and plants used to grow food for home consumption
Certain types of vendors are presumed to be selling food for immediate consumption and are not allowed to charge the reduced rate. These includes:
- Concession vendors;
- Entertainment facilities (theme parks, stadium, etc.)
- Fair and carnival vendors;
- Gift shops;
- Hamburger and hot dog stands;
- Ice cream stands and trucks;
- Movie theaters;
- Vending machine vendors.
What qualifies as an essential personal hygiene product?
Essential personal hygiene products that qualify for the reduced tax rate as of January 1, 2020, include:
Nondurable incontinence products:
pads designed to protect undergarments;
pads designed to protect bed sheets and mattresses;
incontinence products designed to be inserted into the body
Feminine hygiene products:
menstrual clothes and pads;
other products used to absorb or contain the menstrual flow.
Any retail establishment whose sales of food for immediate consumption constitute 80% or more of their total sales also may not charge the reduced rate. (A business that also sells motor fuels should include motor fuel sales when determining if they meet the 80% rule).
For more information on the reduced tax on food for home consumption, including detailed lists of eligible foods, please see Tax Bulletin 5-78.
More information on the reduced tax rate on essential personal hygiene products is available on the Tax Bulletin 19-8.
You can file and pay the tax on these items on your regular sales tax return.
Author’s Note: This article is solely for information purposes. The embedded links and information shared in the article are attributed to tax.virginia.gov.
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