Governor Glenn Youngkin is considering a proposal from the General Assembly that would increase taxes on businesses.
Back in December, Governor Glenn Youngkin proposed a new digital tax for consumers. If you bought a digital book, for example, you’d have to pay the same sales tax as the hard copy book you got at the bookstore. Now, the General Assembly is agreeing with the governor about consumers and adding businesses to his proposal.
Rodrigo Soto at the Commonwealth Institute says what lawmakers are proposing increases fairness.
"If a business is purchasing Office 365, then they are not exempt from that as well," says Soto. "They should be paying the sales tax for that digital product as well, which is what the legislative proposal does."
But applying the digital tax to businesses instead of just hitting up consumers is bad policy, according to Jared Walczak at the Tax Foundation.
“The consumer tax is small compared to the business tax," Walczak says. "This is why this is well more than a billion dollars in tax increases because the business side is so much larger for digital products than the consumer side is.”
Business groups are urging the governor to veto or amend the proposal from lawmakers. Youngkin has until early next month to figure out how he wants to respond.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
