Affordability Watch: Hospitality Taxes

Table displaying population, meals tax rate, effective sales tax rate, year last raised, effective top rate, and effective bed tax for localities in Central Virginia.

The state of Virginia and its 133 localities have so many taxes that it’s hard to keep track of them all. The Virginia Restaurant, Lodging and Travel Association (VRTLA) has documented the taxes affecting the hospitality sector — meals taxes, transit occupancy taxes, add-on sales taxes, and bed taxes — in a new report, “2025 Meals & Lodging Tax Study.”

As local governments reassess spending in the post-COVID era, the restaurant and hotel industries have often been viewed as convenient targets for tax increases. When layered on top of higher menu prices and room rates, these added taxes have created an increasingly difficult environment for consumers.

Hospitality-related tax increases have been relatively common in recent years. “Based on the most recent tax increase recorded for each locality, ” states the study, “approximately 43 percent of Virginia localities have raised at least one of the examined taxes since 2016.”

While there is little uniformity in tax levels, the VRLTA makes a few generalizations. By form of government, cities tend to have higher taxes than counties. By geography, coastal Virginia and the Shenandoah Valley tend to have higher taxes than other regions. — JAB


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