Can a Virginia county set a meals tax rate lower than the rate listed in the referendum ballot question, after voters approved the referendum?

Plain-English summary

Bath County voters approved a meals tax referendum on November 3, 2009. The ballot question asked whether the county should levy a meals tax "in the amount of 4%." After the referendum passed, the Board of Supervisors looked at the economy and decided to set the rate at 1%, not 4%. A citizen complained that the Board had to use the rate listed in the referendum.

The AG disagreed. Section 58.1-3833 authorizes counties to levy a meals tax "not to exceed four percent," and only after voter approval in a referendum. The role of the voters in that statutory scheme is to consent to the tax, not to dictate the exact rate. Once consent is given, the rate is set "in an amount and on such terms as the governing body may by ordinance prescribe."

Two constitutional rules pushed in the same direction. First, the Virginia Constitution (Article VII, § 7) reserves the act of imposing taxes to the governing body (a recorded majority vote), and the legislature cannot delegate that power to the electorate as a tax-setting body. Wright v. Norfolk Elect. Bd., 223 Va. 149 (1982), held that Article VII, § 2 prevents city residents from setting a real estate tax rate by initiative. The same principle blocks a referendum from fixing the meals tax rate.

The AG's parting advice was practical: the cleanest referendum language phrases the question as "up to 4%" rather than "in the amount of 4%," to avoid future controversies of the kind raised in Bath County.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Section 58.1-3833 has been amended multiple times since 2010, including changes to the rate ceiling and exemptions. Anyone planning a referendum or contesting a current rate should confirm the current statutory ceiling and procedural rules.

Common questions

What does § 58.1-3833 actually let a county do?
At the time of this opinion, it authorized any county "to levy a tax on food and beverages sold, for human consumption, by a restaurant" at a rate "not to exceed four percent," after voters approve the tax in a referendum. Certain sales were excluded (vending machines, schools, hospitals, etc.).

Why does the referendum require voter approval at all if the board sets the rate?
Because the Virginia Constitution (Article I, § 6) says people cannot be taxed without their consent or that of their elected representatives. The General Assembly chose to require referendum approval for this specific tax, ensuring direct citizen consent. The General Assembly stopped short, however, of letting the referendum dictate the rate, because Virginia constitutional law (Article VII, § 7) reserves the actual rate-setting to the governing body.

Can a board enact a 5% meals tax if voters approve a referendum that says 5%?
No. The statutory ceiling at the time was 4%. The referendum cannot raise the ceiling above what the statute permits.

What if the board picks a 1% rate and later wants to raise it to 3%?
The opinion does not directly address rate changes after enactment. Practical answer: the board would need to follow ordinary ordinance procedures and stay within the statutory ceiling. Whether a separate referendum would be needed for each rate increase depends on the structure of the original ordinance and current case law.

What's the takeaway for cleaner drafting?
The AG flagged that the "in the amount of 4%" language was awkward. The "safest practice" is referendum language saying the tax will be "up to 4%," which both informs voters of the statutory ceiling and preserves the board's discretion to set a lower rate.

Background and statutory framework

Two constitutional principles framed the AG's analysis:

• Consent to tax. Va. Const. art. I, § 6: "all men, having sufficient evidence of permanent common interest with, and attachment to, the community, have the right of suffrage, and cannot be taxed . . . without their own consent, or that of their representatives duly elected."
• Recorded majority vote of the governing body. Va. Const. art. VII, § 7: "No ordinance or resolution appropriating money . . . , imposing taxes, or authorizing the borrowing of money shall be passed except by a recorded affirmative vote of a majority of all members elected to the governing body."

Section 58.1-3833 is the General Assembly's statutory implementation, enacted under Va. Const. art. VII, § 2 (power to provide for the organization, government, and powers of counties).

The non-delegation principle: a legislative body cannot delegate or divest itself of its legislative powers or its discretion in exercising those powers. Mumpower v. Hous. Auth., 176 Va. 426 (1940); Beal v. City of Roanoke, 90 Va. 77 (1893). Citizens cannot set a tax rate because the Virginia Constitution reserves that power to the governing body. Wright v. Norfolk Elect. Bd., 223 Va. 149 (1982).

A precondition to the tax is voter approval in a referendum held in accordance with § 24.2-684, initiated either by a resolution of the governing body or a petition signed by at least 10 percent of the county's registered voters.

Citations

• Va. Code Ann. § 58.1-3833(A) (2009)
• Va. Code Ann. § 24.2-684 (2006)
• Va. Const. art. I, § 6
• Va. Const. art. VII, § 2
• Va. Const. art. VII, § 7
• Mumpower v. Hous. Auth., 176 Va. 426, 11 S.E.2d 732 (1940)
• Beal v. City of Roanoke, 90 Va. 77, 17 S.E. 738 (1893)
• Wright v. Norfolk Elect. Bd., 223 Va. 149, 286 S.E.2d 227 (1982)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2010/10-053-Collins.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II
Attorney General

December 27, 2010

Michael McHale Collins, Esquire
Attorney for Bath County, Virginia
Collins & Hepler, PLC
Post Office Box 59
Covington, Virginia 24426-0059

900 East Main Street
Richmond, Virginia 23219
804-786-2071
FAX 804-786-1991
Virginia Relay Services
800-828-1120
7-1-1

Dear Mr. Collins:

I am responding to your request for an official advisory opinion pursuant to § 2.2-505 of the Code of Virginia.

Issue Presented

You ask whether an ordinance passed by the Bath County Board of Supervisors pursuant to § 58.1-3833 is a legal enactment of a food and beverage tax ("meals tax") in the amount of 1% when the citizens of Bath County by referendum authorized the Board of Supervisors to impose a meals tax in the amount of 4%.

Response

It is my opinion that the enactment by the Board of Supervisors of a meals tax ordinance with a rate of 1% after voters of that county gave their approval to a meals tax by a referendum vote is a valid exercise of the statutory authority granted to the Board of Supervisors to levy a meals tax in an amount and on such terms as that governing body may by ordinance prescribe.

Background

You state that in the spring of 2009, the Board of Supervisors determined that the approval of the citizens of Bath County should be sought for the enactment of a meals tax in the county in order to provide another source of county revenue. The Board adopted a resolution to put the issue on the next general election ballot, and the Circuit Court entered an order directing that the ballot for the November 3, 2009, general election include a referendum on the following question:

Should Bath County enact an ordinance to levy a tax on food and beverages sold, for human consumption, by a restaurant, in the amount of 4% of the amount charged for such food and beverages not to include, however, sales through vending machines, by boarding houses, employee cafeterias, non-profit cafeterias, and other non-profit organizations?

You advise that the Board of Supervisors chose to present to the voters in the referendum question the maximum meals tax rate of 4% permitted by Virginia law so that the matter would be presented fairly to the public. The referendum question, however, described the proposed tax to be "in the amount of 4%" rather than using the language found in the enabling statute that the proposed tax was "not to exceed four percent." The voters answered in the affirmative the question put before them, approving the enactment of a meals tax for Bath County in the referendum vote on November 3, 2009.

Following the passage of the referendum, those responsible for the collection of the tax voiced concern over the levying of a 4% meals tax in difficult economic times. The Board of Supervisors determined that imposing a tax in the amount of 1% could generate the targeted amount of revenue sought. Following a properly noticed public hearing, the Board of Supervisors enacted an ordinance levying a tax in the amount of 1%. A citizen complaint followed, challenging the authority of the Board of Supervisors to levy a meals tax at a rate less than the 4% rate stated in the approved referendum.

Applicable Law and Discussion

Two important principles of the Constitution of Virginia apply to this matter of local taxation. First, "all men, having sufficient evidence of permanent common interest with, and attachment to, the community, have the right of suffrage, and cannot be taxed . . . without their own consent, or that of their representatives duly elected." Second, "[n]o ordinance or resolution appropriating money . . . , imposing taxes, or authorizing the borrowing of money shall be passed except by a recorded affirmative vote of a majority of all members elected to the governing body." The interplay between these two principles is displayed in § 58.1-3833, enacted by the General Assembly under its express constitutional authority to provide for the organization, government and powers of counties.

Section 58.1-3833(A) authorizes any county "to levy a tax on food and beverages sold, for human consumption, by a restaurant." This tax is "not to exceed four percent" and shall not be levied in certain circumstances enumerated in the statute, such as the sale of food and beverages from vending machines or by public and private schools, colleges and universities, hospitals and extended care facilities.

A precondition to imposing the tax is that the voters approve the tax in a referendum held in accordance with § 24.2-684 and initiated either by a resolution of the county's governing body or a petition signed by at least 10 percent of the registered voters of the county and presented to the circuit court. The role of the voters is not to determine the precise amount of the tax. Rather, the statute calls upon voters to "approve" the tax "in a referendum." Following approval of the voters, the tax is to become effective "in an amount and on such terms as the governing body may by ordinance prescribe."

This division of responsibility mandated by the General Assembly in the context of the meals tax honors both constitutional principles mentioned above. The consent of the county's citizens first must be obtained before a meals tax may be imposed, and the local governing body then retains the authority to adopt an ordinance setting the meals tax rate. Once the citizens of Bath County authorized a tax, the Board of Supervisors, by law, retained the discretion to set the tax rate consistent with statutory requirements. The language on the ballot could not fix the precise amount of the tax — that responsibility rested with the governing body.

Two complementary constitutional considerations favor this interpretation. First, the Board could not delegate its authority to determine the tax rates for the locality to its citizens. It is a general principle of law that a legislative body may not delegate or divest itself or its legislative powers or its discretion in exercising those powers. Second, and more specifically, citizens cannot set a tax rate because the Virginia Constitution reserves that power to the governing body. The terms of the tax are thus within the discretion of the governing body. Therefore, I conclude that the legislation authorizes the imposition of a tax up to 4% and requires the Board to set the rate following the affirmative vote of the referendum. Pursuant to this authority, the Board of Supervisors properly enacted an ordinance that implements a meals tax in the amount of 1%. The safest practice, of course, and the one least likely to invite controversy, is to phrase the referendum language to state that the meal tax will be in an amount "up to 4%."

Conclusion

Accordingly, it is my opinion that the enactment by the Board of Supervisors of a meals tax ordinance with a rate of 1% after voters of that county gave their approval to a meals tax by a referendum vote is a valid exercise of the statutory authority granted to the Board of Supervisors to levy a meals tax in an amount and on such terms as that governing body may by ordinance prescribe.

With warmest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General