Disposable plastic bag tax set to begin January 1st, 2026

A five-cent disposable plastic bag tax will take effect locally on January 1st, 2026, following authority granted by the Virginia General Assembly in 2020 and already adopted by ten other localities across the Commonwealth.

The tax applies to disposable plastic bags provided to customers at grocery stores, convenience stores, and pharmacies, regardless of whether the bags are offered for free or sold at checkout. Paper bags and reusable bags are not subject to the fee under state law.

City officials estimate the average annual cost to residents will be about $2.12 per person, based on peer-city analysis. Annual revenue is projected at roughly $400,000.

How the tax works

Retailers will collect the five-cent fee at the point of sale and remit it to the Virginia Department of Taxation using Form ST-9, the Retail Sales and Use Tax Return. Under the state framework, revenue is split so that four cents per bag go to the City, while retailers retain one cent to offset administrative costs.

Funds generated by the tax are restricted to specific uses under state law, including environmental cleanups, recycling education programs, and the distribution of reusable bags to residents receiving SNAP or WIC benefits.

Timeline and outreach

The adoption and rollout follow a multi-step process:

• March to July 2025: City Council adoption process, including a public hearing

• July to December 2025: Business and community engagement period

• January 2026: Disposable plastic bag tax collection begins

City staff are encouraging businesses and community organizations to help inform residents by posting informational flyers. Business guides are available in both English and Spanish.

More details, including statutory language and implementation guidance, are available through Virginia Code § 58.1-1745 and state tax resources provided by the Virginia Department of Taxation.