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Chamber Retail Report Shows Tepid Growth in 2023

2023 Retail Report graph

The Charlottesville Regional Chamber of Commerce today released its 2023 analysis of retail sales tax revenue, showing tepid retail growth in parts of the region. Tax data indicate 2023 retail (and internet) sales growth in all seven Central Virginia localities tracked by the Charlottesville Regional Chamber of Commerce.

In total, the localities studied collected nearly $2.8 million (4.28%) more in retail sales tax in 2023 compared to the same period in 2022. Louisa County saw the largest percentage increase (13.97%).

In 2023, the Consumer Price Index (CPI) increased 4.1%. While all localities increased sales in 2023, Augusta County (.37%) and Albemarle County (1.62%) failed to keep pace with inflation as measured by CPI.

Chamber CEO Rebecca Ivins said, “While as a region, the retail sector continues to expand, the details of the ‘2023 Retail Report’ indicate immediate challenges for our retail core. Economic Development efforts should continue to be focused on this critical, job producing, business sector.”

The 2023 Retail Report data is based on the Virginia Department of Taxation’s Local Option Sales Tax Data. According to the University of Virginia’s Weldon Cooper Center for Public Service’s Center For Economic Policy Studies:

“Any city and county may levy a general retail sales tax at the rate of one percent to provide revenue for the locality’s general fund. All local sales tax moneys collected by the localities are paid into a state treasury special fund. The State collects and distributes this Local Option one percent Sales and Use Tax, as provided under the Code of Virginia §58.1-605 and §58.1-606. Actual distributions are made monthly to every county and city based on the locality in which the tax was collected. The amounts are recorded in the Local Option Sales Tax report.”

In general, all sales, leases, and rentals of tangible personal property in or for use in Virginia, as well as accommodations and certain taxable services, are subject to Virginia sales and use tax, unless an exemption or exception is established. Fuel and automobile sales are not included in the local sales tax option. The local “option” is a bit of a misnomer as the State has mandated its collection at a minimum of 1% for all localities in the state (Hampton Roads, Northern Virginia, and Historic Triangle have additional sales tax).