Clouds on the Horizon? Q1 2025 Retail Report Raises Concern
As a part of its mission to inform the public of business activity, the Charlottesville Regional Chamber of Commerce released the 2025 Q1 Retail Report. The report indicates 2025 retail (and internet) sales were tepid or negative in all seven Central Virginia localities tracked by the Charlottesville Regional Chamber of Commerce.
In total, the localities studied collected $126,785 (-.18%) less in retail sales tax in the first quarter of 2025 compared to the same period in 2024. Louisa County saw the largest percentage decrease (-8.12%), Greene (3.01%) and Albemarle (2.03%) showed tepid growth while Augusta, Charlottesville, Fluvanna, and Waynesboro all decreased in sales tax revenue compared to 2024 Q1.
Chamber CEO Andrea Copeland stated, “While weather may have had an impact on the first quarter numbers, our members tell us they and their customers continue to feel the impact of economic uncertainty. It is too early to call the results of the 2025 Q1 Retail Report a trend, but it raises significant concerns.”
The 2025 Q1 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).