What Influences State and Local Taxes?
State and local governments choose what taxes and tax rates to impose. Unlike some states, Virginia state government retains significant control over both state and local taxes and has imposed caps on many local taxes. Localities in Virginia can only levy taxes in those areas authorized by the General Assembly. Localities do, however, retain control over property tax rates. The mix of taxes also helps determine the overall tax burden. Some taxes are paid by people outside of the state – for example, lodging taxes paid by out-of-state visitors. Shifting taxes more toward those paid by non-residents can lower the local tax burden for a given level of state expenditures.
