Subject:
Title
9:15 p.m. - 9:45 p.m. Intent to Adopt - Amendment to Town Code, Chapter 6, Section 6-33 Levy, to Increase the Meals Tax Rate from 3% to 4%
Body
DATE(S) OF PRIOR COUNCIL CONSIDERATION OF THIS ISSUE:
Town Council Meeting: Aug. 25, 2025, Sept. 8, 2025
EXPLANATION AND SUMMARY:
On Nov. 18, 2024, following a public hearing, the Vienna Town Council continued the discussion of the proposed increase to the meals tax rate to its regular meeting on Jan. 27, 2025. At the Town Council meeting of Jan. 27, the matter was then deferred to Aug. 25. In January, Town Council did not direct the Town Clerk to “advertise a Notice of Intent to Adopt” for the August date. At that time the County was considering what it was going to do and for that and other reasons the Town Council just “deferred” the matter to Aug. 25, 2025, for further consideration. On Aug. 25, 2025, the Town Council voted 6-1 to increase the meals tax rate from 3% to 4%, effective Jan. 1, 2026. Back in January, the Town Council did not direct the Town Clerk to advertise a “Notice of Intent to Adopt at the Jan. 27 meeting. Accordingly, the Town Council will need to do a second reading of the proposed meals tax amendment and vote after the Intent to Adopt has been advertised. The Sept. 8 meeting agenda item is only for the Town Council to direct the Town Clerk to advertise a Notice of Intent to Adopt the meals tax amendment for Sept. 29 and then the vote on final approval (what is generally called the “second reading”) can occur.
This agenda item is brought forth to Council to direct the Town Clerk to advertise a Notice of Adoption for the meals tax amendment (as attached).
The meals tax is a local tax imposed on the purchase of prepared food and beverages sold by restaurants, cafes, grocery stores, and other food service establishments within the Town of Vienna. Currently, the Town assesses a 3% tax on these purchases. This tax is paid by consumers at the point of sale and collected by businesses on behalf of the Town.
Over the years, the Town has experienced a substantial rise in community needs and expectations, particularly related to aging infrastructure, deteriorating streets, outdated public facilities, and other long-term capital needs. As the Town continues to maintain and improve its assets, additional funding sources are needed to ensure a reliable and sustainable infrastructure for current and future residents.
All revenue generated by the meals tax is dedicated solely to the payment of debt service related to capital projects as outlined in the Town’s adopted Capital Improvement Plan (CIP). The CIP identifies and prioritizes long-term investments in roads, stormwater systems, parks, public buildings, and other critical infrastructure. The additional revenue from the proposed 1% increase would:
• Help support the continued investment in Vienna’s infrastructure
• Allow the Town to responsibly manage debt obligations related to capital projects
• Provide financial capacity to consider future public facilities and amenities that enhance quality of life
The proposed increase in the meals tax from 3% to 4% reflects the Town’s commitment to maintaining and enhancing essential infrastructure while responding to the evolving needs of the Vienna community. This adjustment allows the Town to strengthen its financial position without placing additional burden on property taxes, while also ensuring that visitors and greater Vienna-area residents who dine in Town contribute to the cost of maintaining and improving local facilities.
Departmental Recommendation: Recommend approving the proposed language in the ordinance and directing the Town Clerk to advertise a Notice of Adoption.
Finance Recommendation: Recommend approving the proposed language in the ordinance and directing the Town Clerk to advertise a Notice of Adoption.
Purchasing Recommendation: N/A
Town Attorney Recommendation: The Town Council has conducted a public hearing on the proposed meals tax rate increase and advertised a Notice of Intent to Adopt. The Town Council may approve or disapprove of the proposed amendment in its discretion.
Town Manager's Recommendation: I recommend the Town Council approve the proposed language to increase the tax rate on Town meal taxes as defined in Chapter 6, Article 4, Section 6-33 of the Town of Vienna Town Code to be a rate of four percent effective January 1, 2026, as presented.
Cost and Financing: N/A
Account Number:
Prior Funding Approval: Annual General Budget (Year), Amendments, CIP Budget (Year), or ARPA. N/A
Decision Needed by this date: Sept. 29, 2025
Next Steps: Advertise a Notice of Adoption.
PROPOSED/SUGGESTED MOTION
Recommended Action
"I move to approve the proposed language to increase the tax rate on Town meal taxes as defined in Chapter 6, Article 4, Section 6-33 of the Town of Vienna Town Code to a rate of four percent effective January 1, 2026, as identified on the proposed ordinance attached to this agenda."
And
“I further move to direct the Town Clerk to advertise a Notice of Adoption.”
Or
Other action deemed necessary by Council.