Charlottesville Business Owners Prepare for Sales Tax Increase - NBC29 WVIR Charlottesville, VA News, Sports and Weather

Charlottesville Business Owners Prepare for Sales Tax Increase

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Cash register at Market Street Market in Charlottesville Cash register at Market Street Market in Charlottesville

Starting Monday, you'll be paying more at the register in Virginia. The sales and use tax is ticking up as part of a new road-funding formula. Now, retailers in the Charlottesville area are preparing for the change.    

"I don't think it will affect our business," said Raphael Strumlauf, owner of Market Street Market in Charlottesville. 

On Monday, July 1, the state sales and use tax will increase from 5 percent to 5.3 percent.

"On the computer, it takes about a minute, but we have to go in and flip a little thing and increase it to 5.3," said Dinah Jerrell, Martin Hardware co-manager.

"So when it scans, it goes under that tax bracket," said Strumlauf.

It's part of a new funding formula approved by the Virginia General Assembly in February for a transportation project and is  expected to generate an additional $880 million a year.

The increase applies to all items except fuel and food.

"Toothpaste, canning jars, just really any non-food item," said Strumlauf.

Managers at Martin Hardware say returns after the new tax rate goes into effect could get tricky. For any item bought before Monday and returned, cashiers will have to enter all tax information manually.

"Anything that is bought prior to July 1, if we don't watch it we're going to be refunding them too much money and we're going to be losing money," said Jerrell.

But aside from some small concerns, store owners don't seem too worried.

"It's relatively simple," said Jerrell. 

"It's actually pretty simple, we really just have to change it in one place," said Strumlauf.

Most retailers expect a smooth transition.



Meanwhile, the state's fixed 17.5 cent per gallon tax on gas at the pump will disappear Monday. It will be replaced by a 3.5 percent tax at the wholesale level.

AAA says that could reduce the price of gas by about six cents per gallon. 

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