Youngkin’s proposed budget cuts state income tax, raises sales tax

Virginia Gov. Glenn Youngkin proposed a new state budget Wednesday that would lower income taxes and raise the state’s sales tax in an effort to stabilize revenues and allow Virginians “to keep more of their hard-earned money.”

Youngkin’s plan for the next two fiscal years also would expand the sales tax to include digital services, such as downloading music, that are already taxed in other states. He described the plan as “closing the big-tech tax loophole.”

“Virginia has always taxed goods,” Youngkin said. “And over the last decade, the definition of goods has evolved into new economy goods like software packages, digital downloads, streaming music and videos, cloud storage and other electronic media, on which today Virginia collects nothing.”

Youngkin’s plan for the next two fiscal years also would expand the sales tax to include digital services, such as downloading music, that are already taxed in other states. He described the plan as “closing the big-tech tax loophole.”

“Virginia has always taxed goods,” Youngkin said. “And over the last decade, the definition of goods has evolved into new economy goods like software packages, digital downloads, streaming music and videos, cloud storage and other electronic media, on which today Virginia collects nothing.”

The Republican governor introduced his budget proposal to a joint committee of lawmakers in Virginia’s House and Senate. The plan serves as a starting point for negotiations when the General Assembly convenes in January under a Democratic majority.