HB 978: Retail Sales Tax & Use Tax; Tax on Various Services & Digital Personal Property
🔴 THREAT LEVEL: HIGH
BILL SNAPSHOT
Bill Number: HB 978
Bill Patron: Del. Vivian E. Watts (D)
Bill Area: Tax Policy / Cost of Living / Small Business
QUICK SUMMARY
HB 978 dramatically expands Virginia’s sales tax by taxing everyday services and digital products. This includes things like gym memberships, dry cleaning, landscaping, home repairs, pet care, vehicle repairs, delivery services, and digital services such as software, website hosting, data storage, and digital subscriptions.
The bill shifts how tax revenue is distributed, sending large portions to transportation projects and school funding formulas.
RALLY ANALYSIS
This bill represents a massive tax expansion that hits working families, seniors, and small businesses. By taxing services and digital products, HB 978 moves Virginia closer to a consumption-based tax system that raises prices across the board.
Small businesses would face higher compliance costs, while consumers would see higher bills for routine services.
WHY THIS MATTERS
- Higher costs: Home repairs, pet care, vehicle service, and fitness gyms will all cost more
- Hits small businesses: Many service-based businesses [home repair services] will be forced to raise prices
- Digital economy tax: Online services become more expensive
RALLY VERDICT: ❌ OPPOSE
Rally Virginia opposes HB 978 because it:
- Raises taxes during a high cost-of-living crisis
- Burdens small businesses and working families
Bottom Line: Virginia doesn’t need new taxes on services and digital life — we need lower costs, smarter spending, and taxpayer relief. What happened to Spanberger’s Affordability Program?
RALLY RADAR — THREAT LEVEL LEGEND
⚫ CRITICAL THREAT — Immediate and severe harm; must be stopped
🔴 HIGH THREAT — Serious risk to safety, liberty, or governance
🟡 MODERATE THREAT — Concerning but limited scope
🟢 LOW THREAT — Minimal impact or symbolic
