By Shirleen Guerra | The Center Square
(The Center Square) – With Democrats controlling Virginia state government, several tax and fee proposals introduced early in the 2026 General Assembly session are drawing scrutiny as lawmakers begin the year with higher-than-expected revenue from the prior fiscal year.
State budget documents show Virginia closed fiscal year 2025 with general fund revenues $572 million above the official forecast, giving lawmakers even more flexibility as they consider new policy priorities during the session.
Despite that revenue performance, multiple bills introduced in recent weeks would generate new revenue through new taxes and fees.
One proposal drawing attention is House Bill 1179, introduced by Del. Kathy Tran, D-Fairfax. According to the Virginia Legislative Information System, the bill would restructure transportation funding and create new regional transit funds while imposing additional taxes and fees in certain localities.
As introduced, the measure would impose a regional sales and use tax, a tax on transportation network companies, a tax on retail deliveries, and a tax on regional commercial parking. The bill would also apply a regional highway use fee to vehicles already subject to Virginia’s existing highway use fee.
The National Federation of Independent Business said it is difficult to justify new or higher taxes and fees at a time when the commonwealth is reporting excess revenue.
In a statement to The Center Square, Julia Hammond, state director for the NFIB, said small businesses are already struggling with rising costs.
“Our members already rank taxes as the No. 1 problem facing small businesses, so it’s hard to justify new or higher fees and taxes, especially when Virginia is reporting a significant surplus,” Hammond said. “Small businesses are already dealing with higher labor costs and rising prices across the board. Adding new or increased taxes now would make it even harder for them to grow, create jobs, and serve their communities.”
Hammond said lawmakers should prioritize using surplus revenue to ease financial pressure on small businesses rather than increasing taxes or fees.
Republican lawmakers have also pointed to Virginia’s fiscal position in recent public comments, arguing the state should focus on affordability and tax relief while revenues remain strong.
The tax proposals are part of a broader set of measures lawmakers are expected to debate as the General Assembly session continues.