Trade associations representing hundreds of companies that do business in Virginia have come out swinging against a proposal to expand the state sales tax to cover digital goods, something Republican Gov. Glenn Youngkin proposed and Democrats endorsed in their budget legislation.
Both chambers of the legislature included the new sales tax on purchases like streaming subscriptions, cloud storage and online downloads in the two-year budget plans they passed last week. The Senate went beyond the House of Delegates in also applying it to business-to-business transactions.
VIRGINIA MAN CHARGED WITH THREATENING CHURCH HAS CASE TAKEN OVER BY FEDERAL PROSECUTORS
In a letter sent to lawmakers beginning Tuesday, the Northern Virginia Technology Council and other business-focused lobbying and trade organizations said the General Assembly should reject the proposed “tech tax,” which budget documents from both chambers show is estimated to generate over $1 billion in revenue over the next two-year state budget. At a minimum, the letter said, if policymakers move forward with the proposal, they should broadly exempt business-to-business transactions — or companies may be forced to pass along costs to consumers or move to other states.
Advertisement
“The proposed tech tax hike would put Virginia companies at a significant competitive disadvantage in industries where global competition is high and margins are narrow. The tax will very likely impact hiring and reduce internal research and development investment, the majority of which is currently concentrated here in Virginia,” Jennifer Taylor, president and CEO of the group, said in a statement included with the letter, which a representative of the organization shared with The Associated Press.
The Technology Council says on its website it has nearly 500 members, ranging from Fortune 100 companies to academic institutions and government contractors.
Additional interest groups, including the Virginia Chamber of Commerce, a data center coalition and a coalition of broadband providers, also signed onto the letter.
The Virginia Capitol is seen, March 4, 2010, in Richmond, Va. Trade associations representing hundreds of companies that do business in Virginia have come out swinging against a proposal to expand the sales tax to cover digital goods, something Republican Gov. Glenn Youngkin proposed and Democrats endorsed in their budget legislation.(AP Photo/Steve Helber)
So did the Virginia Manufacturers Association, whose president and CEO, Brett Vassey, said the proposed tax would drive up the cost of software and online training materials used by factories.
Advertisement
Democrats have said the expansion of the tax is a commonsense adjustment that brings Virginia’s tax code in line with an increasingly digital world.
Currently, individuals would pay sales tax on a CD but not a digital download, and a company would pay taxes on a physical server but not cloud storage, Democratic Sen. L. Louise Lucas, chair of the Senate Finance & Appropriations Committee, said while unveiling her chamber’s budget proposal.
“I find it only fair that the same taxes apply to individuals and businesses when consuming the same services,” said Lucas, who dubbed the proposal a “new economy” tax.
Youngkin called for the expansion of the sales tax to cover what he calls the “Big Tech” loophole when he unveiled his proposed version of the 2024-2026 budget in December. But he also coupled it with an income tax cut, which Democrats voted down, in a budget package that would have reduced tax revenues overall.
“Governor Youngkin made it clear during his State of the Commonwealth address that he was only interested in a plan that reduced the tax burden for Virginians. While the governor will review any legislation that comes to his desk, his Unleashing Opportunity budget proposed a nearly $1 billion tax cut over the biennium, building upon the $5 billion in tax relief he delivered on a bipartisan basis to Virginians during his first two years in office,” spokesman Christian Martinez said in an emailed statement.
Advertisement
CLICK HERE TO GET THE FOX NEWS APP
Later this week, lawmakers will send their competing budget plans to a conference committee, a group of legislators who will work to find a compromise plan to send to Youngkin. That process takes place out of public view and in recent years has not been finished on time.
We’re highlighting the many threads that make Virginia so special
As we approach the 250th anniversary of the United States and Virginia, we’re embarking on a journey to celebrate the rich history of the place we call home. (WSLS 10)
Virginia is filled with so much history just waiting to be explored. As we mark the 250th anniversary of the United States and Virginia, we’re celebrating this milestone with a new series: Patchwork 250.
The series will highlight the many threads that make Virginia so special and celebrate every patch (whether that’s a remarkable person, an unforgettable location or a memorable event).
As this new initiative gets underway, we’d love to hear from you. Share your favorite pieces of history and be a part of Virginia’s ongoing story.
Advertisement
Using Pin It or the form below, let us know: what’s a unique piece of history from your community that you think more people should know about?
Click here for more details.
Copyright 2025 by WSLS 10 – All rights reserved.
About the Author
Jazmine Otey headshot
Jazmine Otey
Jazmine Otey joined the 10 News team in February 2021.
A fatal collision between a motorcycle and a pickup truck on Thursday evening has claimed a life and prompted a significant road closure in South Reno.
The Nevada Highway Patrol (NHP) responded to reports of the crash at approximately 5:29 p.m. on February 26. The incident occurred on northbound South Virginia Street, just north of Damonte Ranch Parkway.
According to the Nevada State Police, the rider of the motorcycle, an adult male, was pronounced dead at the scene by emergency medical personnel. The driver of the pickup truck remained on-site, though no further details regarding other injuries or the cause of the crash have been released. Northbound South Virginia Street: Completely shut down from Damonte Ranch Parkway to Bishop Manogue Drive.
Southbound South Virginia Street: Open, but expect “rubbernecking” delays as drivers pass the emergency vehicles. Officials expect the northbound lanes to remain closed until at least 11:30 p.m. as the NHP Highway Patrol Division completes their investigation.
A new effort is being led by Commonwealth Attorney Krystyn Reid, with support from Sen. Danny Diggs to help missing persons. (Ron Lach/Pexels.com)
HAMPTON ROADS— A proposed initiative known as The Guardian Network seeks to strengthen coordination and public access to verified information when children, seniors, and vulnerable adults go missing in Virginia.
The effort is being led by Commonwealth Attorney Krystyn Reid, with support from Sen. Danny Diggs through a budget amendment to SB30. If the amendment passes, development would move forward through the Virginia State Police.
Reid said the idea grew from her years of public service.
“The difference between politics and public service is simple,” Reid said. “One is what you say. The other is what you do.”
Advertisement
Reid began her career representing domestic violence survivors and said she witnessed firsthand how quickly families can be thrown into crisis.
“When someone does not make it home, that is a family’s worst moment,” Reid said. “The Guardian Network comes from a belief that we can strengthen coordination in those first critical hours and better protect vulnerable communities.”
The network is designed to complement existing alert systems such as AMBER, Silver, Ashanti and CODI alerts. Participation would be voluntary for both families and the public.
“It does not replace them. It reinforces them,” Reid said. “What we lack is one centralized, accessible place to see verified information. This is about coordination and clarity.”
Currently, information can be fragmented, she said, making it harder for families and communities to respond effectively.
Advertisement
“Families in crisis should not have to search multiple platforms,” Reid said. “Public safety requires structure. Our response should be organized and accessible.”
The United Way of the Virginia Peninsula has expressed support for the initiative, citing its alignment with the organization’s mission to improve lives by advancing education, financial stability and health.
“Children are the highest age demographic experiencing eviction and homelessness, which creates unique vulnerabilities including separation, exploitation and trafficking,” said Charvalla West of United Way of the Virginia Peninsula. “Seniors face increasing isolation, housing instability and caregiver strain in what many describe as the ‘Silver Tsunami’ of a rapidly aging population.”
She said the organization supports The Guardian Network because it strengthens coordination during the most critical moments when vulnerable individuals go missing.
“The Guardian Network aligns directly with our work to stabilize families and protect vulnerable communities,” West said. “When vulnerabilities are reduced, safety increases.”
Advertisement
United Way collaborates with certified partner agencies across the Virginia Peninsula that focus on homelessness prevention, youth development, domestic violence response, aging services and housing repair. Those organizations would continue serving in their core roles, providing safe housing, trauma-informed care, mentorship, caregiver support and case management, while the network enhances coordination and awareness.
“The Guardian Network enhances coordination and awareness, while nonprofits provide the direct relational support that protects individuals before, during and after crisis events,” West said.
The concept also includes a second phase of development that would establish a standing advisory committee composed of survivors, impacted family members, nonprofit leaders, victim advocates and public safety professionals. A third phase would focus on identifying and allocating resources to support coordinated response efforts in collaboration with law enforcement, including ensuring necessary logistical supplies are available during active situations.
The immediate focus is Virginia. If successful, supporters say the model could be scalable to other states seeking to strengthen coordination in missing-person cases.
Reid said the goal is clear.
Advertisement
“A stronger safety net. Better coordination. And helping bring loved ones home,” she said. “Everyone deserves to come home.”
