The Roanoke meals tax increase raised the city’s local rate on prepared food and beverages from 5.5% to 6.5%, effective July 1, 2025. Add Virginia’s 5.3% state sales tax on prepared food, and every restaurant meal purchased in the city now carries a combined 11.8% tax.1City of Roanoke, VA. Prepared Food and Beverage (Meals) Tax The change applies to diners, delivery orders, and catered events, and it adds new stakes for the businesses that collect and remit the tax.
The New Rate and When It Started
The City Council adopted the one-percentage-point increase on a 5-to-1 vote on May 12, 2025, as part of the $403 million fiscal year 2026 budget.2City of Roanoke. Commissioner News and Updates The 6.5% local rate applies to all prepared food and beverage sales made on or after July 1, 2025.1City of Roanoke, VA. Prepared Food and Beverage (Meals) Tax A meal purchased June 30 was taxed at the old 5.5% rate. A meal purchased July 1 was not.
What the Combined Tax Adds to Your Bill
The local 6.5% is only part of the picture. Virginia’s 5.3% state sales tax on prepared food and beverages stacks on top, for a total of 11.8%.1City of Roanoke, VA. Prepared Food and Beverage (Meals) Tax On a $25 dinner, that works out to $1.63 in local meals tax and $1.33 in state sales tax, or $2.95 in taxes on the single ticket. Over a month of lunches, coffee runs, and takeout, the difference from the old rate compounds.
What Food and Drinks Are Taxed
The tax covers all prepared food and beverages sold by restaurants, caterers, food trucks, and similar establishments inside city limits. “Prepared” means ready to eat without further cooking. A rotisserie chicken from a grocery store’s hot case, a deli sandwich wrapped for immediate consumption, and a pre-made salad from a convenience store all qualify. The test is whether the item is marketed as ready-to-eat rather than sold as a raw grocery ingredient.
Beverages fall under the same rule. Coffee from a café, a soda at a fast-food counter, and a beer at a bar are all subject to the 6.5% local rate on top of the state sales tax. If the drink is served with or as part of a prepared meal, it is taxable.
Items that require the buyer to cook or significantly prepare them before eating generally fall outside the meals tax. Raw chicken, a bag of rice, or an uncooked frozen pizza bought at a grocery store are not taxed as prepared meals. The line blurs at grocery delis and convenience stores where raw ingredients and ready-to-eat items share a checkout, but the standard stays the same: if it’s sold ready to consume, the meals tax applies.
Where the Revenue Goes
City officials said the additional revenue would fund overtime concentrated in public safety and public works, along with a maintenance and capital improvement backlog built up over prior budget cycles. The increase was not directed to Roanoke City Public Schools; school funding in the fiscal year 2026 budget was held flat at the fiscal year 2025 level.
Meals tax revenue flows into the city’s general fund. The current allocation reflects council priorities for this budget cycle and can shift in future cycles without a separate ordinance. The tax rate itself can only be changed by another formal council vote.
Filing and Remittance for Businesses
Every business selling prepared food or beverages in Roanoke must collect the 6.5% meals tax from the customer at the point of sale and hold those funds in trust for the city. Those dollars belong to the city from the moment the customer pays, so commingling them with operating cash creates real legal exposure.
Businesses file a monthly report of taxable sales and remit the collected tax to the City Treasurer’s office by the 20th of the following month. Tax collected in July is due by August 20.2City of Roanoke. Commissioner News and Updates
The May 2025 ordinance also introduced a seller’s commission that compensates food sellers who report and remit on time.2City of Roanoke. Commissioner News and Updates The specific percentage has not been publicly detailed on the city’s website. Businesses that meet every deadline keep a small slice of the collected tax; miss a deadline, and the benefit is forfeited for that period.
Penalties for Late or False Filing
Missing the 20th-of-the-month deadline triggers an automatic 10% penalty on the amount owed, with a minimum of $2.3Roanoke, VA. Penalties If the delinquency continues, an additional 10% accrues for each 30-day period the tax remains unpaid, capped at a total of 25%.4Roanoke, VA. Penalties and Interest Interest also accumulates on unpaid balances at the maximum yearly rate authorized by Virginia law, calculated from the first day after the tax was due.
Filing a false or fraudulent report carries a 50% penalty on the tax that should have been paid.3Roanoke, VA. Penalties That figure alone can exceed the original bill, and it comes on top of any interest already accrued.
Any violation of the prepared food and beverage tax ordinance also constitutes a Class 1 misdemeanor under Roanoke’s city code.3Roanoke, VA. Penalties In Virginia, a Class 1 misdemeanor carries up to 12 months in jail and a fine of up to $2,500, or both.5Virginia Code Commission. Virginia Code 18.2-11 – Punishment for Conviction of Misdemeanor Entering into an installment agreement to pay off delinquent taxes does not remove criminal liability until the full balance, including all penalties, is paid.