The Virginia plastic bag tax is a five-cent charge that grocery stores, convenience stores, and drugstores must collect on every disposable plastic bag given to a customer, but only in the eleven cities and counties that have adopted it. Retailers collect the tax at checkout, report it on their monthly Virginia sales tax return, and remit it to the Department of Taxation. The rule sits in Virginia Code § 58.1-1745, and there is no statewide plastic bag ban behind it — the tax exists only where a local government has chosen to impose it.
Who Has to Collect the Tax
Three store types are covered: grocery stores, convenience stores, and drugstores. If your business fits one of those categories and sits in an adopting locality, you charge the five cents on every disposable plastic bag you hand a customer, whether the bag was free with the purchase or sold separately. The obligation follows the bag, not the sales channel — in-store checkout, curbside pickup, delivery, and to-go orders all count.
Retailers whose main business is something else — clothing, electronics, hardware — are not covered. The statute targets the three formats where single-use bags move in the highest volumes. If you run a pharmacy counter inside a store that would not otherwise qualify as a drugstore, ask the Virginia Department of Taxation whether your location falls under the rule before you decide either way.
Adopting Localities
As of January 2026, eleven Virginia jurisdictions have adopted the tax:
- Albemarle County
- Alexandria City
- Arlington County
- Charlottesville City
- Fairfax City
- Fairfax County
- Falls Church City
- Fredericksburg City
- Loudoun County
- Richmond City (effective January 1, 2026)
- Roanoke City
Other localities can adopt the tax later. A locality that decides to do so must give the Tax Commissioner a certified copy of its ordinance at least three months before the effective date, and the tax has to start on the first day of a calendar quarter.1Virginia Code Commission. Virginia Code 58.1-1745 – Disposable Plastic Bag Tax If you operate stores across several Virginia jurisdictions, you may need to collect in some locations and not others, and your reporting has to keep the counts separate by locality.
Which Bags Are Exempt
Not every plastic bag triggers the tax. Virginia Code § 58.1-1746 carves out four categories:
- Reusable bags — durable plastic bags with handles, designed for multiple uses, at least four mils thick.
- Food-safety bags used solely to wrap or contain ice cream, meat, fish, poultry, produce, unwrapped bulk food, or perishable items to prevent damage or contamination.
- Bags used to carry dry cleaning or prescription drugs.
- Bags sold in packages for home use as garbage, pet-waste, or leaf-removal bags.
The food-safety exemption is the one that trips retailers up most often. The bag has to be used solely for that protective purpose. A produce bag wrapping raw chicken is exempt. The same produce bag, grabbed at the register to carry a customer’s receipt and a candy bar out to the car, is taxable.2Virginia Code Commission. Virginia Code Title 58.1, Chapter 17, Article 12 – Disposable Plastic Bag Tax The four-mil reusable bag is a clean alternative you can offer customers who would rather buy a sturdier bag once than pay the tax on every visit.3Virginia Department of Taxation. Disposable Plastic Bag Tax
How to File, Pay, and Keep the Retailer Discount
You collect the five-cent tax at the point of sale along with the purchase price and other taxes. Reporting rides on your existing sales tax return: the plastic bag tax goes on Form ST-1, the Virginia Retail Sales and Use Tax return, and both the return and the payment are due by the 20th of the month after the bags were provided.3Virginia Department of Taxation. Disposable Plastic Bag Tax Bags provided in March are reported and paid by April 20.
Your return has to include the number of disposable plastic bags provided and the amount of tax collected for each adopting locality where you operate.4Virginia Town Hall. Virginia Disposable Plastic Bag Tax Guidance Keep your bag counts organized. If the Department audits you, that documentation is what you’ll produce.
Under § 58.1-1747, retailers may retain one cent of every five-cent tax collected to cover the administrative work.2Virginia Code Commission. Virginia Code Title 58.1, Chapter 17, Article 12 – Disposable Plastic Bag Tax So you remit four cents per bag and keep one. The catch: the discount only applies if you file and pay on time. File late, and you forfeit the discount entirely and owe the full five cents on every bag.
Penalties for Getting It Wrong
The plastic bag tax is administered under Virginia’s retail sales and use tax framework, and the penalty structure in § 58.1-635 comes with it.
- Late filing or payment: 6% of the unpaid tax for the first month, plus 6% for each additional month or partial month, capped at 30%. The minimum penalty is $10 even when no tax was due.
- Fraudulent returns or willful failure to file: a 50% penalty on the full amount of tax owed.
- Interest: accrues on unpaid tax from the due date until payment, at the rate set under § 58.1-15.
The math is unforgiving. Ignore the obligation for five months and you face a 30% penalty on top of the tax owed, plus interest. Deliberately underreport bag counts and the penalty is half the proper tax.5Virginia Code Commission. Virginia Code 58.1-635 – Failure to File Return; Fraudulent Return; Civil Penalties The Tax Commissioner can waive penalties if there is reasonable cause — something genuinely outside your control — but interest still runs.
Add the lost retailer discount to any late-filing penalty. On high-volume operations, that penny per bag adds up on its own.
Enforcement and Audits
Although the tax is adopted locally, enforcement is entirely a state function. The Virginia Department of Taxation collects the returns, conducts audits, and pursues noncompliance the same way it handles the retail sales and use tax.6City of Alexandria, VA. Plastic Bag Tax Local governments do not run their own bag-tax enforcement. The Department’s authority includes auditing retailers and assessing additional tax when it finds underreporting.4Virginia Town Hall. Virginia Disposable Plastic Bag Tax Guidance
How to Appeal an Assessment
If the Department sends you an assessment you believe is wrong, Virginia law gives you a structured way to challenge it.
Informal Review
Start with an informal review request directly to the Department. This is the fastest way to fix straightforward errors: a miscounted filing period, a payment that crossed in the mail, or a misapplied locality code.7Virginia Department of Taxation. Administrative Appeals
Formal Appeal to the Tax Commissioner
If informal review does not solve the problem, file a formal appeal under Virginia Code § 58.1-1821. The deadline is strict. A complete appeal has to reach the Department within 90 days of the assessment date.8Virginia Code Commission. Virginia Code 58.1-1821 – Application to Tax Commissioner for Correction The appeal must include a full statement of the facts, the reason you disagree, and supporting documentation. Once it is filed, collection activity is suspended while the case is pending, though interest keeps accruing on any unpaid balance.7Virginia Department of Taxation. Administrative Appeals
Miss the 90 days and the path gets harder. You must pay the bill in full and then file a protective claim for refund with the same information you would have put in the appeal. The money leaves your account first, and you fight to get it back.