VRLTA LEGISLATIVE UPDATE: NEW LAWS TAKE EFFECT JULY 1, 2020 Beginning on July 1, 2020 there will be many new laws taking effect that could impact hospitality and tourism businesses in Virginia. Below we have included a list of those that would have a more significant impact on your operations. Unless otherwise noted, the measure takes effect July 1, 2020. Click on bill numbers to see full text of measure.

Minimum Wage Increases HB395 and SB7 would increase Virginia Minimum Wage. The Governor amended the bill to delay the first minimum wage increase to $9.50 from January 1, 2021 to May 1, 2021. However, the rest of timeline for the other aspects of implementation remain the same. From January 1, 2022 to January 1, 2023 the minimum wage will be $11 per hour, and from January 1, 2023 to January 1, 2025 the minimum wage will be $12 per hour. Exempts any person who is less than 18 years of age and who is enrolled in a full-time basis in any secondary school, institution of higher education, or trade school so long as they are not employed more than 20 hours per week. Establishes training wage be created that allows for an employee be paid 75% of the state minimum wage for the first 90 days. There is a provision to increase it to $15, but that has a re-enactment clause attached to it that requires the legislature to approve that section again. If the increase to $15 per hour is not approved then it will be set to CPI-U. Beginning January 1, 2022, the state will conduct a study on the impact of implementing a regional minimum wage, counting all fringe benefits towards the minimum wage, and the impact on employees and employers. The study will also review the impact of the increases that have taken place on employers. The report must be provided to the General Assembly and Governor no later than December 1, 2023. The bill doesn’t make any changes to the tipped wage.

Local Taxing Authority HB785 and SB588 allow counties to levy meals, lodging, and admissions taxes without General Assembly approval or referendum requirements. The measures set caps on the meals tax rate at six percent , and caps on admissions taxes at ten percent ; however, the lodging tax rate does not appear to have a cap , but it does continue to dedicate anything above two percent and up to five percent towards tourism promotion. In addition, it includes a provision that indicates a county may not impose a meals tax until six years after a referendum failed. The Governor made amendments that would delay the new lodging tax provisions from taking effect until May 1, 2021; however, as of July 1, 2020 any county may impose a meals or admissions tax up to the limits allowed in the law.

Regional Lodging Taxes for Transportation HB1414 , and SB890 include provisions that increase the regional lodging tax in Northern Virginia from two percent to three percent to fund Metro. Meanwhile, HB1726 , and SB1038 both include provisions that would impose a one percent to fund public transit in Hampton Roads. The Governor has amended both the Northern Virginia and Hampton Roads lodging tax provisions with a delayed effective date of May 1, 2021.

Games of Skill HB881 and SB971 both would have banned games of skill in Virginia. The Governor has significantly amended both bills to delay the ban until July 1, 2021 and impose a 35% tax on the machines. Of the levy, 84% of tax would be used to help create a COVID-19 relief fund. The ABC would also take over regulation of the machines during the period between July 1, 2020 and July 1, 2021. It also will cap the number of machines at the level that exists as of July 1, 2020.

1099 Tax Parity HB730 and SB211 would require that gig economy contractors, like short term rental hosts have to comply with the same income tax reporting requirements as any other contractor by requiring that these contractors have to use the 1099-MISC ($600 reporting threshold) rather than the 1099-K ($20,000 reporting threshold).

Restaurant Meals Program HB1410 would allow restaurants to opt into accepting Supplemental Nutrition Assistance Program (SNAP) payments for restaurant meals under the “restaurant meals program.” The regulatory framework is currently being created by the Virginia Department of Social Services and must be finalized by January 1, 2021.

ABC License and Fee Reform HB390 and SB389 reorganizes all ABC licenses pursuant to the three-tier structure and license privileges. The measures consolidate many licenses and common privileges, and aligns license fee amounts with enforcement demands, and standardizes quantity limits on alcohol samples. The bill has a delayed effective date of July 1, 2021.

Expansion of Local Special Events Licenses HB949 and SB689 expand the provisions that limit local ABC related special events licenses by increase the number of events a locality may host from 12 to 16 special events per year. Moreover, it also specifies that the duration of any special event shall not exceed three consecutive days.

Commercial Lifestyle Centers SB181 amends the ABC related definition of commercial lifestyle center by reducing the minimum acreage from 25 to 10 for a commercial development to qualify for licensure as a commercial lifestyle center.

As you can see, there are many new laws that will impact the hospitality and tourism industry. For a full list of bills that we were following during the 2020 General Assembly session and potential other laws that could impact your business, please check out our bill tracker . Should you have questions or concerns, please contact VRLTA Director of Government Affairs, Robert Melvin at robert@vrlta.org .