News Summary
The Williamsburg restaurant industry is voicing significant concerns about a proposed increase to the meals tax from 5% to 6.5% set for 2026. Industry leaders fear this hike could divert customers to neighboring areas with lower taxes, further burdening businesses already strained by the pandemic. The City Council’s budget, totaling $103.33 million, also includes increases in lodging and admissions taxes. With rising operational costs and a potentially shrinking customer base, the future of local restaurants appears uncertain as community sentiment turns sour regarding the tax changes.
Williamsburg is facing significant concerns from its restaurant industry regarding a proposed increase to the meals tax set for 2026. The Williamsburg City Council has approved a budget that includes a 1.5% increase in the meals tax, raising it from 5% to 6.5%, marking a 30% hike. Industry leaders are worried that this tax increase could deter customers, leading families to dine in neighboring counties where taxes are lower.
With many local businesses still grappling with the financial impacts of the pandemic, there is fear that additional tax burdens will exacerbate existing challenges. Rising costs in groceries, supplies, utilities, and rent threaten the stability of many restaurants. As the President of the Williamsburg Area Restaurant Association, Noreen Graziano, who has two decades of experience in the local restaurant industry, emphasizes that these tax increases may result in fewer customers and reduced employee numbers in local establishments. Community sentiment has reportedly turned sour, as residents voice disapproval of the proposed changes.
The City’s proposed budget, totaling $103.33 million, aims to address slowing revenue growth and the aging utility infrastructure. In addition to the meals tax increase, the budget also raises the lodging tax by 1% and introduces a new 10% admissions tax on event ticket prices, with exemptions for public school events and certain local organizations. As for utilities, the budget calls for a 30% increase in the water rate, adding $1.59 to the cost per 1,000 gallons starting July 1.
The meals tax increase was made possible following the delay of the “Historic Tourism Tax,” which had prevented any hikes in the meals tax since its implementation in 2018. The new tax ordinances are set to be implemented in January 2026, aligning with the end of this tourism-related tax. This timing has led to criticism regarding the speed at which the meals tax increase has been approved, with some city council members expressing concern over the impact on local businesses.
Industry representatives, including Graziano and other local business owners, have actively attended city council meetings to voice their opposition to the tax increases. They highlight that businesses are already facing increased financial pressure and are still recovering from the losses incurred during the pandemic. Rising credit card fees tied to the meals tax increase further complicate the financial landscape for these establishments.
City Manager Andrew Trivette acknowledged the varied economic pressures during the budget discussions, citing global and local uncertainties as contributing factors to the council’s decision to increase taxes. The council is set to vote on the final budget proposal on May 8, after which the new tax measures will be implemented.
With increasing operational costs and a potentially shrinking customer base due to tax hikes, the Williamsburg restaurant industry continues to push back against changes that could threaten its survival. As families weigh their dining options in light of the increased expenses, the long-term viability of local restaurants remains uncertain.
Deeper Dive: News & Info About This Topic
HERE Resources
Williamsburg City Council Approves Fiscal Year 2026 Budget
Williamsburg City Council Approves $103.33 Million Budget
Williamsburg Revises Fiscal Year 2026 Budget
Williamsburg City Council Considers Tax Increases
Virginia Left Out of Upcoming Michelin Guide
Additional Resources
Author: STAFF HERE WILLIAMSBURG WRITER
WILLIAMSBURG STAFF WRITER The WILLIAMSBURG STAFF WRITER represents the experienced team at HEREWilliamsburg.com, your go-to source for actionable local news and information in Williamsburg, James City County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Williamsburg Farmers Market, Yorktown Market Days, and Busch Gardens Food & Wine Festival. Our coverage extends to key organizations like the Greater Williamsburg Chamber of Commerce and Colonial Williamsburg Foundation, plus leading businesses in education and hospitality that power the local economy such as College of William & Mary, The Williamsburg Winery, and Sodexo. As part of the broader HERE network, including HEREVirginiaBeach.com, we provide comprehensive, credible insights into Virginia's dynamic landscape.
