Spanberger Open to Discussion on Gym, Streaming Service Taxes

In a recent interview with a local ABC affiliate, Virginia Governor Abigail Spanberger indicated openness to discussing potential taxes on services such as gym memberships, digital subscriptions, and dog grooming as part of broader revenue generation strategies.

“I think every idea, as long as it’s reasonable and makes some amount of sense, should be discussed,” Spanberger said during the interview. “I think there are worthy conversations to be had about what revenue generation looks like into the future as our economy changes in so many ways.”

The governor’s comments come at a politically sensitive time as she attempts to balance exploring new revenue sources for Virginia while defending herself against accusations from former President Donald Trump, who has criticized her tax policies on social media.

“So sad! She is adding so many taxes: a food and beverage tax, digital services tax, utilities tax and more. People are leaving that would never have even thought of doing so!” Trump wrote on Truth Social. “This went from a thriving and powerful place to a commonwealth run by a person who has no concept of low taxes and economic strength.”

The accusations stem from several bills introduced in the Virginia legislature that would extend taxes to various services including storage facilities, counseling, dry cleaning, vehicle repair, website design, data storage, and digital subscription services. However, these bills were initially introduced during former Governor Glenn Youngkin’s administration and never reached the General Assembly floor for a vote before the legislative session ended on March 14.

Spanberger has pushed back against Trump’s characterization of her tax record, calling his claims “ludicrous.” Apart from supporting legislation that will incrementally raise the minimum wage to $15 per hour by 2028, Spanberger has not yet approved any new state tax increases since taking office.

The governor did acknowledge that evolving economic trends may require revisiting how certain industries are taxed. “You used to buy a DVD; there used to be sales tax. Streaming is different. So, I recognize there’s value in having these conversations,” she explained, pointing to how digital consumption has transformed traditional retail models that states have historically relied on for tax revenue.

Virginia, like many states, faces the challenge of adapting its tax code to a rapidly changing economy where services and digital transactions have replaced many traditional goods that were more easily taxable. This transformation has created gaps in state revenue systems nationwide, prompting legislators to consider expanding sales taxes to services that were previously untaxed.

Economic policy experts note that service-based taxation represents a growing trend in state revenue discussions as consumption patterns shift away from physical goods. States including Connecticut, New York, and California have similarly grappled with how to modernize tax systems for the digital economy.

Business groups in Virginia have expressed concern about potential service taxes, warning they could hamper economic growth and disproportionately affect small businesses already struggling with inflation and workforce challenges.

Spanberger emphasized that any decision on tax policy would depend entirely on the specific details of proposed legislation. “Whether I would ever sign a bill is wholly dependent on what is actually in the bill and how it is outlined,” she said, suggesting a measured approach rather than blanket support for service taxation.

The debate comes as Virginia, like other states, works to maintain fiscal stability while addressing infrastructure needs, education funding, and other public priorities in a changing economic landscape.

For now, Spanberger appears to be taking a pragmatic stance – keeping options open for discussion while making no firm commitments to new taxes, allowing her administration time to evaluate the long-term fiscal needs of the Commonwealth as she balances political pressures from both conservatives and progressives within the state.