Councilmember Vasquez Luna Pushes for Higher Business Tax Rate, Council Decides to Hold Off — For Now

A push by Councilmember Sonia Vasquez Luna to raise the business computer equipment tax rate met resistance Monday night, as the Manassas City Council instead chose to maintain the current rate of $2.15 per $100 of assessed value.

Vasquez Luna proposed aligning the computer equipment tax, data center tax, and personal property tax (vehicles) at a uniform $3.50 rate, saying it would offer consistency and potentially allow the city to reduce the tax burden on vehicle owners.

“For me, it will be $3.50 for each one of them,” Vasquez Luna said. “And it’s an opportunity to lower the [rate] for personal property.”

But several council members pushed back, expressing concern that such an increase would disproportionately hurt small business owners.

“I’d like to keep the computer tax at $2.15,” said Councilmember Teresa Coates Ellis. “It sends a bad message to small businesses.”

Councilmember Ashley Hutson agreed, noting that large institutions like Lockheed Martin and Micron may be impacted, but so would local startups without a threshold to shield smaller firms.

Ultimately, the council chose to keep the computer equipment tax rate at $2.15 while raising the data center tax rate to $3.60 and keeping the vehicle tax at $3.60. Staff may revisit adding a threshold in future budget cycles, taxing only businesses with a certain minimum amount of computer equipment.

Budget Conversations Continue

The computer tax debate was part of a broader discussion on the proposed fiscal year 2026 budget, with the Council needing to approve maximum advertised rates before public hearings.

Among other key items:

Commercial & Industrial Tax Under Review

The council heard a presentation on a potential 12.5-cent Commercial and Industrial (C&I) property tax that could fund new road construction or transit routes. The measure could help Manassas qualify for additional Northern Virginia Transportation Authority (NVTA) funding, but the council opted to delay consideration until future fiscal years.

Tax Relief for Elderly and Disabled

Council members signaled support for raising the income eligibility threshold to $60,000 for senior and disabled residents seeking real estate tax relief. That change will be implemented through a separate ordinance in FY 2027.

Utility Rates May Rise

Staff recommended an 8.5% increase to water, sewer, and electric rates, citing rising operating costs and the need to maintain the city’s AAA bond rating. Some members, including Vasquez Luna, objected to the size of the increase and called for more analysis of capital spending.

The council will revisit the utility rate issue at its April 7 work session, where utility staff will be present to answer questions. A more minor 5% increase is under consideration as a potential compromise.

To stay on schedule, the city must advertise all maximum tax and utility rates by April 11, ahead of formal budget adoption later this spring.