The Virginia Assembly recently passed House Bill 5018, imposing several changes to Virginia tax law, including specific changes to sales and use tax rates. Effective August 1, 2004, the general Virginia sales and use tax and contractor’s use tax rates increase by 0.5%, raising the rate to 4%. However, as part of the State’s compromise, the tax rate on food for human consumption will conversely decrease 0.5%. Effective July 1, 2005 the rate decreases to 2.5%, July 1, 2006 to 2%, and July 1, 2007 to 1.5%. The rate applied to sales of vending machine sales will also decrease by .5% to 4%, effective August 1, 2004. (Virginia H.B. 5018, Special Session, signed by Governor Warner on June 6, 2004.)