State and Local Taxation

2020 Virginia Tax Legislation Update

2020 Virginia Tax Legisla…

The 2020 session of the Virginia General Assembly enacted many changes to the tax laws of Virginia. A summary of the legislation can be found here. Most of the legislation is effective on July 1, 2020. Here are some of the more important pieces of tax legislation:

  • For income tax purposes, Virginia has advanced the date of conformity to the Internal Revenue Code to December 31, 2019. This is an annual and very important piece of legislation.
  • For income tax purposes and partnership purposes, Virginia has adopted a new system of partnership procedures to adapt to the change to partnership audit procedures adopted for federal income tax purposes.
  • Following the additional sales and use tax authorized for Halifax County in 2019, the General Assembly adopted an additional 0.7% sales and use tax in Charles City County, Chesterfield County, Goochland County, Hanover County, Henrico County, New Kent County, Powhatan County, the City of Richmond, and the Town of Ashland.
    • The General Assembly also authorized additional sales taxes to be adopted in Charlotte, Gloucester, Henry, Mecklenburg, Northampton, Patrick, & Pittsylvania Counties and the City of Danville.
    • The additional sales and use tax of 1% in Halifax County has been adopted and is effective in July 1, 2020. The Virginia Department of Taxation’s Tax Bulletin on this subject can be found here.
  • The tax rates for the cigarette tax and tobacco products tax have doubled.
  • Counties are now allowed to impose admissions taxes, food and beverage taxes (meals tax), transient occupancy taxes, and cigarette taxes without the previous restrictions such as referendums that were in place.
  • Counties and cities are now allowed to impose a tax on disposable plastic bags provided to customers in retailers such as grocery stores, convenience stores, or drugstores.

For a more thorough summary of the 2020 Virginia tax legislation, click here.

Christian Tennant is a Virginia tax attorney and former employee of the Virginia Department of Taxation. Mr. Tennant regularly speaks and writes on Virginia taxation. In his private practice he advises and represents businesses and individuals on a range of tax matters.

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