State and Local Taxation

2021 Enacted Virginia Tax Legislation

2021 Enacted Virginia Tax…

The 2021 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, 2021. Here are some of the more important pieces of tax legislation:

  • For all taxes, Virginia will now provide that all litigated matters will be eligible to be appealed by right to the Virginia Court of Appeals. This is a large shift in Virginia tax policy.
  • For income tax purposes, Virginia has advanced the date of conformity to the Internal Revenue Code to December 31, 2020. However, Virginia has deconformed from several provisions created by Congress to provide financial assistance to businesses during the pandemic. As a replacement for this deconformity, Virginia will offer a deduction of up to $100,000.
  • For income tax purposes, Virginia will sunset coal tax credits after the 2021 taxable year.
  • For corporate income tax purposes, Virginia authorized a study of a unitary filing requirement and is requiring all corporations to file unitary informational returns this year.
  • For retail sales and use tax and transient occupancy tax purposes on sales of hotel rooms through an intermediary, the intermediary will be deemed to be the dealer and responsible for collecting these taxes.

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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