While much of the focus on the 2021 session of the Virginia General Assembly is on a variety of non-tax, social issues, a number of bills affecting Virginia tax policy have been introduced. Below is a non-exhaustive list of those bills.
- House Bill 1935 (Watts), Senate Bill 1146 (Howell): These bills deal with how Virginia conforms to the Internal Revenue Code for income tax purposes. Because of the nature of this subject, these bills are among the first to be considered. As a result, other bills addressing this topic have already failed to pass. The bills listed here are still pending.
- House Bill 2112 (Herring), Senate Bill 1261 (Edwards): Expands the jurisdiction of the Virginia Court of Appeals to provide an appeal of right in every civil case. These bills represent a tremendous change for taxpayers. Currently, taxpayers who challenge a tax in circuit court only have the option to request that the Supreme Court of Virginia hear their case. If passed, those same taxpayers would be guaranteed (for the most part) an appeal before the Virginia Court of Appeals. There are pros and cons to this structure. Whatever results (assuming passage) will be a major change in Virginia.
- House Bill 2157 (Watts): Reinstates an estate tax in Virginia.
- Senate Bill 1353 (Marsden): Requires corporations to file unitary, combined returns.
- Senate Bill 1170 (Norment): Authorizes Isle of Wight County to enact an additional sales and use tax.
- House Bill 1771 (Freitas): Creates a tax credit for employers for wages paid to a national guard member.
- House Bill 2185 (Byron), Senate Bill 1403 (Pillion): Creates a sales tax exemption for purchases of personal protective equipment.
- House Bill 2273 (Morefield), Senate Bill 1425 (Ruff), Senate Bill 1423 (McPike): Expands the current sales tax exemption for data centers.
- Senate Bill 1166 (Kiggans): Creates an income tax credit for certain nurses.
- Senate Bill 1394 (Peterson and Pillion): Creates an individual income tax exclusion for forgiveness of indebtedness for Paycheck Protection Plan payments.
- House Bill 1763 (Wilt), Senate Bill 1162 (Hanger): Creates an enhanced tax credit for agricultural best management practices.
- House Bill 1774 (Walker): Creates a new class of property for certain vehicle with weight over 10,000 pounds.
As mentioned above, this list of bills is by no means exhaustive. Furthermore, each bill does more than the short description I have provided. This list only shows the introduced bills that I think are potentially interesting. Friday, January 22 was the last day for bills to be introduced conventionally. However, there are procedures in place for bills to be introduced after the bill filing deadline. Even though it rarely happens, it is possible. There is also the practice of enacting tax policy through the annual budget. This practice has been happening since the mid-1990s. While the Governor did not include any tax policy changes in his introduced budget amendments, such changes could certainly be created by the General Assembly.
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.