Virginia General Assembly leaders are advancing twin bills to provide nearly $1 billion in tax relief. The House and Senate Finance Committees will both meet Friday to act on legislation that is expected to be voted on by the House and Senate on Monday, then forwarded to Governor Northam. The Senate Finance Committee will take up House Bill 2529, carried by Delegate Timothy D. Hugo (R-Fairfax), and the House Finance Committee will take up Senate Bill 1372, carried by Senate Majority Leader Thomas K. Norment, Jr. (R-James City).
The bicameral compromise will provide $420 million in tax refunds to Virginia taxpayers in October of 2019, increase the standard deduction by fifty percent beginning in tax year 2019, maintain the current rules for state and local taxes (SALT), and include key business tax provisions for Virginia’s largest job creators. The total package will guarantee at least $976 million in tax relief and ensure that all additional revenues from the permanent provisions of Tax Cuts and Jobs Act are placed in the state’s cash reserve fund. The legislation also conforms Virginia tax law to the federal law but will not include an emergency clause.
“Under Republican leadership, the House and Senate have agreed to the most significant tax relief package in the Commonwealth in at least 15 years,” said House Speaker Kirk Cox (R-Colonial Heights). “Since last August, our two chambers have been united in our efforts to ensure that additional revenue from federal tax changes was sent back where it belongs, to the taxpayers. I am proud to stand along Senate Majority Leader Norment and all of my House colleagues as we advance this agreement.”
“Every Virginian who pays personal income taxes will see lower taxes under our plan,” said Senator Norment, Co-Chairman of the Senate Finance Committee. “When fully implemented, we will return nearly $1 billion to the hardworking taxpayers of Virginia. This is simple, direct, and tangible tax relief. We are pleased to work so efficiently with the Speaker, Chairmen Hugo, Ware, and Jones, and our Democratic colleagues, to complete our work on this important issue so expeditiously.”
“It gives me great pleasure to be part of this bicameral effort to provide meaningful tax relief to the people of Virginia,” said House Finance Committee Chairman R. Lee Ware (R-Powhatan). “The proposition for the General Assembly this year was simple. Do we spend taxpayer money or give it back? The legislation we’re advancing today provides an unmistakable answer: we are giving it back.”
“This is a fiscally responsible approach to tax relief that will safeguard our state’s prestigious AAA bond rating and still ensure that there is sufficient revenue to make targeted investments in our core priorities,” said Senator Emmett W. Hanger, Jr. (R-Augusta), Co-Chairman of the Senate Finance Committee.
House Republican Caucus Chairman Tim Hugo (R-Fairfax), the patron of House Bill 2529, said “From the outset, the House and Senate have both been committed to ensuring that Virginians were not stuck paying higher taxes after changes to federal tax law took effect this year. We have not only accomplished that, but we are also sending back nearly $1 billion in tax relief. This money will put nearly $400 back in the pockets of a middle-class family over the next two years, and that makes a real difference.”
“The House and Senate are prepared to send to the Governor’s desk what will be the second largest tax cut in Virginia history,” said Senate President Pro Tempore Stephen D. Newman (R-Bedford). “Over four million Virginians will benefit directly this year and into the future. I am proud that my Senate Republican colleagues promised on the first day of session to do the right thing and return the $1 billion back to the taxpayers. Today we are keeping that promise.”
“For six months, we have all been very clear that the increased revenue from the federal tax cuts was not ours to spend,” said House Appropriations Committee Chairman S. Chris Jones (R-Suffolk). “This plan will give the tax money back to the hardworking people who paid it. Even after providing this much-deserved tax relief, the Commonwealth will have the resources we need to maintain our investments and protect our bond rating. This is a job well done by everyone involved.”
Key Provisions of House and Senate Tax Relief Plan
- Returns all $976 million from increased individual provisions of TCJA
- Provides a tax refund in October 2019, $110 for individuals and $220 for couples
- Increases the standard deduction by 50% to $4,500 for an individual and $9,000 for a couple
- Maintains current state law on State and Local Taxes, preventing a double tax hike on homeowners
- Includes subtraction modification for Global Intangible Low-taxed Income (GILTI)
- Includes deduction for 20% of net interest expenses
- Places $80 million in Taxpayer Relief Fund and $229 million in permanent TCJA revenue in revenue reserve fund
Who is Affected and How?
- Over 4 million Virginia taxpayers will directly benefit
- Those making less than $50,000 will receive 40% of all rebate checks
- Those making $100,000 or less will receive more than 70% of all rebate checks
- Married couples will receive $392 in tax relief over the next two years