House Republicans Pass Tax Relief to Ensure Virginia’s Competitive Future

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The House of Delegates today passed legislation that will lower Virginians’ state tax burden and make the Commonwealth more competitive for business development. House Bills 2138 and 2319 now head to the Senate for consideration.

These two bills make fundamental improvements to Virginia’s tax system. Taken together with last year’s tax relief, families will be paying $1,900 less on average in state taxes than they were just two years ago.

The legislation would reduce tax rates for those earning more than $17,000 from 5.75 percent to 5.5 percent, saving taxpayers more than $1 billion in its first two years. It would also increase Virginia’s standard deduction to $9,000 for individuals and $18,000 for married persons filing jointly, saving the average Virginia family earning $75,000 approximately $114 annually.

On the business side, the legislation lowers Virginia’s effective business tax rate from 6 percent to 5 percent, saving Virginia businesses approximately $300 million annually. Additionally, the bills would allow for new deductions for small businesses, providing an estimated relief of more than $275 million over the next two years.

“Today, the House took a major step forward in our long-term effort to ensure that our Commonwealth remains an economic leader for generations to come,” said House Speaker C. Todd Gilbert (R-Shenandoah). “House Republicans want to put money back in taxpayers’ pockets, and that’s just a short-term benefit of these long-term improvements. By passing these two bills, we’re positioning Virginia for long-term economic growth.”

“Virginia is always competing with our neighboring states not only for the jobs of tomorrow, but also for the jobs we have today,” said House Finance Committee Chair Roxann Robinson (R-Chesterfield). “As states like Tennessee, Kentucky, and the Carolinas work to become more attractive to businesses and individuals, Virginians cannot afford to be left behind. These changes to our corporate tax structure will make us more competitive with our peers, while providing much needed relief to small businesses across the Commonwealth. This is more than just tax relief, it’s a long-term structural change that will strengthen Virginia’s economic future.”

“Virginia isn’t just in a competition for more jobs, we’re in a competition to retain our current residents and to attract others to our Commonwealth,” said Delegate Joe McNamara (R-Roanoke). “Americans are more mobile than ever, and if a family decides they can do better for themselves in another state, they will move, as recent Census data illustrates. These long-term tax changes will make Virginia a more attractive choice as people search for a place to live, work, and raise a family.”