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2004 SESSION

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HB 108 Tax reform; changes for income tax, sales and use tax, estate tax, and local license taxes.

Introduced by: Allen L. Louderback | all patrons    ...    notes | add to my profiles

SUMMARY AS INTRODUCED:

Tax reform; income tax, sales and use tax, estate tax, and local license taxes. Makes numerous changes to the income tax and sales and use tax, repeals local license taxes, essentially repeals the estate tax over a two-year period, and eliminates the accelerated sales tax payments by certain vendors. Regarding sales and use taxes, the bill reduces the total state rate from 3.5 percent to three percent, repeals most exemptions, exempts food from the tax, and extends imposition of the tax to most services. Regarding income taxes, the bill creates a new set of individual income tax rates and eliminates almost all exemptions, deductions, subtractions and credits for calculating taxable income. The only remaining deductions are for social security income and income earned on obligations of the federal government included in federal adjusted gross income. The changes are effective for taxable years beginning on or after January 1, 2005.

The new rates are as follows: 



Virginia Taxable         Single     Married



  Income Level          Taxpayer    Taxpayer



     $0 - $15,000           0%         0%



$15,001 - $25,000           3.5%       0%



$25,001 - $30,000           4%         0%



$30,001 - $50,000           5.5%       5.5%



$50,001 and above           6.25%      6.25%





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