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2005 SESSION

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HB 2494 Personal Property Tax Relief Act of 1998; repealed, numerous changes to various taxes.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, increases the motor vehicle sales and use tax from three percent to four percent and reduces the sales price by the value of any trade-in, repeals local license taxes, eliminates the estate tax, eliminates the accelerated sales tax payments by certain vendors, and repeals the Personal Property Tax Relief Act of 1998.

Regarding sales and use taxes, the bill repeals most exemptions, exempts food from the tax, and extends imposition of the tax to most services, excluding health care services and business to business services. 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. In addition, revenues collected from one and one-half percent of the taxable income reported by the Department of Taxation annually will be distributed to localities that have a property tax rate on motor vehicles no greater than $0.01 per $100 of assessed value, based on their share of such taxable income.

The new income tax rates are as follows:

 

Virginia Taxable         Single     Married

  Income Level          Taxpayer    Taxpayer

     $0 - $12,000           0%         0%

$12,001 - $24,000           3.5%       0%

$24,001 - $30,000           4%         0%

$30,001 - $45,000           5.5%       5.5%

$45,001 and above           6.25%      6.25%

 


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