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2019 SESSION
19104584DBe it enacted by the General Assembly of Virginia:
1. That § 58.1-301 of the Code of Virginia is amended and reenacted as follows:
§ 58.1-301. Conformity to Internal Revenue Code.
A. Any term used in this chapter shall have the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required.
B. Any reference in this chapter to the laws of the United
States relating to federal income taxes shall mean the provisions of the
Internal Revenue Code of 1954, and amendments thereto, and other provisions of
the laws of the United States relating to federal income taxes, as they existed
on February 9
December 31, 2018, except for:
1. The special depreciation allowance for certain property provided for under §§ 168(k), 168(l), 168(m), 1400L, and 1400N of the Internal Revenue Code;
2. The carry-back of certain net operating losses for five years under § 172(b)(1)(H) of the Internal Revenue Code;
3. The original issue discount on applicable high yield discount obligations under § 163(e)(5)(F) of the Internal Revenue Code; and
4. The deferral of certain income under § 108(i) of the
Internal Revenue Code. For Virginia income tax purposes, income from the
discharge of indebtedness in connection with the reacquisition of an "applicable
debt instrument" (as defined under § 108(i) of the Internal Revenue Code)
reacquired in the taxable year shall be fully included in the taxpayer's
Virginia taxable income for the taxable year, unless the taxpayer elects to
include such income in the taxpayer's Virginia taxable income ratably over a
three-taxable-year period beginning with taxable year 2009 for transactions
completed in taxable year 2009, or over a three-taxable-year period beginning
with taxable year 2010 for transactions completed in taxable year 2010 on or
before April 21, 2010. For purposes of such election, all other provisions of §
108(i) of the Internal Revenue Code shall apply mutatis mutandis. No other
deferral shall be allowed for income from the discharge of indebtedness in
connection with the reacquisition of an "applicable debt instrument.";
5. The amount of the
deduction allowed for domestic production activities pursuant to § 199 of the
Internal Revenue Code for taxable years beginning on or after January 1, 2010.
For Virginia income tax purposes, two-thirds of the amount deducted pursuant to
§ 199 of the Internal Revenue Code for federal income tax purposes during the
taxable year may be deducted for Virginia income tax purposes for taxable years
beginning on and after January 1, 2010. For taxable years beginning on and
after January 1, 2013, the entire amount of the deduction allowed for domestic
production activities pursuant to § 199 of the Internal Revenue Code may be
deducted for Virginia income tax purposes;
6. The provisions of the
Tax Cuts and Jobs Act (the Act) enacted December 22, 2017, as Public Law
115-97, provided, however, that this exception shall not apply to the
following:
a. Treatment of certain
individuals performing services in the Sinai Peninsula of Egypt pursuant to §
11026 of the Act;
b. Relief for 2016
disaster areas pursuant to § 11028 of the Act;
c. Any other provision of
the Act that affects the computation of federal adjusted gross income of
individuals or federal taxable income of corporations for taxable years
beginning after December 31, 2016, and before January 1, 2018, other than the
temporary reduction in the medical expense deduction floor pursuant to § 11027
of the Act; and
7. The provisions of the
Bipartisan Budget Act of 2018 enacted February 9, 2018, as Public Law 115-123,
that affect any taxable year other than a taxable year beginning after December
31, 2016, and before January 1, 2018.
The Department of Taxation is hereby authorized to develop procedures or guidelines for implementation of the provisions of this section, which procedures or guidelines shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).
2. That an emergency exists and this act is in force from its passage.
3. That the provisions of the first enactment of this act shall be effective only for taxable years beginning on and after January 1, 2018.
4. That any additional revenues generated by the federal Tax Cuts and Jobs Act, Public Law 115-97 (2018), in fiscal years of the Commonwealth beginning on and after July 1, 2018, but before July 2, 2026, beyond those revenues reasonably expected to be collected absent the federal policy changes, shall be transferred to a special nonreverting fund hereby established and to be known as the "Taxpayer Relief Fund." On September 1, 2019, and each September 1 annually through September 1, 2027, the Department of Taxation shall issue a refund to each individual taxpayer (including married persons filing a joint return) who filed a tax return in the immediately preceding taxable year. The Department of Taxation shall determine the amount of the refund due to each taxpayer based on the amount of revenues deposited into the Taxpayer Relief Fund during the prior fiscal year and shall ensure that such refunds are calculated and distributed on a pro rata basis based on the tax liability of each taxpayer after accounting for additions, deductions, subtractions, and credits claimed by the taxpayer.