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2019 SESSION

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Senate Committee on Finance

Co-Chair: Thomas K. Norment, Jr. - Co-Chair: Emmett W. Hanger, Jr.

Clerk: John Garrett
Staff: Lisa Wallmeyer
Date of Meeting: January 24, 2019
Time and Place: 4:30 PM Shared Committee Room B

S.B. 1083 Remote sales & use tax collection; sufficient activity by dealers & marketplace facilitators, etc.

Patron: Ruff


Remote sales and use tax collection; sufficient activity by dealers and marketplace facilitators as to require registration for sales and use tax collection. Directs the Department of Taxation (the Department) to require a remote seller to collect sales and use tax if the seller has more than $100,000 in annual gross revenue from sales in Virginia or at least 200 sales transactions in Virginia and requires a marketplace facilitator, which enables marketplace sellers to sell in Virginia through its marketplace, to collect sales and use tax if its annual gross revenue from facilitated sales in Virginia exceeds $100,000 or it facilitates at least 200 sales transactions in Virginia. The bill provides that the obligation of remote sellers and marketplace facilitators to collect sales and use tax shall not apply to transactions occurring before July 1, 2019.

The bill provides that in administering remote sales and use tax collection, the Department shall provide information to remote sellers to allow them to identify state and local tax rates and exemptions. For auditing purposes, the Department is directed to allow a remote seller to complete a single audit covering all localities. The bill requires the Department to give remote sellers at least 30 days' notice of any change in tax rate.

The bill provides that if a remote seller or marketplace facilitator collects an incorrect amount of tax, it shall be relieved of liability for failure to collect the correct amount if the error is the result of its reliance on information provided by Virginia. The bill also relieves a marketplace facilitator of liability if it collects an incorrect amount of tax based on certain incorrect information provided by a seller or purchaser.

The bill repeals several contingent provisions of previous related bills that would take effect if the United States Congress enacted legislation related to remote sales and use tax collection. The bill contains technical corrections.

S.B. 1093 Literary Fund; creates School Modernization Subfund.

Patron: Ruff

Literary Fund; School Modernization Subfund. Creates a subfund in the Literary Fund to be known as the School Modernization Subfund (the Subfund). Moneys in the Subfund would be used to subsidize interest payments by local governing bodies and school boards on certain loans from the Virginia Resources Authority and other approved sources for school construction and modernization. Only school divisions with a composite index of local-ability-to-pay less than 0.4000 would be eligible to participate in the interest payment program. The Subfund would receive any revenues collected if the General Assembly authorizes the collection of sales and use tax from remote sellers and any other funds appropriated by the General Assembly.

S.B. 1120 Motor fuels tax; rate of taxation.

Patron: Petersen

Motor fuels tax; rate of taxation. Repeals the enactment clause from Chapter 766 of the Acts of Assembly of 2013 (the transportation funding bill) that would automatically lower the rate of taxation on motor fuels if Congress were to enact legislation granting states the authority to compel remote sellers to collect and remit sales and use tax.

S.B. 1211 Income tax, state; conformity; standard deduction.

Patron: Chafin

Virginia income tax; conformity; standard deduction; emergency. Advances conformity of the Commonwealth's tax code with the federal tax code to December 31, 2018, including conformity to the federal Tax Cuts and Jobs Act. The bill raises Virginia's standard deduction to $6,000 per taxpayer or $12,000 for married persons filing jointly for taxable year 2018. In future tax years, the deduction will be adjusted by a percentage equal to the difference in the Chained Consumer Price Index for All Urban Consumers between the current year and 2018. The bill also contains an emergency clause.

EMERGENCY

S.B. 1225 Virginia income tax; advances conformity of the Commonwealth's tax code with the federal tax code.

Patron: Chase


Virginia income tax; emergency. Advances conformity of the Commonwealth's tax code with the federal tax code to December 31, 2018, starting with taxable year 2018. The bill increases, starting with taxable year 2019, the amount of the standard deduction (i) from $3,000 to $6,000 for an individual or for married persons filing separately and (ii) from $6,000 to $12,000 for married persons filing jointly. Starting in 2020, the bill adjusts Virginia's standard deduction by the percentage increase in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the previous taxable year. In taxable year 2026, the standard deduction would return to $3,000 for an individual or a married person filing jointly and $6,000 for married persons filing jointly, coincident with the expiration of the individual income tax provisions of the federal Tax Cuts and Jobs Act (TCJA). Beginning in taxable year 2020, the individual tax brackets and the personal deductions will also be adjusted by the percentage increase of the C-CPI-U for the previous taxable year.

The bill reduces the corporate income tax from its current rate of six percent to five and one-half percent in 2018 and to five percent in 2019 and subsequent years. The bill provides that any additional revenues generated by the TCJA, beyond those revenues necessary to offset the reduction in revenues resulting from the provisions of the bill, shall be transferred to the Tax Policy Fund, created by the bill, to be used to provide tax reform to Virginia taxpayers starting in fiscal year 2020. The bill contains an emergency clause.

EMERGENCY

S.B. 1237 Income tax, state; itemization.

Patron: DeSteph

Individual income tax; itemization. Allows an individual taxpayer to itemize deductions for state income tax purposes regardless of whether he elects to itemize deductions on his federal return for taxable years 2018 through 2025. Current law requires a taxpayer to claim the standard deduction on his state return if he claims the standard deduction on his federal return. The bill contains an emergency clause.

EMERGENCY

S.B. 1256 Income tax, state; subtraction for gain from taking by eminent domain.

Patron: Ruff

Virginia taxable income; subtraction for gain from taking by eminent domain. Creates an income tax subtraction for gain recognized by a taxpayer from a taking of real property by condemnation proceedings.

S.B. 1267 Remote sales and use tax collection; sufficient activity by dealers and marketplace facilitators.

Patron: Stuart


Remote sales and use tax collection; sufficient activity by dealers and marketplace facilitators as to require registration for sales and use tax collection; transportation funding. Directs the Department of Taxation (the Department) to require a remote seller to collect sales and use tax if the seller has more than $100,000 in annual gross revenue from sales in Virginia or at least 200 sales transactions in Virginia and requires a marketplace facilitator, which enables marketplace sellers to sell in Virginia through its marketplace, to collect sales and use tax if its annual gross revenue from facilitated sales in Virginia exceeds $100,000 or it facilitates at least 200 sales transactions in Virginia. The bill provides that the obligation of remote sellers and marketplace facilitators to collect sales and use tax shall not apply to transactions occurring before July 1, 2019.

The bill provides that in administering remote sales and use tax collection, the Department shall provide information to remote sellers to allow them to identify state and local tax rates and exemptions. For auditing purposes, the Department is directed to allow a remote seller to complete a single audit covering all localities. The bill requires the Department to give remote sellers at least 30 days' notice of any change in tax rate.

The bill provides that if a remote seller or marketplace facilitator collects an incorrect amount of tax, it shall be relieved of liability for failure to collect the correct amount if the error is the result of its reliance on information provided by Virginia. The bill also relieves a marketplace facilitator of liability if it collects an incorrect amount of tax based on certain incorrect information provided by a seller or purchaser.

The bill allocates revenue from the state portion of remote sales and use tax collection to the Transportation Trust Fund but requires the revenue to be spent only to fund improvements to existing roads. The bill distributes the local portion to localities based on point of sale.

The bill repeals several contingent provisions of previous related bills that would take effect if the United States Congress enacted legislation related to remote sales and use tax collection. The bill contains technical corrections.

S.B. 1294 Remote sales & use tax collection; sufficient activity by dealers & marketplace facilitators, etc.

Patron: Howell


Remote sales and use tax collection; sufficient activity by dealers and marketplace facilitators as to require registration for sales and use tax collection. Directs the Department of Taxation (the Department) to require a remote seller to collect sales and use tax if the seller has more than $100,000 in annual gross revenue from sales in Virginia or at least 200 sales transactions in Virginia and requires a marketplace facilitator, which enables marketplace sellers to sell in Virginia through its marketplace, to collect sales and use tax if its annual gross revenue from facilitated sales in Virginia exceeds $100,000 or it facilitates at least 200 sales transactions in Virginia. The bill provides that the obligation of remote sellers and marketplace facilitators to collect sales and use tax shall not apply to transactions occurring before July 1, 2019.

The bill provides that in administering remote sales and use tax collection, the Department shall provide information to remote sellers to allow them to identify state and local tax rates and exemptions. For auditing purposes, the Department is directed to allow a remote seller to complete a single audit covering all localities. The bill requires the Department to give remote sellers at least 30 days' notice of any change in tax rate.

The bill provides that if a remote seller or marketplace facilitator collects an incorrect amount of tax, it shall be relieved of liability for failure to collect the correct amount if the error is the result of its reliance on information provided by Virginia. The bill also relieves a marketplace facilitator of liability if it collects an incorrect amount of tax based on certain incorrect information provided by a seller or purchaser.

The bill repeals several contingent provisions of previous related bills that would take effect if the United States Congress enacted legislation related to remote sales and use tax collection. The bill contains technical corrections.

S.B. 1297 Low-income taxpayers; refundable income tax credit.

Patron: Barker

Refundable income tax credit for low-income taxpayers. Allows low-income individuals and married persons to claim either (i) a nonrefundable income tax credit equal to $300 for each individual, his spouse, and any dependents or (ii) a refundable income tax credit equal to 20 percent of the federal earned income tax credit claimed that year by the individual or married persons. Under current law, low-income individuals and married persons may elect either of these amounts; however, both options for claiming the credit are nonrefundable. The provisions of the bill apply to taxable years beginning on and after January 1, 2019, but before January 1, 2026.

S.B. 1320 Commonwealth's taxation system; conformity with the Internal Revenue Code.

Patron: Hanger

Conformity of the Commonwealth's taxation system with the Internal Revenue Code; emergency. Advances conformity of the Commonwealth's tax code with the federal tax code to December 31, 2018, including conformity to the federal Tax Cuts and Jobs Act. The bill also makes technical amendments and contains an emergency clause.

EMERGENCY

S.B. 1337 State sales and use tax by remote sellers; collection, disposition of revenue, report.

Patron: Peake

Collection of state sales and use tax by remote sellers; disposition of revenue; report. Creates the Online Revenue Collection Fund for the collection of revenues generated in the event that the General Assembly adopts legislation requiring the remittance of sales and use tax by remote sellers and marketplace facilitators. Following the first full fiscal year in which the remittance of state sales and use tax by remote sellers and marketplace facilitators is required, the Commissioner of the Department of Taxation shall report on the total amount of revenues collected and shall calculate the amount by which the state sales and use tax rate could be reduced and replaced with revenues from the Fund so as to be revenue neutral.

S.B. 1372 Commonwealth's taxation system; conformity with the Internal Revenue Code.

Patron: Norment

Conformity of the Commonwealth's taxation system with the Internal Revenue Code; emergency. Advances conformity of the Commonwealth's tax code with the federal tax code to December 31, 2018, including conformity to the federal Tax Cuts and Jobs Act. The bill also eliminates an obsolete provision and contains an emergency clause.

EMERGENCY

S.B. 1390 Remote sales and use tax collection; disposition of revenues.

Patron: Wagner

Remote sales and use tax collection; disposition of revenues. Repeals contingent provisions of bills adopted in prior sessions of the General Assembly related to the disposition of certain sales and use tax revenues that would take effect if the United States Congress enacted legislation related to remote sales and use tax collection. By repealing these provisions, any revenues generated from the remote collection of sales and use tax in the Commonwealth would be allocated in accordance with the existing sales and use tax allocation formula, and the gas tax will remain at its current rate.

S.B. 1443 Virginia income tax; advances conformity of Commonwealth's tax code with federal tax code.

Patron: Stuart


Virginia income tax; emergency. Advances conformity of the Commonwealth's tax code with the federal tax code to December 31, 2018, starting with taxable year 2018. The bill increases, starting with taxable year 2018, the amount of the standard deduction (i) from $3,000 to $6,000 for an individual or for married persons filing separately and (ii) from $6,000 to $12,000 for married persons filing jointly. Starting in 2019, the bill adjusts Virginia's standard deduction by the percentage increase in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the previous taxable year. In taxable year 2026, the standard deduction would return to $3,000 for an individual or a married person filing jointly and $6,000 for married persons filing jointly, coincident with the expiration of the individual income tax provisions of the federal Tax Cuts and Jobs Act (TCJA). Beginning in taxable year 2020, the individual tax brackets and the personal deductions will also be adjusted by the percentage increase of the C-CPI-U for the previous taxable year.

The bill reduces the corporate income tax from its current rate of six percent to five and one-half percent in 2018 and to five percent in 2019 and subsequent years and establishes subtractions from Virginia corporate taxable income for the amount of global intangible low-taxed income that is included in federal taxable income and the amount of business interest that is disallowed as a deduction from federal taxable income.

The bill provides that any additional revenues generated by the TCJA, beyond those revenues necessary to offset the reduction in revenues resulting from the provisions of the bill, shall be transferred to the Tax Policy Fund, created by the bill, to be used to provide tax reform to Virginia taxpayers starting in fiscal year 2020. The bill contains an emergency clause.

EMERGENCY

S.B. 1471 Computation of composite index; land-use assessment value.

Patron: Hanger

Education; computation of composite index; land-use assessment value. Requires the General Assembly to modify the current standards of quality funding formula and the calculation of composite index of local ability to pay to incorporate within the real estate indicator of local wealth the land-use assessment value for those properties located within a land-use plan.

S.B. 1500 Remote sales & use tax collection; sufficient activity by dealers & marketplace facilitators, etc.

Patron: Hanger


Remote sales and use tax collection; sufficient activity by dealers and marketplace facilitators as to require registration for sales and use tax collection. Directs the Department of Taxation (the Department) to require a remote seller to collect sales and use tax if the seller has more than $100,000 in annual gross revenue from sales in Virginia or at least 200 sales transactions in Virginia and requires a marketplace facilitator, which enables marketplace sellers to sell in Virginia through its marketplace, to collect sales and use tax if its annual gross revenue from facilitated sales in Virginia exceeds $100,000 or it facilitates at least 200 sales transactions in Virginia. The bill provides that the obligation of remote sellers and marketplace facilitators to collect sales and use tax shall not apply to transactions occurring before July 1, 2019.

The bill provides that in administering remote sales and use tax collection, the Department shall provide information to remote sellers to allow them to identify state and local tax rates and exemptions. For auditing purposes, the Department is directed to allow a remote seller to complete a single audit covering all localities. The bill requires the Department to give remote sellers at least 30 days' notice of any change in tax rate.

The bill provides that if a remote seller or marketplace facilitator collects an incorrect amount of tax, it shall be relieved of liability for failure to collect the correct amount if the error is the result of its reliance on information provided by Virginia. The bill also relieves a marketplace facilitator of liability if it collects an incorrect amount of tax based on certain incorrect information provided by a seller or purchaser.

The bill repeals several contingent provisions of previous related bills that would take effect if the United States Congress enacted legislation related to remote sales and use tax collection. The bill contains technical corrections.

S.B. 1531 Virginia taxable income; equalizes standard deduction with the federal standard deduction.

Patron: Sturtevant

Virginia taxable income; standard deduction. Equalizes the Virginia standard deduction with the federal standard deduction. For taxable years beginning on and after January 1, 2018, but before January 1, 2019, the amount of the standard deduction shall be $12,000 per taxpayer or $24,000 for married persons filing jointly. In future tax years, the deduction will be adjusted by a percentage equal to the difference in the Chained Consumer Price Index for All Urban Consumers between the current year and 2018. The bill contains an emergency clause.

EMERGENCY

S.B. 1572 Virginia taxable income; threshold for filing return.

Patron: Norment

Virginia taxable income; threshold for filing return. Raises the minimum threshold for filing a Virginia tax return to $15,000 for an individual and $30,000 for married persons filing jointly, for taxable years beginning on or after January 1, 2019. Under current law, the minimum threshold for filing a Virginia tax return is $11,950 for an individual and $23,300 for married persons filing jointly for taxable years beginning on and after January 1, 2012.

S.B. 1601 Sales and Use Tax; remote collection, marketplace facilitators, etc.

Patron: Norment

Remote sales and use tax collection. Requires certain marketplace facilitators and marketplace sellers, defined in the bill, to collect and remit sales and use tax if such facilitators or sellers make sales of tangible personal property or taxable services for delivery in the Commonwealth exceeding $100,000 or in 200 or more separate transactions. The bill provides that facilitators and sellers may enter into agreements regarding the fulfillment of the collection requirements. The bill prohibits class action from being brought against a marketplace facilitator on behalf of customers for overpayment of sales and use tax collected by the marketplace facilitator. The bill provides that the sales and use tax collection requirements shall not apply to any sales transactions occurring before July 1, 2019.

S.B. 1617 Tech Talent Investment Program and Fund; created, report.

Patron: Ruff

Tech Talent Investment Program. Creates a grant program to assist qualified public institutions of higher education, defined in the bill, in reaching, by 2039, a goal of increasing, in the aggregate, the number of bachelor's and master's degrees awarded in computer science, computer engineering, and closely related fields by at least 25,000 degrees. To be eligible for an annual grant, a qualified institution is required to enter into a memorandum of understanding setting forth specific criteria for eligible degrees, eligible expenses, and degree production goals. The bill requires qualified institutions that are grant recipients to report annually on progress towards meeting such goals and that grants issued pursuant to the program are subject to appropriation.

S.B. 1630 Income tax, state; refunds for married persons filing a joint return.

Patron: Norment

Income tax; refunds. Entitles an individual to a tax refund equal to $150, or $300 for married persons filing a joint return. An individual will only be eligible for the credit if his tax liability after the application of deductions, subtractions, and credits exceeds $150, or for married persons filing jointly if their tax liability exceeds $300. The refund would apply to taxable years beginning on and after January 1, 2018, but before January 1, 2026. The bill contains an emergency clause.

EMERGENCY

S.B. 1631 Virginia income tax; advances conformity of Commonwealth's tax code with federal tax code.

Patron: Dunnavant


Virginia income tax; emergency. Advances conformity of the Commonwealth's tax code with the federal tax code to December 31, 2018, starting with taxable year 2018. The bill increases, starting with taxable year 2018, the amount of the standard deduction (i) from $3,000 to $6,000 for an individual or for married persons filing separately and (ii) from $6,000 to $12,000 for married persons filing jointly. Starting in 2019, the bill adjusts Virginia's standard deduction by the percentage increase in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the previous taxable year. In taxable year 2026, the standard deduction would return to $3,000 for an individual or a married person filing jointly and $6,000 for married persons filing jointly, coincident with the expiration of the individual income tax provisions of the federal Tax Cuts and Jobs Act (TCJA). Beginning in taxable year 2020, the individual tax brackets and the personal deductions will also be adjusted by the percentage increase of the C-CPI-U for the previous taxable year.

The bill reduces the corporate income tax from its current rate of six percent to five and one-half percent in 2018 and to five percent in 2019 and subsequent years and establishes subtractions from Virginia corporate taxable income for the amount of global intangible low-taxed income that is included in federal taxable income and the amount of business interest that is disallowed as a deduction from federal taxable income.

The bill provides that any additional revenues generated by the TCJA, beyond those revenues necessary to offset the reduction in revenues resulting from the provisions of the bill, shall be transferred to the Tax Policy Fund, created by the bill, to be used to provide tax reform to Virginia taxpayers starting in fiscal year 2020. The bill contains an emergency clause.

EMERGENCY

S.B. 1657 Income tax, state; taxpayer relief individual tax credit.

Patron: McDougle

Taxpayer relief income tax credit. Creates a nonrefundable tax credit of $250 for individuals and $500 for married persons filing a joint return. The credit is available for taxable years 2018 through 2025 and is available only to taxpayers who elected to take the standard deduction on their federal tax returns. The bill contains an emergency clause.

EMERGENCY

S.B. 1697 Income tax, corporate; subtraction for amount of business interest.

Patron: Chafin

Corporate income tax subtraction; business interest. Establishes a subtraction from a corporation's Virginia taxable income for the amount of business interest that is disallowed as a deduction from federal taxable income by § 163(j) of the Internal Revenue Code.

S.B. 1698 Income tax, corporate; subtraction for amount of Global Intangible Low-Taxed Income.

Patron: Chafin

Corporate income tax subtraction; Global Intangible Low-Taxed Income. Establishes a subtraction in computing Virginia taxable income for the amount of Global Intangible Low-Taxed Income that is included in a corporation's federal taxable income.

S.B. 1739 Income tax; conformity of tax code to federal code.

Patron: Newman

Income tax; emergency. Advances conformity of the Commonwealth's tax code with the federal tax code to December 31, 2018, including conformity to the federal Tax Cuts and Jobs Act. The bill also directs any revenues collected by the Commonwealth as a result of the policy changes in the Tax Cuts and Jobs Act be deposited into the Taxpayer Relief Fund, created by the bill. The Department of Taxation is directed to issue refunds on a pro rata basis to taxpayers who filed returns in the immediately preceding taxable year based on the amount of revenues deposited in the Fund. The revenue collection and refund would remain in place through taxable year 2026, the year the individual taxpayer changes in the Tax Cuts and Jobs Act are set to expire. The bill contains an emergency clause.

EMERGENCY

S.B. 1744 Income tax, state; increases standard deduction.

Patron: Wagner

Virginia taxable income; standard deduction. Increases the standard deduction to $4,000 for individuals and $8,000 for married persons filing joint returns for taxable year 2018. The bill contains an emergency clause.

EMERGENCY

S.B. 1767 Remote sales & use tax collection; sufficient activity by remote sellers & marketplace facilitators.

Patron: Wagner


Remote sales and use tax collection and sufficient activity by remote sellers and marketplace facilitators as to require registration for sales and use tax collection. Directs the Department of Taxation (the Department) to require a remote seller to collect sales and use tax if the seller has more than $250,000 in annual gross revenue from sales in Virginia and requires a marketplace facilitator, which enables marketplace sellers to sell in Virginia through its marketplace, to collect sales and use tax on any sales facilitated in the Commonwealth. The bill provides that the obligation of remote sellers and marketplace facilitators to collect sales and use tax shall not apply to transactions occurring before July 1, 2019.

The bill provides that in administering remote sales and use tax collection, the Department shall provide information to remote sellers to allow them to identify state and local tax rates and exemptions. For auditing purposes, the Department is directed to allow a remote seller to complete a single audit covering all localities. The bill requires the Department to give remote sellers at least 30 days' notice of any change in tax rate.

The bill provides that upon written application and for good cause shown, the Department shall have the discretion to temporarily suspend or delay the collection or reporting requirements of a marketplace facilitator or remote seller seller for a period not to exceed 184 days after collection is required. The Department is directed to implement protections from penalties and interest for marketplace facilitators that act in good faith but collect an incorrect amount of sales and use tax before January 1, 2026.

The bill repeals several contingent provisions of previous related bills that would take effect if the United States Congress enacted legislation related to remote sales and use tax collection. The bill contains technical corrections.