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2019 SESSION
19105786DBe 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;
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"; and
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 apply to taxable years beginning on and after January 1, 2018.
[ 4 3. ] That for fiscal years 2019 and 2020, any
additional revenues generated as a result of the temporary individual income
tax provisions of the federal Tax Cuts and Jobs Act, P.L. 115-97 (2018), that
expire before January 1, 2026, shall be transferred to a special nonreverting
fund hereby established and to be known as the Taxpayer Relief Fund. It is
estimated that for fiscal year 2019, such additional revenues shall total
$517.9 million and that for fiscal year 2020, such additional revenues shall
total $434.4 million. Before August 1, 2019, the Department of Taxation shall
submit a plan, to be considered by the General Assembly during any special or
regular session beginning prior to January 8, 2020, to appropriate and refund
such revenues to affected taxpayers that experienced an increase in Virginia
taxes as an indirect result of the provisions of the federal Tax Cuts and Jobs
Act. It is the intent of the General Assembly that any funds in the Taxpayer
Relief Fund shall be used only for the purpose of providing relief to affected
taxpayers in the Commonwealth as described in this enactment.