Andy Doernen/Newsradio WRVA

Emergency Tax Relief Bill Approved

Lawmakers send emergency legislation to governor that will increase the standard deduction

February 12, 2019 - 2:24 pm
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Richmond, VA _  The Virginia House of Delegates and the Senate of Virginia have overwhelmingly approved legislation that will provide nearly $1 billion in tax relief to Virginia’s taxpayers.

The legislation will provide $420 million to Virginia taxpayers later this year, in the form of tax rebates of $110 for individual filers and $220 for married couples.  It raises the standard deduction by fifty percent beginning in tax year 2019, the first such change for individual filers since 1989. The bill also maintains the current rules for state and local taxes (SALT), and includes key provisions for job creating businesses.

In total, the legislation will guarantee at least $976 million in tax relief and ensure that all additional revenues from the permanent provisions of federal Tax Cuts and Jobs Act are placed in the state’s cash reserve fund.  The legislation also conforms Virginia tax law to the federal law, ensuring Virginians will be able to file their state taxes without complications this May.

House Bill 2529, sponsored by House Republican Caucus Chairman Timothy D. Hugo (R-Fairfax), was approved by votes of 95 to 4 in the House and 35 to 5 in the Senate.  Senate Bill 1372, sponsored by Senate Majority Leader Thomas K. Norment, Jr. (R-James City), was approved by votes of 95 to 4 in the House and 38 to 2 in the Senate.  The identical bills were approved as “emergency” legislation, allowing their provisions to become effective as soon as they are signed by the Governor.

“The passage of these bills is the culmination of weeks of negotiations by lawmakers committed to delivering the most for Virginia taxpayers,” noted Senator Norment, Co-Chairman of the Senate Finance Committee.  “This would not have happened without a clear vision for a simple, direct plan that could earn the support of the both parties, both chambers, and the Administration. Delegates and senators, Democrats and Republicans, worked together to approve a major legislative achievement that was unforeseeable even a few weeks ago.”

 

Who is Affected and How?

Over 4 million Virginia taxpayers will directly benefit

Those making less than $50,000 will receive 40% of all rebate checks

Those making $100,000 or less will receive more than 70% of all rebate checks

Married couple will receive an average of $392 in tax relief over the next two years

Key Provisions of House and Senate Tax Relief Plan

Returns all $976 million from increased individual provisions of TCJA

Provides a tax refund in October 2019, $110 for individuals and $220 for couples

Increases the standard deduction by 50% to $4,500 for an individual and $9,000 for a couple

Maintains current state law on State and Local Taxes, preventing a double tax hike on homeowners

Includes subtraction modification for Global Intangible Low-taxed Income (GILTI)

Includes deduction for 20% of net interest expenses

Places $189 million in Taxpayer Relief Fund