News and Notes from the Virginia General Assembly
Tuesday, January 24, 2012
Important Session Dates
January 20 - Final date for bill submission
February 14 - Cross over day (each house completes work on its own legislation with the exception of the budget)
February 29 - Last day for each house to act on budget bills
March 5 - Last day for committee action on legislation
March 10 - Scheduled adjournment
April 18 - Reconvened (veto) session
Senator Frank Wagner has introduced SB 578 creating the Route 460 Corridor/Interstate 85 Connector Economic Development Zone to further the development and diversification of the Virginia economy through utilization of the Port of Virginia and the region’s commercial assets. The proposed legislation will permit tax credits of up to $25 million for qualified companies in these corridors.
Funds Included in Governor McDonnell’s Proposed Budget for Oceana Land Purchase
Governor Bob McDonnell proposed $7,500,000 in funding for matching grants to assist Virginia localities affected by the base realignment and closure process. Priority will be given to any locality in which a U.S. Navy Master Jet Base is located.
Total legislative campaign spending reached $60 million (down from $68 million four years ago). On average, it cost $620,000 for a Senate campaign and $188,000 for a House campaign. Fifteen state campaigns spent over $1 million.
Machinery and Tools
Delegate Bob Purkey introduced HB512. The bill would allow machinery and tools purchased on or after July 1, 2012 to be classified as intangible personal property for a period of three years. This property would not be subject to local taxation.
Delegate Manoli Loupassi Introduced HB105. The bill would allow machinery and equipment used in a manufacturing facility or plant unit that produces methane gas for sale through anaerobic digestion would be eligible for a tax credit.
License Tax Business Classifications and Tax Rates, local; Department of Taxation to study
Delegate Steven Landes introduced HJ4. The bill requires the Department of Taxation to study the local license tax business classifications and tax rates. The Department is to complete its work by November 30, 2012.
Corporate Income Tax
Senator John Watkins introduced SB49. The bill requires retail companies to use an apportionment formula for payment of income taxes by multiplying their income by the sales factor. The provisions of the bill would be effective beginning July 1, 2012, and would be phased in with the apportionment formula having a 100 percent sales factor by 2015.
SB78 was also introduced by Senator Watkins. The bill allows an entity that pays corporate income tax in Virginia based upon 100 percent of its sales to receive a tax credit equal to the amount of income tax paid in another state for sales in that state. The tax credit would apply to tax years beginning on or after January 1, 2012.
Senator William Stanley introduced a measure (SB61) that reduces the corporate income tax rate from 6% to 3% for the first 3 years after a business located outside Virginia opens a satellite office in a Virginia locality with a population of 200,000 or less or after a business located in a Virginia locality with a population exceeding 200,000 opens a satellite office or operation in a Virginia locality with a population of 200,000 or fewer, for taxable years beginning on or after January 1, 2012. The capital investment made by the corporation must be $250,000 or more and the tax reduction may not exceed the amount of that capital investment.
Senator William Stanley introduced SB69. The bill provides that eligibility for unemployment benefits is contingent upon the claimant's performance of at least 24 hours per week of volunteer service with a nonprofit charitable organization. This requirement does not apply during the first two weeks of eligibility. The Virginia Employment Commission may waive or alter the requirement in certain cases or situations.
IRS Conformity Legislation
There are currently four bills filed that pertain to conforming Virginia income tax laws with the Internal Revenue Code. Delegate Purkey’s bill (HB516) advances the date of conformity to December 31, 2011 and restores certain provisions, including the income tax credit for low-income taxpayers. This bill passed the House on Thursday (98-Y 2-N) and has been referred to the Senate Committee on Finance under the designation SB463 (Senator Walter Stosch).
Two other conformity bills, HB1153 (Delegate James Massie) and SB462 (Senator Walter Stosch), pertain to the Domestic Production Activities Deduction, § 199 of the Internal Revenue Code. Both bills allow for the entire amount of IRS deduction be deducted for Virginia income tax purposes for taxable years beginning on and after January 1, 2012. Both bills have been referred to their respective Committees on Finance.
Delegate Chris Stolle has filed HJ50 which requests the Virginia Institute of Marine Science to study strategies for adaptation to the rise in relative sea level in Tidewater Virginia localities. The bill has been referred to the House Committee on Rules.