House and Senate Overwhelmingly Approve $1 Billion Tax Relief Package
Press release from the Virginia General Assembly….
The Virginia House of Delegates and the Senate of Virginia on Tuesday 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.
“I am proud of the hard work that has gone into crafting this bipartisan legislation that will put more money in the pockets of hard-working Virginians,” said Speaker of the House M. Kirkland “Kirk” Cox (R-Colonial Heights). “This legislation represents the most significant tax relief package in the Commonwealth in at least 15 years. I want to thank leaders on both sides of the aisle and in both chambers for the dedication they put into crafting this legislation.”
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.”
“From the very beginning, I have been clear that the excess money from the federal tax cuts was not ours to spend and should not be used to vastly increase the size of government,” said Delegate Hugo. “I am proud to have shepherded legislation that allows us to invest in key areas of government while still saying ‘no’ to a tax increase and ‘yes’ to allowing families to determine how to best spend their own money.”
“Four million Virginians will soon be the direct beneficiaries of the most substantial tax relief plan in a generation,” declared Senate President Pro Tempore Stephen D. Newman(R-Bedford). “This plan provides direct relief with tax rebates this year and lower taxes next year. We started this process with a commitment to give all of the revenue windfall from the federal tax law back to taxpayers. Today, we have sent a bill to the Governor that fulfills that commitment.”
House Finance Committee Chairman R. Lee Ware (R-Powhatan) noted, “The consideration for the General Assembly this year was simple. Do we retain – and spend – large revenues that our taxpayers did not approve, or do we return the funds to those from whom they were collected? Thankfully, we have made the just and prudent decision to give the money back to our taxpayers.”
“Providing tax relief while maintaining our commitment to responsible, conservative budgeting was essential to securing the overwhelming bipartisan support this plan received,” said Senate Finance Committee Co-Chairman Emmett W. Hanger, Jr. (R-Augusta). “With this plan, we can craft a budget that limits spending increases, maintains a low and sustainable rate of growth, and preserves our AAA bond rating.”
“This legislation will put money back in the pockets of every single person who pays income taxes to the Commonwealth of Virginia,” said House Appropriations Committee Chairman S. Chris Jones (R-Suffolk). “From the beginning of this process, it has been our goal to prevent a tax increase on taxpayers and this legislation accomplishes that.”
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
|Individual Provisions||FY 19||FY 20||Biennium|
|Revenue from TCJA Provisions||$532m||$444m||$976m|
|Immediate Tax Refund up to $110/$220 in October of 2019||$420m||–||$420m|
|Increase the standard deduction to $4,500/$9,000||–||$360m||$360m|
|Maintain Current SALT Rules||–||$56m||$56m|
|Subtraction Modification for GILTI||$7m||$5m||$12m|
|20% Net Interest Expense Deduction||$25m||$18m||$43m|
|De-conform from Suspension of Pease Limitation||–||-$104m||-$104m|
|Taxpayer Relief Fund||$80m||$109m||$189m|
|Total Tax Relief||$532m||$444m||$976m|