2023 General Assembly Session

Taxation Related Legislation

2023 General Assembly Bill Report

Taxation Related Legislation

Fairfax County Public Schools, Office of Government Relations

This report describes all the Taxation related legislation considered during the 2023 General Assembly Session. 

Legislation signed by the Governor will go into effect on July 1, 2023 unless otherwise specified in the legislation itself.

Summaries are linked to the Division of Legislative Services’ web pages for text, up to date summary information, and fiscal impact statements. If a bill of interest is not found in one category, please check another as legislation often can fit under multiple categories.

UPDATED: 04/20/2023

 

Taxation – Passed

N/A

 

Taxation – Failed

Sales Tax; Exemption for Food Purchased for Human Consumption and Essential Personal Hygiene Products HB 1484 (McNamara), HB 1686 (Greenhalgh), and SB 850 (Suetterlein) would have provided an exemption from local sales and use tax beginning July 1, 2023, for food purchased for human consumption and essential personal hygiene products. The bills would have also provided an allocation of state revenues to fund the distribution to localities for funding that would have been distributed to them absent the exemption created by the bill.

Additional Local Sales and Use Tax to Support Schools; Referendum HB 2316 (Bourne) and SB 1408 (McClellan/McPike) would have authorized all counties and cities to impose an additional local sales and use tax at a rate not to exceed one percent with the revenue used only for capital projects for the construction or renovation of schools if such levy is approved in a voter referendum. Under current law, only Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick, and Pittsylvania Counties and the City of Danville are authorized to impose such a tax. The bill was a recommendation of the Commission on School Construction and Modernization.  HB 1605 (Edmunds) would have added Prince Edward County to the list of localities that are authorized to impose an additional local sales and use tax at a rate not to exceed one percent with the revenue used only for capital projects for the construction or renovation of schools.  HB 2442 (Price) would have added the City of Newport News to the list of localities that, under current law, are authorized to impose an extra one percent local sales tax to provide revenue for constructing or renovating schools. SB 1287 (Deeds) would have added Albemarle County and the City of Charlottesville to the list of qualifying localities that, under current law, are authorized to impose an additional local sales and use tax at a rate not to exceed one percent, with the revenue from such tax used only for capital projects for the construction or renovation of schools.

Income Tax Deduction; Teaching Materials HB 2065 (Lopex) would have created a tax deduction beginning taxable year 2023 for up to $500 of teaching materials purchased by a licensed teacher and used to teach Virginia students enrolled in a public institution of higher education as defined by Virginia Code.

Individual Income tax; Distribution of Revenues; Local School Construction HB 2176 (Sickles) would have required distribution of five percent of the individual income tax revenues collected from residents of a locality to be distributed to that locality. The bill would have required such funds to be used for school construction or renovation purposes and to be repaid to the state if used for any other purpose. The bill would have provided that a locality be required to maintain its level of expenditure for public school purposes as a condition of receiving the income tax revenues; however, a locality could reduce its level of expenditure to account for a loss of revenues resulting from a reduction in machinery and tools taxes.

Home Instruction and Private School Tax Credit HB 2480 (LaRock) would have created a nonrefundable tax credit for taxable years 2023 through 2027 for parents or legal guardians of a child who is homeschooled or attends a private school in Virginia. The bill would have provided that the credit would have been equal to the lesser of half of the average state Standards of Quality funding per student per year or the costs incurred for instruction-related materials, courses or programs used in home instruction, or private school tuition and is limited to 1,000 children selected by an application and lottery process developed by the Department of Education. Any savings resulting from the credit of less than a student's full state Standards of Quality funding to an individual or married couple would have been deposited into the School Construction Fund.

Education Improvement Scholarships; Expands Tax Credit Program HB 1821 (Avoli) and SB 1360 (Norment) would have expanded the education improvement scholarships tax credit program for taxable years 2023 through 2027 by increasing from 65 percent to 100 percent the credit amount for the value of the monetary or marketable securities donation made by the person to an included scholarship foundation,  removing the requirement that eligible pre-kindergarten children be at-risk four-year-olds unable to obtain services through Head Start or Virginia Preschool Initiative programs, requiring that nonpublic pre-kindergarten programs participate in the Unified Virginia Quality Birth to Five System (VQB5), rather than the Virginia Quality rating system, and expanding eligible students to include any school-aged child living in Virginia whose family income does not exceed 300 percent of federal poverty guidelines, regardless of prior public school enrollment or a recent move to Virginia.

Income Tax Credits; Neighborhood Assistance Act; Education Improvement Scholarships HB 2431 (Moorefield) and SB 1506 (Ruff) would have made several amendments to expand the availability of the Neighborhood Assistance Act Tax Credit and Education Improvement Scholarships Tax Credits (EISTC). The bill would have made subject to judicial appeal the decisions of the Department of Education and the Department of Social Services regarding the qualification of a scholarship foundation or the awarding of tax credits; currently, such decisions are final. The bill would have provided that the annual allocation of tax credits among neighborhood organizations shall not rely solely on the amount of credits awarded in the previous year. For the EISTC, the bill would have allowed certified public accountants to receive tax credits for donations of accounting services to scholarship organizations. The bill would have also authorized scholarship foundations, which are the sole recipient of funding from the issuance of EISTC, to receive funding for scholastic assistance, defined in the bill as counseling or supportive services.

Constitutional Amendment (first reference); Personal Property Tax; Exemption for Motor Vehicles Owned for Personal, Noncommercial Use HJ 462 (Anderson) would have required the General Assembly to exempt from personal property taxes motor vehicles owned by an individual for personal, noncommercial use. For purposes of the exemption, "motor vehicle" includes only automobiles, pickup trucks, and motorcycles. The amendment would have provided that the exemption would have been applicable on the date the motor vehicle is acquired or the effective date of the amendment, whichever would have been later, but would not have been applicable for any period of time prior to the effective date.

Education Improvement Scholarships Tax Credits; Student Definition SB 892 (Newman) would have provided that beginning in taxable year 2024, students eligible for a scholarship from an approved scholarship foundation shall include any school-aged child living in Virginia whose family income does not exceed 300 percent of federal poverty guidelines, regardless of prior public school enrollment or a recent move to Virginia.

Education Improvement Scholarships Tax Credits; Transferability SB 893 (Newman) would have allowed a taxpayer entitled to an education improvement scholarships tax credit to transfer such credit to any other taxpayer. 

Local Sales and Use Tax; Exemptions SB 1008 (DeSteph) would have authorized the governing board of a city or county to, by ordinance, exempt food purchased for human consumption and essential personal hygiene products from local sales and use tax.