2020 General Assembly Session
Taxation Related Legislation
2020 General Assembly Summary
Taxation Related Legislation
Fairfax County Public Schools, Office of Government Relations
This report describes all of the Taxation-related legislation considered during the 2020 General Assembly Regular Session. Bills are listed in one of three categories: Approved, Continued to 2021, or Failed.
Approved legislation goes into effect on July 1, 2020 unless otherwise specified in the legislation itself.
Bills designated as “Continued to 2021” are effectively “Failed” for purposes of the 2020 Session, but can still be acted upon by the Committee that recommended continuing the legislation prior to the 2021 Session (by December 3, 2020). Even if a bill were to be acted upon prior to that deadline (which rarely occurs), it would still have to proceed through the remainder of the legislative process (pass in both chambers, signed by the Governor) during the 2021 Session.
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: March 30, 2020
TAXATION - PASSED
Virginia Lottery Board; Regulation of Electronic Gaming Devices HB 881 (Bulova) and SB 971 (Howell) include the playing or offering for play of any skill game in the definition of "illegal gambling." The bills also include skill games within the definition of "gambling devices." The bills defines a "skill game" as an electronic, computerized, or mechanical contrivance, terminal, machine, or other device that requires the insertion of a coin, currency, ticket, token, or similar object to operate, activate, or play a game, the outcome of which is determined by any element of skill of the player and that may deliver or entitle the person playing or operating the device to receive cash; cash equivalents, gift cards, vouchers, billets, tickets, tokens, or electronic credits to be exchanged for cash; merchandise; or anything of value whether the payoff is made automatically from the device or manually. The bills exempt family entertainment centers from the prohibition against the playing or offering of any skill game, provided the prize won or distributed to a player by the skill games offered by such centers is a noncash, merchandise prize or a voucher, billet, ticket, token, or electronic credit redeemable only for a noncash, merchandise prize that also meets certain other requirements. SB 971 incorporates SB 908 (Norment) and SB 909 (Norment).
Locally Adopted Sales and Use Tax, School Construction the following series of bills authorize various localities to impose an additional local sales and use tax at a rate not to exceed one percent, as determined by the governing body to be used solely for capital projects for new construction or major renovation of schools: HB 200 (Wright) and SB 943 (Ruff) Mecklenburg County; HB 486 (Marshall) Henry County, Northampton County, Patrick County, Pittsylvania Counties and the City of Danville; HB 1631 (Edmunds) Charlotte County; SB 224 (Norment) Gloucester; and SB 1028 (Lewis) Northampton County.
Local Taxing Authority HB 785 (Watts) and SB 588 (Hanger) modify or eliminate several restrictions that apply to taxes imposed by counties, and establishes a new restriction on cigarette taxes imposed by any locality. The bill authorizes most counties to impose an admissions tax, not to exceed a ten percent rate. Under current law, only certain counties may impose an admissions tax. The bills eliminate the limit on the rate of transient occupancy tax that a county may impose. The bills require that any revenue attributable to a rate over two percent but not exceeding five percent must be dedicated to tourism marketing. Under current law, all counties may impose a transient occupancy tax of up to two percent, and certain counties may impose it up to a higher maximum rate. The bills authorize any county to impose a cigarette tax up to a maximum rate of 40 cents per pack and provide that any locality that imposes such tax at a rate higher than 40 cents per pack may not increase such rate. Under current law, only certain counties may impose a cigarette tax, and cities and towns may impose such tax with no limit on the rate. The bills authorize any county to impose a food and beverage tax of up to six percent and eliminates the requirement that a county hold a referendum before imposing such tax. However, in jurisdictions that held a referendum pursuant to § 58.1-3833 of the Code of Virginia prior to July 1, 2020, that was defeated may only impose a food and beverage tax six years after the date of such referendum. Under current law, all counties may impose the tax after a referendum but the rate may not exceed four percent. The provisions related to the cigarette tax have a delayed effective date of July 1, 2021.HB 785 incorporates HB 977 (Krizek) and SB 588 incorporates SB 484 (Favola), SB 921 (Locke), SB 682 (Mason) and SB 799 (Lewis).
TAXATION – CONTINUED TO 2021
Constitutional Amendment; Real Property Tax Exemption for Affordable Housing (first reference) HJ 2 (Bourne) would provide that the General Assembly may authorize a locality to fully or partially exempt affordable housing, as such term may be defined by statute, from real property taxation.
Education Improvement Scholarships Tax Repealing Tax Credit HB 521 (Bulova) would repeal the Education Improvement Scholarships Tax Credits. Any qualifying donations made prior to July 1, 2020, would be eligible for the credit, including the ability to carry over the credit, as it was in effect on June 30, 2020.
Electronic Gaming Machines; Municipal Taxation HB 1708 (Tyler) would authorize any city or town that has general taxing authority under the Uniform Charter Powers Act to impose a tax at a rate not to exceed 10 percent of the amount paid to play an electronic gaming machine, as defined in the bill.
Firearms and Ammunition; Imposes Additional Sales and Use Tax, Use of Proceeds HB 960 (Levine) would impose an additional sales and use tax on the retail sale of firearms and ammunition. The amount of the tax would be 10 percent minus the amount of tax imposed by all other sales and use taxes levied by the Commonwealth. Revenues from the tax would be deposited in the Student Mental Health and Safety Fund (the Fund), which is established by the bill. In addition to the Fund, the bill creates the Student Mental Health and Safety Program (the Program). The Program and Fund would be provided grants on a competitive basis to public school divisions for the purpose of funding full-time school counselor positions at a ratio of 250:1 or better, school social worker positions at a ratio of 400:1 or better, and school psychologists at a ratio of 500:1 or better.
Taxes on Tobacco Products; Penalties HB 1120 (Hope) would provide that tobacco products, defined in the bill, would be subject to tax at rates of $1.80 per pack of cigarettes or 39 percent of the wholesale price for all other tobacco products. Current law imposes taxes of $0.30 per pack of cigarettes, 10 percent of the wholesale price of certain tobacco products, and various weight-based rates that apply to moist snuff and loose-leaf tobacco. The bill would broaden the definition of "tobacco product" to include electronic smoking devices, which are not taxed under current law.
The bill would authorize all localities to tax all tobacco products with no restriction on the tax rate.
The bill would dedicate portions of revenue accruing as a result of the tax increases and new taxes established by the bill to the Department of Health for its costs related to Quit Now Virginia for the purpose of providing free information and coaching to residents who want to quit smoking or using tobacco; to the Virginia Foundation for Healthy Youth to fund initiatives to prevent or reduce youth tobacco use; the Department of Behavioral Health and Developmental Services to fund initiatives to educate merchants on the laws governing the sale of tobacco products; and to the general fund.
TAXATION – FAILED
Income Tax, State; Deduction for Primary and Secondary School Tuition or Home Instruction Expenses HB 158 (Cole, M.L.) would have provided an income tax deduction beginning in taxable year 2020 for education expenses incurred by the parent or guardian of a child under the age of 18. Qualifying education expenses for the deduction were defined in the bill as tuition for a primary or secondary school in the Commonwealth, or expenses directly related to the home instruction of children.
Income Tax Subtraction; Public School Teacher Salaries HB 1091 (Miyares) would have established for taxable years beginning on and after January 1, 2020, an income tax subtraction for any income from full-time employment as an elementary or secondary school teacher at a public school in the Commonwealth.
Tax credit for teaching material expenses SB 500 (Reeves) would have established an individual nonrefundable income tax credit of up to $250 for licensed teachers in taxable years beginning on or after January 1, 2020, but before January 1, 2025, for the purchase price of materials used in teaching public primary or secondary school students that were purchased during the taxable year, provided that such purchases were neither reimbursed nor claimed as a deduction on the teacher's federal income tax return.
Taxes on Tobacco Products SB 852 (Ebbin) would have provided that tobacco products, defined in the bill, would be subject to tax at rates of $1.80 per pack of cigarettes or 39 percent of the wholesale price for all other tobacco products. Current law imposes taxes of $0.30 per pack of cigarettes, 10 percent of the wholesale price of certain tobacco products, and various weight-based rates that apply to moist snuff and loose leaf tobacco. The bill would have broadened the definition of "tobacco product" to include electronic smoking devices, which are not taxed under current law. The bill would have authorized all localities to tax all tobacco products with no restriction on the tax rate. Under current law, cities may tax only cigarettes, and the Counties of Arlington and Fairfax may tax cigarettes at a rate no higher than the state rate. The bill would have dedicated portions of revenue accruing as a result of the tax increases and new taxes established by the bill to the Department of Health for its costs related to Quit Now Virginia for the purpose of providing free information and coaching to residents who want to quit smoking or using tobacco; to the Virginia Foundation for Healthy Youth to fund initiatives to prevent or reduce youth tobacco use; the Department of Behavioral Health and Developmental Services to fund initiatives to educate merchants on the laws governing the sale of tobacco products; and to the general fund.
Virginia Lottery Board; Regulation of the Manufacturing, Distributing, Operating Video Games; Penalties HB 903 (Sickles) and SB 348 (Lucas) would have authorized the manufacture, distribution, operation, hosting, and playing of dominant skill video games in the Commonwealth, to be regulated by the Virginia Lottery Board. The bill would have specified the licensing requirements for the manufacture, distribution, operation, and hosting of dominant skill video games and imposes criminal and civil penalties for violations of the law and regulations related to dominant skill video games. The bill would have imposed a 10 percent tax on all gross profits generated from the play of dominant skill video games and the sale of fills by distributor licensees to operator licensees and provides for how the tax proceeds are disbursed. The bill would have also established the Problem Gambling Treatment and Support Fund, administered by the Commissioner of Behavioral Health and Developmental Services to provide counseling and other support services for compulsive and problem gamblers, develop problem gambling treatment and prevention programs, and provide grants to support organizations that provide assistance to compulsive gamblers. HB 903 incorporated HB 1589 (Bagby).