Virginia House Bill HB106

Virginia 2022 Regular Session

• Introduced: 1/7/22
• Refer: 1/7/22

Caption

Income tax, state; rolling conformity, report.

Impact

The impact of HB106 on state law is considerable, as it seeks to modernize tax code alignment with federal standards. By automatically adopting federal tax changes, the bill intends to ensure that taxpayers are not penalized by differences in two overlapping systems. Additionally, it allocates responsibilities for monitoring these adaptations to the Secretary of Finance, ensuring ongoing oversight and consistent updates to state tax regulations in response to federal amendments.

Summary

House Bill 106 addresses state income tax by introducing rolling conformity to the Internal Revenue Code. This means that significant changes in federal tax regulations will automatically be incorporated into the state tax system unless explicitly overridden by state legislation. The bill aims to streamline the administration of state taxes by aligning more closely with federal guidelines, potentially simplifying compliance for taxpayers and minimizing discrepancies between state and federal tax obligations.

Contention

Points of contention surrounding HB106 primarily revolve around concerns regarding the automatic adoption of federal tax law changes without legislative oversight. Critics argue that this could reduce the state legislature's control over tax policy, potentially limiting its ability to tailor tax laws to the specific needs of Virginia residents. Proponents, however, contend that this conformity could enhance efficiency and clarity in the tax system, thereby potentially benefiting both taxpayers and state financial management.