Virginia Tax Conformity – PASSED
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The House and the Senate each had their own version of Tax Conformity bills this year. The main issue at hand was the cap amount for deductions of business expenses for the Paycheck Protection Program (PPP) Loans. Both bills, as passed the body of origin, allowed for a business that received a PPP loan to exclude the forgiven loan amount from their income, however each instilled a cap for maximum deduction to cover one’s business expenses related to their PPP Loans.
The Senate version created a $100,000 cap, while the House version only allowed a deduction up to $25,000. This issue came down to the end, where the conference committee ultimately decided to go with the Senate version: $100,000 cap with an Emergency Clause.
After this legislation is signed by the Governor, businesses will be eligible to deduct up to $100,000 of business expenses related to the PPP loan or Rebuild Virginia Loan. While we initially advocated for full deductibility, it was clear at the beginning Session that was not on the table. At that point, VRF along with a huge business coalition began to advocate for the $100,000 cap, which will allow full deductibility for 80% of Virginia Small Businesses that received a PPP loan.
HB 1935 - Watts - Income tax, state; conformity with the Internal Revenue Code. (Passed both the House and Senate and is on its way to the Governor for Signature – once signed, it will go into effect immediately due to the emergency clause)
SB 1146 - Howell - Income tax, state; conformity with the Internal Revenue Code (Passed both the House and Senate and is on its way to the Governor for Signature – once signed, it will go into effect immediately due to the emergency clause)
