Net investment income tax; imposes a tax on individuals, trusts, and estates.
<p class=ldtitle>A BILL to amend the Code of Virginia by adding in Title 58.1 a chapter numbered 3.1, consisting of sections numbered 58.1-541 and 58.1-542, relating to net investment income tax.</p>
Taxes
Enacted
This bill passed the Legislature and reached final enactment based on the latest official action.
Sponsor
Bennett-Parker
Last action
2026-02-18
Official status
Failed
Effective date
Not listed
Plain English Breakdown
The bill text excerpt does not provide specific details about the tax rate calculation beyond what is mentioned in the summary.
Net Investment Income Tax Law
This law creates a new tax on investment income for individuals, trusts, and estates starting in 2027.
What This Bill Does
Creates a net investment income tax that applies to individuals, trusts, and estates beginning in taxable year 2027.
The tax rate is set at 3.8 percent of the lesser amount between net investment income or federal modified adjusted gross income minus $500,000.
Who It Names or Affects
Individuals who earn investment income
Trusts that have investment income
Estates with investment income
Terms To Know
Net Investment Income
The total income from investments after subtracting certain expenses and losses.
Federal Modified Adjusted Gross Income
A person's adjusted gross income as reported to the IRS, with some modifications.
Limits and Unknowns
Does not specify how the tax will be collected or enforced.
The exact details of what counts as net investment income are defined in the bill but are complex and may require further explanation.
Amendments
These notes stay tied to the official amendment files and metadata from the legislature.
Plain English: The amendment inserts a new clause in the bill that allows for an exception to certain tax provisions.
Adds language after line 35 to include 'in this section' where previously unspecified.
Inserts text after line 36, adding 'notwithstanding the provisions of § 58.1-301', allowing a specific exemption or exception.
The exact nature and impact of the exception provided by '§ 58.1-301' are not detailed in this amendment text, making it unclear how this will affect the overall bill.
Plain English: The amendment adds a new clause to an existing bill that imposes a tax on net investment income for individuals, trusts, and estates.
Adds a new clause after line 35 of the original bill text.
Inserts language stating 'in this section' right after the year 2026 in the amendment.
The exact impact of inserting 'notwithstanding the provisions of § 58.1-301' is unclear without additional context about what § 58.1-301 entails.
The technical nature and incomplete information provided make it difficult to fully explain all implications.
Bill History
2026-02-18House
Left in Committee Education
2026-02-18House
Left in Finance
2026-02-02Subcommittee #1
House subcommittee offered
2026-02-02Subcommittee #1
Subcommittee recommends laying on the table (10-Y 0-N)
2026-02-01House
Fiscal Impact statement From TAX (2/1/2026 10:04 am)
2026-01-12House
Prefiled and ordered printed; Offered 01-14-2026 26103780D
2026-01-12Finance
Referred to Committee on Finance
Official Summary Text
Net investment income tax.
Imposes a net investment income tax on individuals, trusts, and estates beginning in taxable year 2027. The tax is generally equal to 3.8 percent of the lesser of (i) net investment income, defined in the bill, for the taxable year or (ii) federal modified adjusted gross income, defined in the bill, for such taxable year reduced by $500,000.
Current Bill Text
Read the full stored bill text
HB 378
SUBCOMMITTEE
1. Line 35, introduced, after
Code"
insert
in this section
SUBCOMMITTEE
1. Line 36, introduced, after
2026
insert
, notwithstanding the provisions of §
58.1-301