Income tax, corporate; sourcing of sales, other than sales of tangible personal property.
<p class=ldtitle>A BILL to amend and reenact §§ 58.1-416, as it is effective and as it may become effective, 58.1-422.4, and 58.1-422.5, as it may become effective, of the Code of Virginia and to repeal the third enactment of Chapter 256 and the third enactment of Chapter 257 of the Acts of Assembly of 2022, relating to corporate income tax; sourcing of sales other than sales of tangible personal property.</p>
HousingTaxes
Enacted
This bill passed the Legislature and reached final enactment based on the latest official action.
Sponsor
McNamara
Last action
2026-02-12
Official status
Continued
Effective date
Not listed
Plain English Breakdown
The official source material does not provide specific details on updates to existing laws or an exact effective date for the bill's implementation.
Corporate Income Tax Changes for Sales
This bill changes how Virginia calculates corporate income tax by using a market-based approach to attribute sales other than tangible personal property to the state starting from taxable year 2027.
What This Bill Does
Changes how corporations are taxed in Virginia based on where their sales happen, not just physical goods.
Applies this new method for taxable years beginning after December 31, 2026.
Who It Names or Affects
Corporations that do business in Virginia and earn income from sales other than tangible personal property.
Terms To Know
Market-based sourcing
A method of determining where a company's income is earned based on the location of its customers or users, rather than just physical goods sold.
Taxable year
The period used for calculating and paying taxes, usually one calendar year but can vary depending on the tax laws.
Limits and Unknowns
Does not specify how sales of tangible personal property will be taxed.
Effective date is not clearly stated in the provided information.
Amendments
These notes stay tied to the official amendment files and metadata from the legislature.
Plain English: The amendment modifies sections related to corporate income tax by adding specific rules for sourcing sales from rental, lease, or license of tangible personal property located in Virginia.
Adds a new rule that when a company rents, leases, or licenses tangible personal property within the Commonwealth of Virginia, the income generated is sourced based on where the property is located.
The exact impact and application of this amendment are not fully detailed in the provided text.
It's unclear how this change will interact with existing rules for sourcing sales other than tangible personal property.
Bill History
2026-02-12House
House committee offered
2026-02-11House
House committee offered
2026-02-11Finance
Continued to 2027 in Finance (Voice Vote)
2026-02-08House
Fiscal Impact statement From TAX (2/8/2026 2:03 pm)
2026-02-05Subcommittee #1
Assigned HFIN sub: Subcommittee #1
2026-01-13House
Prefiled and ordered printed; Offered 01-14-2026 26101765D
2026-01-13Finance
Referred to Committee on Finance
Official Summary Text
Corporate income tax; sourcing of sales, other than sales of tangible personal property.
Implements market-based corporate income tax sourcing for attributing sales, other than sales of tangible personal property, to Virginia, beginning with taxable year 2027.
Current Bill Text
Read the full stored bill text
HB 609
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In the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in the Commonwealth;
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In the case of rental, lease, or license of tangible personal property, if and to the extent the property is located in the Commonwealth;
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