McDonnell wants to reinstate employer tax deduction
- April 13, 2010
Gov. Bob McDonnell will propose reinstating a tax deduction for Virginia employers in the biennial budget.
Since 2004, Virginia law has allowed companies to receive an Internal Revenue Code Section 199 Domestic Production Activity Deduction, which was designed to boost U.S. manufacturing.
The General Assembly’s budget, which was passed in March, would phase out the deduction by 2014.
“Many states have chosen not to allow job-creators to take this deduction; Virginia should not be one of them,” McDonnell said in a statement. “I am asking the General Assembly to agree to our amendment allowing deductions of up to 6 percent of income attributable to domestic production activities. This is a pro-job creation amendment that will help keep employers in the commonwealth, encourage businesses to locate in Virginia and give us a further advantage over other states.”
The governor has until midnight Tuesday to send his amendments to the legislature. The General Assembly will consider his proposals at the veto session on April 21.