Bill to remove unused tax credits from Virginia code
The House passed a bill Wednesday to eliminate 34 unclaimed tax credits from Virginia’s tax code.
The bill, SB 1296, introduced by Sen. Walter Stosch, R-Glen Allen, passed (92-6) after a debate on the floor. The bill will declare a tax credit “obsolete” if it hasn’t been claimed by any taxpayer for five years.
Citizens cannot claim tax credits that have been declared obsolete.
Del. Robert Bell, R-Charlottesville, questioned the intent and language of the bill, which was recommended 21-0 Monday from the Finance Committee.
In response, Del. James Massie, R-Henrico, said: “As a businessperson, if you have a product on your shelf and haven’t sold any in five years, that’s a pretty good indication. If you have a tax credit no one gives a rip about for five years, you should probably take them off the shelf.”
Bell’s concern, he said was that the people of Virginia would be unprepared.
“We’re not giving the individual the five years,” Bell said. “What if you’re in the fourth year and by no part of your own haven’t had any need for it, start to make plans and it goes away?”
Said Massie: “Any tax benefit we have that only one person in the commonwealth uses is unnecessary’
Del. Benjamin Cline, R-Lexington, said Bell had raised a good point.
“But I would hope someone looking to benefit (from a tax credit) would look into it and do their due diligence,” he said.
Del. Scott Survoll, D-Fairfax, said he fully supported the bill’s intent but was concerned about the mechanics.
“While we can put in a code that a tax credit is obsolete, in order to repeal a credit it has to be removed from the code,” he said. “How does the public find out?”
The Department of Taxation will report annually on credits that have become obsolete and post them on the website, Cassie said.
Speaking on behalf of the joint subcommittee and finance committee, Del. Mark Keam, D-Vienna, clarified the bill.
“The way I understand this to be, the code language will stay,” Keam said.
A commission would examine every bill and determine whether tax credits were valid based on research, he said.
“At that point someone would submit a bill to repeal, and this would notify the public,” Keam said.