Virginia HB 551: Income tax, Corporate; apportionment of income using single sales factor method.

Bill Text

2024SESSION
INTRODUCED
24103605D
1HOUSEBILLNO.551
2OfferedJanuary10,2024
3PrefiledJanuary9, 2024
4ABILLtoamendandreenact§  58.1-408oftheCodeofVirginia,relatingtocorporateincometax;
5apportionment.
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Patron––McNamara
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8ReferredtoCommitteeonFinance
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10Beit enactedbytheGeneralAssemblyofVirginia:
111.That§ 58.1-408oftheCodeofVirginiaisamendedandreenactedasfollows:
12§ 58.1-408.Whatincomeapportionedandhow.
13A.TheVirginiataxableincomeofanycorporation,exceptthosesubjecttotheprovisionsof
14§58.1-417,58.1-418,58.1-419,58.1-420,58.1-422,58.1-422.1,58.1-422.2,or58.1-422.3,excluding
15incomeallocableunder§ 58.1-407,shallbeapportionedtotheCommonwealthasfollows:
161.Exceptasprovidedinsubdivision2,bymultiplyingsuchincomebya  fraction,thenumeratorof
17whichisthepropertyfactorplusthepayrollfactor,plustwicethesalesfactor,andthedenominatorof
18whichisfour;however,wherethesalesfactordoesnotexist,thedenominatorofthefractionshallbe
19thenumberofexistingfactorsandwherethesalesfactorexistsbutthepayrollfactorortheproperty
20factordoesnotexist,thedenominatorofthefractionshallbethenumberofexistingfactorsplusone.
212.FortaxableyearsbeginningonandafterJanuary1,2024,bymultiplyingsuchincomebythe
22salesfactor.However,theprovisionsofthissubdivisionshallapplyonlyifthetaxpayermakesan
23electiontoapportionitsincomeusingthesalesfactoralone.Ifthetaxpayermakessuchelection,the
24taxpayermaynotrevoketheelectionfora  periodofthreetaxableyears.Ifthetaxpayerdoesnotmake
25suchanelection,itsincomeshallbeapportionedpursuanttosubdivision1.
26B.Anyeligiblecompany,asdefinedin§58.1-405.1,maysubtractfromthenumeratorofthe
27correspondingfactorthevalueofits(i)propertyacquiredinanyqualifiedlocalityorqualifiedlocalities,
28asdefinedin§58.1-405.1,onorafterJanuary1,2018,butbeforeJanuary1,2025;(ii)payroll
29attributabletojobscreatedonorafterJanuary1,2018,butbeforeJanuary1,2025,inanyqualified
30localityorqualifiedlocalities;and(iii)salesintheCommonwealthduringthetaxableyear.Sucheligible
31companymaymakesuchmodificationforthetaxableyearinwhichit  firstbecomeseligibleandforthe
32sixsubsequent,consecutivetaxableyears,exceptforanyyearinwhichtheeligiblecompany's(a)total,
33cumulativenewcapitalinvestmentfallsbelowtheapplicableinitialthresholdor(b)numberofnewjobs
34fallsbelowtheapplicableinitialthreshold.
INTRODUCED
HB551
2/2/24
10:33