Virginia House Republicans built on their strong pro-taxpayer reforms in 2021 by passing even more income tax relief this year. The proposed legislation reduces Virginia’s top income tax rate from 5.75 percent to 5.5 percent, saving taxpayers more than $1 billion in its first two years. It would also increase Virginia’s standard deduction and lower Virginia’s effective business tax rate from 6 percent to 5 percent, saving Virginia businesses approximately $300 million annually. The bills would also allow for new deductions for small businesses, providing an estimated relief of more than $275 million over the next two years.
“Today, the House took a major step forward in our long-term effort to ensure that our Commonwealth remains an economic leader for generations to come,” said House Speaker C. Todd Gilbert (R-Shenandoah). “House Republicans want to put money back in taxpayers’ pockets, and that’s just a short-term benefit of these long-term improvements. By passing these two bills, we’re positioning Virginia for long-term economic growth.”
House Bill 2319 lowers rates and raises standard deductions, and House Bill 2138 lowers the corporate rate.
“Virginians are still overtaxed, they deserve to keep more of their hard-earned paychecks and today’s significant move by the House of Delegates means Virginians are one step closer to additional relief,” said Governor Glenn Youngkin “The reductions in the individual income tax mean 86% of taxpaying Virginians will enjoy the benefits of a lower tax rate and an additional 14,000 Virginians will pay no state income taxes. The reduction of tax rates for business will result in lower taxes for approximately 475,000 resident small business owners and local businesses across the Commonwealth. Reinvigorating Virginia’s tax structure will help make the Commonwealth competitive with other states so that we can compete to win. We proved last year, when Republicans and Democrats passed our $4 billion tax relief package for Virginians, tax cuts don’t have to be a partisan issue.”
Grover Norquist, President of Americans for Tax Reform released the following statement:
“I commend Governor Glenn Youngkin, Speaker Todd Gilbert, and House Republicans for taking this important step towards making Virginia an even better place to live, work, and raise a family. This pro-growth income tax cut is a huge win for all Virginians,” said Norquist. “By passing tax relief in two consecutive sessions, Virginia Republicans have made clear that they will continue to be taxpayer allies and that Virginia is open for business.”