HB 453 — Income tax, state; property information and analytics firms, business operations, definitions.

SESSION ENROLLED VIRGINIA ACTS OF ASSEMBLY ––-- 2022 SESSION CHAPTER E256 An Act to amend and reenact § 58.1-416 of the Code of Virginia and to amend the Code of Virginia by firms.adding a section numbered 58.1-422.4, relating to income tax;

aproperty sectioninformation numberedand 58.1-422.4,analytics relatingfirms. to income tax;

property information and analyRics O [H 453] L Approved LApril 8, 2022 Be it enacted by the General Assembly of Virginia:

E 1.

That § 58.1-416 of the Code of Virginia is amended and reenacted and that the Code of VirginDaVirginia is §amended 58.1-416.by adding a section numbered 58.1-422.4 as follows:

§ 58.1-416.

or 2.proportion of the income-producing activity is performed in the Commonwealth than in any other state, based on costs of performance.

The income-producing activity is performed both in and outside the Commonwealth and a greater proportion of the income-producing activity is performed in the Commonwealth than in any other state, based on costs of performance.

For debt buyers, as defined in § 58.1-422.3, sales, other than sales of tangible persoHalpersonal property, are in the Commonwealth if they consist of money recovered on debt that a debt buyer 4collected from a person who is a resident of the Commonwealth or an entity that has its commercial domicile in the Commonwealth.

Such rule shall apply regardless of the location of a debt buyer'salbuyer's business.

R 2.

The taxes under this article on the sales described under subsection B are imposed to the For the collection of such taxes on such sales, it is the intent of the General Assembly that the Tax Commissioner and the Department assert the taxpayer's nexus with the Commonwealth to the maximum extent permitted under the Constitutions of Virginia and the United States and federal law.

For the collection of such taxes on such sales, it is the intent of the General Assembly that the Tax Commissioner and the Department assert the taxpayer's nexus with the Commonwealth to the maximum extent permitted under the Constitutions of Virginia and the United States and federal law.

If necessary information is not available to the taxpayer to determine whether a sale other than a sale of tangible personal property is in the Commonwealth pursuant to the provisions of subsections B and C, the taxpayer may estimate the dollar value or portion of such sale in the Commonwealth, provided that the taxpayer can demonstrate to the satisfaction of the Tax Commissioner that (i) the estimate has been undertaken in good faith, (ii) the estimate is a reasonable approximation of the dollar value or portion of such sale in the Commonwealth, and (iii) in using an estimate the taxpayer did not have as a principal purpose the avoidance of any tax due under this article.

The Department maydidmay not implement procedures for obtaining its approval to use an estimate.

"Eligible"Authority" city" means the CityVirginia ofEconomic Richmond.elopmentDevelopment Partnership Authority.

"Eligible city" means the City of Richmond.

"Property information and analytics firm" means an entity and its affiliated entities that as of January 1, 2022, is primarily a commercial real estate information and analytics firm with a location in an eligible city and that between January 1, 2022, and January 1, 2029, is expected to (i) make or cause to be made a capital investment in an eligible city of at least $414.45 million and (ii) create at least 1,785 new jobs with average annual wages of at least $85,000 per job.45job. million and (ii) create at B.

B.

For taxable years beginning on or after January 1, 2022, but before January 1, 2029, a of 3 property information and analytics firm shall be subject to the provisions of subdivision B 2 of § 58.1-416 only if the Authority certifies to the Department that it has at least 1,000 full-time employees of 3 as of January 1, 2022, in an eligible city, subject to the terms and conditions of the memorandum of understanding.

Notwithstanding any provision of § 58.1-3 of the Code of Virginia or any other law, the Department of Taxation may provide to the Virginia Economic Development Partnership Authority and the Secretaries of Commerce and Trade and Finance such information as may be necessary to facilitate the purposes of this act.

That the memorandum of understanding, as defined in § 58.1-422.4 of the Code of Virginia, as of 3 created by this act, shall contain a provision that should the property information and analytics firm (the Firm) be out of substantial compliance with the performance criteria set forth in theEthe memorandum of understanding for three consecutive years, then the memorandum of Nunderstanding shall terminate, and the Firm shall repay the benefits received under this act of 3 proportional to the failure to create new jobs and make new investments as outlined in the terms and conditions.

If the memorandum is terminated pursuant to this enactment and such provision, R the Secretary of Finance shall notify the Department of Taxation, and the Firm shall thereafterOnothereafter no longer be eligible to utilize the apportionment formula set forth in subdivision B 2 of § 58.1-L1658.1-416 of 6.the Code of Virginia, as amended by this act.

Any6. person to whom tax information is divulged pursuant to this act shall be subject to the prohibitions and penalties set forth in § 58.1-3 as though he were a tax official.

LAny 7.person to whom tax information is divulged pursuant to this act shall be subject to the prohibitions and penalties set forth in § 58.1-3 of the Code of Virginia as though he were a tax official.

That7. the provisions of this act shall not become effective until a memorandum of understandiEg, as defined in § 58.1-422.4 of the Code of Virginia, is signed.

IfThat suchthe memorandumprovisions of Dthis act shall not bebecome applicableeffective inuntil anya taxablememorandum yearof beginningunderstanding, onas ordefined afterin January§ 1,58.1-422.4 2023.Bof 2the Code of §Virginia, 58.1-416as shallcreated 8.by this act, is signed.

ThatIf thesuch Virginiamemorandum Economicof Developmentunderstanding Partnershipis Authoritynot shallsigned provide,by uponAugust signature,1, a2022, copythe ofprovisions any memorandum of understanding,subsection asB defined2 inof § 58.1-422.458.1-416 of the Code of Virginia, as createdamended by this act, to the Chairmen of the MEI Project Approval Commission, the House provisions of this act shall expirenot ifbe copiesapplicable ofin suchany memorandumtaxable areyear notbeginning deliveredon withinor sevenafter daysJanuary of1, signature.2023.

H8. 3 R

That the Virginia Economic Development Partnership Authority shall provide, upon signature, a copy of any memorandum of understanding, as defined in § 58.1-422.4 of the Code of Virginia, as created by this act, to the Chairmen of the MEI Project Approval Commission, the House Committee on Appropriations, and the Senate Committee on Finance and Appropriations.

The provisions of this act shall expire if copies of such memorandum are not delivered within seven days of signature.