Virginia 2023 Regular Session Status: Enacted

SB 1349 — Internet root infrastructure providers; taxation of corporations, apportionment.

Last action — Acts of Assembly Chapter text (CHAP0406)

  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Senate
  4. ✓
    Passed House of Delegates
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced January 11, 2023. Enacted.

Signed by Governor Glenn Youngkin (Republican) on March 23, 2023.

Odds of enactment

High chance

Based on the sponsor, cosponsors, and committee posture, this bill has a high chance of becoming law.

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Prognosis

Advancing 38% · moderate confidence

  • Enacted

    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

  • Failed a recorded vote

    Failed 10 recorded votes so far — a real headwind.

Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.

Bill Text

What changed in the latest version

124 added · 127 removed

Plain-language change summary

The recent amendments to SB 1349 clarify the conditions under which sales are considered to occur within Virginia for certain types of businesses. Notably, the new language eliminates a specific provision about income-producing activities being performed both in and outside Virginia, simplifying the criteria for determining whether sales are taxable in the state. This change is important as it could streamline tax compliance for corporations, making it easier for them to understand their tax obligations in Virginia.

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SESSION ENROLLED VIRGINIA ACTS OF ASSEMBLY –– CHAPTER E An Act to amend and reenact § 58.1-416 of the Code of Virginia and to amend the Code of Virginia by infrastructure providers.
VIRGINIA ACTS OF ASSEMBLY -- 2023 SESSION CHAPTER 406 An Act to amend and reenact § 58.1-416 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 58.1-422.5, relating to taxation of corporations;
58.1-422.5, relating to taxation of corporations;
Internet root infrastructure providers.
Internet root R O [S 1349] L Approved L Be it enacted by the General Assembly of Virginia:
[S 1349] Approved March 23, 2023 Be it enacted by the General Assembly of Virginia:
E 1.
1.
That § 58.1-416 of the Code of Virginia is amended and reenacted and that the Code of VirginDa is § 58.1-416.
That § 58.1-416 of the Code of Virginia is amended and reenacted and that the Code of Virginia is amended by adding a section numbered 58.1-422.5 as follows:
§ 58.1-416.
or 2.
or 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 persoBal property, are in the Commonwealth if they consist of money recovered on debt that a debt buyer 3 domicile in the Commonwealth.
For debt buyers, as defined in § 58.1-422.3, sales, other than sales of tangible personal property, are in the Commonwealth if they consist of money recovered on debt that a debt buyer collected 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'9al business.
Such rule shall apply regardless of the location of a debt buyer's business.
E 2.
2.
For property information and analytics firms, as defined in § 58.1-422.4, that meet the R requirements set forth in § 58.1-422.4, sales of services are in the Commonwealth if they are derived from transactions with a customer or client who receives the benefit of the services in the Commonwealth.
For property information and analytics firms, as defined in § 58.1-422.4, that meet the requirements set forth in § 58.1-422.4, sales of services are in the Commonwealth if they are derived from transactions with a customer or client who receives the benefit of the services in the Commonwealth.
For Internet root infrastructure providers, as defined in § 58.1-422.5, sales of services are in the benefit of the services in the Commonwealth.
For Internet root infrastructure providers, as defined in § 58.1-422.5, sales of services are in the Commonwealth if they are derived from sales transactions with a customer or client who receives the benefit of the services in the Commonwealth.
If necessary information is not available to the taxpayer to determine whether a sale other than a and C, the taxpayer may estimate the dollar value or portion of such sale in the Commonwealth,tions B 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.
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 shall adopt remedies and corrective procedures for cases in which the Department has determined that the sourcing rules for sales other than sales of tangible personal property have been abused by the taxpayer, which described in subsection A.e location of income-producing activity and direct costs of performance as § 58.1-422.5.
The Department shall adopt remedies and corrective procedures for cases in which the Department has determined that the sourcing rules for sales other than sales of tangible personal property have been abused by the taxpayer, which may include reliance on the location of income-producing activity and direct costs of performance as described in subsection A.
§ 58.1-422.5.
This term does not"Internet root server of the IANA root" means a Domain Name System server for one of the 13 root identities (A.
This term does not include an Internet service provider, cable service provider, or similar company.
- M.) that answers requests for the Domain Name System root zone of the Internet, of 3 redirecting requests for each Top-Level Domain to its respective nameservers.
"Internet root server of the IANA root" means a Domain Name System server for one of the 13 root identities (A.
"Memorandum of understanding" means a performance agreement or related document entered into by an Internet root infrastructure provider and the Authority on or after January 1, 2023, but before December 1, 2023, that sets forth the requirements for commitments to the Commonwealth.
- M.) that answers requests for the Domain Name System root zone of the Internet, redirecting requests for each Top-Level Domain to its respective nameservers.
"Memorandum of understanding" means a performance agreement or related document entered into of 3 by an Internet root infrastructure provider and the Authority on or after January 1, 2023, but before December 1, 2023, that sets forth the requirements for commitments to the Commonwealth.
If such memorandum of understanding is not signed by December 1, 2023, the provisions of subdivision B 3 of § 58.1-416 of the Code of Virginia, as amended by this act, shall not be applicable in any of 3 taxable year beginning on or after January 1, 2023.
If such memorandum of understanding is not signed by December 1, 2023, the provisions of subdivision B of § 58.1-416 of the Code of Virginia, as amended by this act, shall not be applicable in any taxable year beginning on or after January 1, 2023.
That the Virginia Economic Development Partnership Authority shall provide, upon sigEature, a created by this act, to the Chairmen of the House Committee on Finance, the House Committee ons Appropriations, and the Senate Committee on Finance and Appropriations.
That the Virginia Economic Development Partnership Authority shall provide, upon signature, a copy of any memorandum of understanding, as defined in § 58.1-422.5 of the Code of Virginia, as created by this act, to the Chairmen of the House Committee on Finance, the House Committee on Appropriations, and the Senate Committee on Finance and Appropriations.
The provisions Rf this 31, 2023.
The provisions of this of 3 act shall expire if copies of such memorandum of understanding are not delivered by December 31, 2023.
expire if copies of such memorandum of understanding are not delivered by December O L L E D B E R
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Action History

  1. Acts of Assembly Chapter text (CHAP0406)

  2. Approved by Governor-Chapter 406 (effective - see bill)

  3. Governor's Action Deadline 11:59 p.m., March 27, 2023

  4. Enrolled Bill Communicated to Governor on March 13, 2023

  5. Signed by Speaker

  6. Signed by President

  7. Impact statement from TAX (SB1349ER)

  8. Bill text as passed Senate and House (SB1349ER)

  9. Enrolled

  10. VOTE: Adoption (92-Y 1-N)

  11. Conference report agreed to by House (92-Y 1-N)

  12. Conference report agreed to by Senate (40-Y 0-N)

  13. Passed by temporarily

  14. Conference substitute printed 23107202D-S2

  15. Amended by conference committee

  16. Delegates: Ware, Davis, Sickles

  17. Conferees appointed by House

  18. Senators: Barker, Howell, Vogel

  19. Conferees appointed by Senate

  20. Senate acceded to request (40-Y 0-N)

  21. House requested conference committee

  22. House insisted on substitute

  23. House substitute rejected by Senate (1-Y 39-N)

  24. VOTE: Block Vote Passage (98-Y 0-N)

  25. Passed House with substitute BLOCK VOTE (98-Y 0-N)

  26. Engrossed by House - committee substitute SB1349H1

  27. Committee substitute agreed to 23106558D-H1

  28. Read third time

  29. Read second time

  30. Committee substitute printed 23106558D-H1

  31. Reported from Appropriations with substitute (21-Y 0-N)

  32. Impact statement from TAX (SB1349S1)

  33. Assigned App. sub: Commerce Agriculture & Natural Resources

  34. Referred to Committee on Appropriations

  35. Read first time

  36. Placed on Calendar

  37. Passed Senate (39-Y 0-N)

  38. Constitutional reading dispensed (39-Y 0-N)

  39. Engrossed by Senate - committee substitute SB1349S1

  40. Committee substitute agreed to 23105249D-S1

  41. Reading of substitute waived

  42. Read second time

  43. Constitutional reading dispensed (38-Y 0-N)

  44. Reported from Finance and Appropriations with substitute (16-Y 0-N)

  45. Committee substitute printed 23105249D-S1

  46. Senate committee, floor amendments and substitutes offered

  47. Impact statement from TAX (SB1349)

  48. Referred to Committee on Finance and Appropriations

  49. Prefiled and ordered printed; offered 01/11/23 23103193D

Sponsors

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 147 not signed on

Sponsors (1)

Co-sponsors (0)

None.

Not signed on (147)

147 members have not signed on to this bill.

Show all 147 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

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Subjects

taxation technology
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Frequently asked questions

Who sponsors SB 1349?
SB 1349 is sponsored by Barker, George L..
What is the current status of SB 1349?
This bill has been enacted into law. Introduced January 11, 2023. Enacted.
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