Virginia 2027 Regular Session Status: In Committee

HB 979 — Taxation provisions; increases standard deduction.

Last action — Continued from last session

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

This bill is in committee in the House of Delegates. Introduced January 13, 2026. It must pass committee before a floor vote.

Next likely step: a committee vote, then a floor vote in the House of Delegates.

Odds of enactment

Low chance

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

Upgrade to see the exact probability and what's driving it.

A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.

Prognosis

Stalled 14% · moderate confidence

  • In Committee

    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

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

In plain language

The bill increases the standard deduction and introduces new tax brackets starting in 2027.

This bill raises the standard deduction amounts for taxpayers and creates new tax brackets for higher incomes. It also exempts certain food and hygiene products from local sales tax and allocates a portion of new tax revenue to public schools.

What this means for you
  • Workers: Higher-earning workers will see new tax brackets affecting their income, with increased rates for substantial earnings.
  • Families: Families may benefit from increased standard deductions and sales tax exemptions on food and hygiene products.
  • Consumers: Consumers will enjoy exemptions from local sales tax on essential food and hygiene products.

Summary

Taxation provisions. Increases the standard deduction to $10,000 for single individuals, $15,000 for individuals eligible to claim head of household for federal tax purposes, and $20,000 for married individuals beginning in taxable year 2027 and indexes such deduction amount for inflation beginning in taxable year 2028. The bill also removes the aggregate amount of housing opportunity tax credits that may be claimed for qualified projects across all calendar years and exempts food purchased for human consumption and essential personal hygiene products from the local sales tax. The bill establishes two new tax brackets beginning on and after January 1, 2027, that tax income in excess of $600,000 but not in excess of $1,000,000 at a rate of eight percent and income in excess of $1,000,000 at a rate of 10 percent. Finally, the bill provides that 50 percent of revenues generated by the new tax brackets will be dedicated to localities for maintenance, operation, capital outlays, debt and interest payments, or other expenses incurred in the operation of public schools.

Bill Text

What changed in the latest version

190 added · 144 removed

Plain-language change summary

In the latest version of Bill HB 979, the tax brackets have been adjusted, particularly affecting the rates applied to different income levels. For example, the income threshold for the five percent rate has been increased to $15,000 and the top rate of five and three-quarters percent has also seen changes in its income brackets. These revisions matter because they could potentially lower the tax burden for certain income earners, thereby impacting their disposable income and overall financial situation.

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+ 2027 SESSION + + HOUSE SUBSTITUTE + + 26107719D HOUSE BILL NO.
OFFERED FOR CONSIDERATION 2/08/2026 + + + + + + + + HOUSE BILL NO.
979 AMENDMENT IN THE NATURE OF A SUBSTITUTE (Proposed by the House Committee on Finance on ________________) (Patrons Prior to Substitute—Delegates Watts and Convirs-Fowler [HB 188]) A BILL to amend and reenact §§ 58.1-320, 58.1-322.03, 58.1-339.8, 58.1-439.30, 58.1-603.1, as it is currently effective and as it may become effective, 58.1-603.2, 58.1-604.01, as it is currently effective and as it may become effective, 58.1-605.1, 58.1-606.1, and 58.1-611.1 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 58.1-320.1 and by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.15, relating to taxation provisions.
979 + + AMENDMENT IN THE NATURE OF A SUBSTITUTE + + (Proposed by the House Committee on Finance + on ________________) + + (Patron Prior to Substitute—Delegate Watts) + A BILL to amend and reenact §§ 58.1-320, 58.1-322.03, 58.1-339.8, 58.1-439.30, 58.1-603.1, as it is currently effective and as it may become effective, 58.1-603.2, 58.1-604.01, as it is currently effective and as it may become effective, 58.1-605.1, 58.1-606.1, and 58.1-611.1 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 58.1-320.1 and by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.15, relating to taxation provisions.
That §§ 58.1-320, 58.1-322.03, 58.1-339.8, 58.1-439.30, 58.1-603.1, as it is currently effective and as it may become effective, 58.1-603.2, 58.1-604.01, as it is currently effective and as it may become effective, 58.1-605.1, 58.1-606.1, and 58.1-611.1 of the Code of Virginia are amended and reenacted and that the H Code of Virginia is amended by adding a section numbered 58.1-320.1 and by adding in Article 3 of O Chapter 3 of Title 58.1 a section numbered 58.1-339.15 as follows:
That §§ 58.1-320, 58.1-322.03, 58.1-339.8, 58.1-439.30, 58.1-603.1, as it is currently effective and as it may become effective, 58.1-603.2, 58.1-604.01, as it is currently effective and as it may become effective, 58.1-605.1, 58.1-606.1, and 58.1-611.1 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 58.1-320.1 and by adding in Article 3 of Chapter 3 of Title 58.1 a section numbered 58.1-339.15 as follows:
U § 58.1-320.
§ 58.1-320.
S A tax is hereby annually imposed on the Virginia taxable income for each taxable year of every individual as follows:
A tax is hereby annually imposed on the Virginia taxable income for each taxable year of every individual as follows:
E Two 1.
Two 1.
S Five percent on income in excess of $5,000, but not in excess of $12,000 for taxable years beginning before January 1, 1987;
Five percent on income in excess of $5,000, but not in excess of $12,000 for taxable years beginning before January 1, 1987;
U Five percent on income in excess of $5,000 but not in excess of $14,000 for taxable years beginning B January 1, 1987, through December 31, 1987;
Five percent on income in excess of $5,000 but not in excess of $14,000 for taxable years beginning January 1, 1987, through December 31, 1987;
Five percent on income in excess of $5,000 but not in excess of $15,000 for taxable years beginning S January 1, 1988, through December 31, 1988;
Five percent on income in excess of $5,000 but not in excess of $15,000 for taxable years beginning January 1, 1988, through December 31, 1988;
T Five percent on income in excess of $5,000 but not in excess of $16,000 for taxable years beginning January 1, 1989, through December 31, 1989;
Five percent on income in excess of $5,000 but not in excess of $16,000 for taxable years beginning January 1, 1989, through December 31, 1989;
I T Five five percent on income in excess of $5,000 but not in excess of $17,000 for taxable years beginning January 1, 1990;
Five five percent on income in excess of $5,000 but not in excess of $17,000 for taxable years beginning DRAFT OFFERED FOR CONSIDERATION 2/08/2026 January 1, 1990;
U Five and three-quarters percent on income in excess of $12,000 for taxable years beginning before January 1, 1987;
Five and three-quarters percent on income in excess of $12,000 for taxable years beginning before January 1, 1987;
T Five and three-quarters percent on income in excess of $14,000 for taxable years beginning January 1, E :
Five and three-quarters percent on income in excess of $14,000 for taxable years beginning January 1, 1987, through December 31, 1987;
36 1987, through December 31, 1987;
Five and three-quarters percent on income in excess of $15,000 for taxable years beginning January 1, 1988, through December 31, 1988;
37 Five and three-quarters percent on income in excess of $15,000 for taxable years beginning January 1, 38 1988, through December 31, 1988;
Five and three-quarters percent on income in excess of $16,000 for taxable years beginning January 1, 1989, through December 31, 1989;
39 Five and three-quarters percent on income in excess of $16,000 for taxable years beginning January 1, 40 1989, through December 31, 1989;
H A.
A.
From the total revenue generated on the individual income tax pursuant to § 58.1-320 each fiscal yearB as estimated by the Tax Commissioner, 5.5 percent of such revenue shall be distributed to counties and citi7s in the manner described in subsection B.
From the total revenue generated on the individual income tax pursuant to § 58.1-320 each fiscal year, as estimated by the Tax Commissioner, 5.5 percent of such revenue shall be distributed to counties and cities in the manner described in subsection B.
H B.
B.
Each county and city shall be distributed a portion of the estimated revenue pursuant to subdivision C that shall be used for maintenance, operation, capital outlays, debt and interest payments, or other expens2s incurred in the operation of the public schools, which shall be considered as funds raised from local resources.
Each county and city shall be distributed a portion of the estimated revenue pursuant to subdivision A that shall be used for maintenance, operation, capital outlays, debt and interest payments, or other expenses incurred in the operation of the public schools, which shall be considered as funds raised from local resources.
The numerator and denominator shall be estimated annually by the Tax Commissioner based on the HB979HC2 2 of 13 amount of income reported on returns filed for the most recent applicable year for which such data is available.
The numerator and denominator shall be estimated annually by the Tax Commissioner based on the amount of income reported on returns filed for the most recent applicable year for which such data is available.
Beginning in May 2028 and for each May thereafter, the Tax Commissioner shall make a written certification to the Comptroller annually certifying the estimated income tax revenue as described in subsection A during the fiscal year.
Beginning in May 2028 and for each May thereafter, the Tax Commissioner shall make a written DRAFT OFFERED FOR CONSIDERATION 2/08/2026 certification to the Comptroller annually certifying the estimated income tax revenue as described in subsection A during the fiscal year.
In taxable years beginning on and after January 1, 2028, the deduction amount authorized under this subdivision b shall be adjusted annually based on the preceding change in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), as published by the Bureau of Labor Statistics for the U.S.
In taxable years beginning on and after January 1, 2028, the deduction amount authorized DRAFT OFFERED FOR CONSIDERATION 2/08/2026 under this subdivision b shall be adjusted annually based on the preceding change in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), as published by the Bureau of Labor Statistics for the U.S.
The amount an individual pays as a fee for an initial screening to become a possible bone marrow donor, if (i) the individual is not reimbursed for such fee or (ii) the individual has not claimed a deduction for of 13 the payment of such fee on his federal income tax return.
The amount an individual pays as a fee for an initial screening to become a possible bone marrow donor, if (i) the individual is not reimbursed for such fee or (ii) the individual has not claimed a deduction for the payment of such fee on his federal income tax return.
A deduction shall be allowed to the purchaser or contributor for the amount paid or contributed during the taxable year for a prepaid tuition contract or college savings trust account entered into with the subdivision b, the amount deducted on any individual income tax return in any taxable year shall be limited to $4,000 per prepaid tuition contract or college savings trust account.
A deduction shall be allowed to the purchaser or contributor for the amount paid or contributed DRAFT OFFERED FOR CONSIDERATION 2/08/2026 during the taxable year for a prepaid tuition contract or college savings trust account entered into with the Commonwealth Savers Plan, pursuant to Chapter 7 (§ 23.1-700 et seq.) of Title 23.1.
Except as provided in subdivision b, the amount deducted on any individual income tax return in any taxable year shall be limited to $4,000 per prepaid tuition contract or college savings trust account.
For the Hurposes Commonwealth Savers Plan as of December 31 of the taxable year.
For the purposes of this subdivision, "purchaser" or "contributor" means the person shown as such on the records of the Commonwealth Savers Plan as of December 31 of the taxable year.
S b.
b.
Such taxpayer shall be allowed a deduction for the full amount paid for the contract or contributed to a college savings trust account, lSss any amounts previously deducted.
Such taxpayer shall be allowed a deduction for the full amount paid for the contract or contributed to a college savings trust account, less any amounts previously deducted.
The total amount an individual actually contributed in funds to the Virginia Public School Construction Grants Program and Fund, established in Chapter 11.1 (§ 22.1-175.1 et seq.) of Title 22.1, provided thatBthe indi9.
The total amount an individual actually contributed in funds to the Virginia Public School Construction Grants Program and Fund, established in Chapter 11.1 (§ 22.1-175.1 et seq.) of Title 22.1, provided that the individual has not claimed a deduction for such amount on his federal income tax return.
9.
however, the deduction provided by this subdivision shall be available only if (i) the individual is not reimbursed for such tuition costs and (ii) the individual has not claimed a deduction for the payment of such tuition costs on his fTderal income tax return.
however, the deduction provided by this subdivision shall be available only if (i) the individual is not reimbursed for such tuition costs and (ii) the individual has not claimed a deduction for the payment of such tuition costs on his federal DRAFT OFFERED FOR CONSIDERATION 2/08/2026 income tax return.
The amount an individual pays annually in premiums for long-term health care insurance, providedU that the individual has not claimed a deduction for federal income tax purposes, or, for taxable years T beginning before January 1, 2014, a credit under § 58.1-339.11.
The amount an individual pays annually in premiums for long-term health care insurance, provided that the individual has not claimed a deduction for federal income tax purposes, or, for taxable years beginning before January 1, 2014, a credit under § 58.1-339.11.
For taxable years beginning on and afterE January 1, 2014, no such deduction for long-term health care insurance premiums paid by the individual taxable year for long-term health care insurance premiums paid by him.
For taxable years beginning on and after January 1, 2014, no such deduction for long-term health care insurance premiums paid by the individual during the taxable year shall be allowed if the individual has claimed a federal income tax deduction for such taxable year for long-term health care insurance premiums paid by him.
a federal income tax deduction for such 11.
11.
An amount equal to 20 percent of the sum paid by an individual pursuant to Chapter 6 (§ 58.1-600 et seq.), not to exceed $500 in each taxable year, in purchasing for his own use the following items of tanHible that meet or exceed the applicable energy star efficiency requirements developed by the U.S.
An amount equal to 20 percent of the sum paid by an individual pursuant to Chapter 6 (§ 58.1-600 et seq.), not to exceed $500 in each taxable year, in purchasing for his own use the following items of tangible personal property:
Environmentalators Protection Agency and the U.S.
(i) any clothes washers, room air conditioners, dishwashers, and standard size refrigerators that meet or exceed the applicable energy star efficiency requirements developed by the U.S.
Environmental Protection Agency and the U.S.
HB979HC2 4 of 13 13.
13.
The lesser of $5,000 or the amount actually paid by a living donor of an organ or other living tissue for unreimbursed out-of-pocket expenses directly related to the donation that arose within 12 months of such donation, provided that the donor has not taken a medical deduction in accordance with the provisions of § 213 of the Internal Revenue Code for such expenses.
The lesser of $5,000 or the amount actually paid by a living donor of an organ or other living tissue DRAFT OFFERED FOR CONSIDERATION 2/08/2026 for unreimbursed out-of-pocket expenses directly related to the donation that arose within 12 months of such donation, provided that the donor has not taken a medical deduction in accordance with the provisions of § 213 of the Internal Revenue Code for such expenses.
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18.
DRAFT OFFERED FOR CONSIDERATION 2/08/2026 18.
B.
DRAFT OFFERED FOR CONSIDERATION 2/08/2026 B.
For taxable years beginning on and after January 1, 2000, any individual or married individuals filing jointly whose family Virginia adjusted gross income does not exceed 100 percent of the poverty of 13 guideline amount corresponding to a household of an equal number of persons as listed in the poverty guidelines published during such taxable year, shall be allowed a nonrefundable credit against the tax levied pursuant to § 58.1-320 in an amount equal to $300 each for the individual, the individual's spouse, and any year.
For taxable years beginning on and after January 1, 2000, any individual or married individuals filing jointly whose family Virginia adjusted gross income does not exceed 100 percent of the poverty guideline amount corresponding to a household of an equal number of persons as listed in the poverty guidelines published during such taxable year, shall be allowed a nonrefundable credit against the tax levied pursuant to § 58.1-320 in an amount equal to $300 each for the individual, the individual's spouse, and any person claimed as a dependent on the individual's or married individuals' income tax return for the taxable year.
H or married individuals filing jointly, eligible for a tax credit pursuant to § 32 of the Internal Revenue Code, may for the taxable year, in lieu of the credit authorized under subdivision 1 or 2, claim a refundable credit against the tax imposed pursuant to § 58.1-320 in an amount equal to 15 percent of the credit claimed by the individual or married individuals for federal individual income taxes pursuant to § 32 of the Internal RSvenue Code for the taxable year.
3.
a.
For taxable years beginning on and after January 1, 2022, but before January 1, 2025 any individual or married individuals filing jointly, eligible for a tax credit pursuant to § 32 of the Internal Revenue Code, may for the taxable year, in lieu of the credit authorized under subdivision 1 or 2, claim a refundable credit against the tax imposed pursuant to § 58.1-320 in an amount equal to 15 percent of the credit claimed by the individual or married individuals for federal individual income taxes pursuant to § 32 of the Internal Revenue Code for the taxable year.
For taxable years beginning on and after January 1, 2025 but before January 1, 2027, any individual or married individuals filing jointly may, for the taxable year, in lieu of the credit authorized under subdivision 1 or 2, claim a refundable credit against the tax imposed pursuant to § 58.1-320 in an amount equal to 20 S percent of the credit claimed by the individual or married individuals for federal individual income taxes pursuant to § 32 of the Internal Revenue Code for the taxable year.
For taxable years beginning on and after January 1, 2025 but before January 1, 2027, any individual or married individuals filing jointly may, for the taxable year, in lieu of the credit authorized under subdivision 1 or 2, claim a refundable credit against the tax imposed pursuant to § 58.1-320 in an amount equal to 20 percent of the credit claimed by the individual or married individuals for federal individual income taxes pursuant to § 32 of the Internal Revenue Code for the taxable year.
U c.
c.
The refundable credit claimed pursuant to this subdivision 3 shall be claimed on the Virginia incBme to this subdivision 3 and subdivision 1 or 2 for the same taxable year.sehold be allowed a credit pursuaSt C.
The refundable credit claimed pursuant to this subdivision 3 shall be claimed on the Virginia income tax return and redeemed by the Tax Commissioner.
In no case shall a household be allowed a credit pursuant to this subdivision 3 and subdivision 1 or 2 for the same taxable year.
DRAFT OFFERED FOR CONSIDERATION 2/08/2026 C.
I D.
D.
Notwithstanding any other provision of this section, no credit shall be allowed pursuant to subseTtion B in any taxable year in which the individual, the individual's spouse, or both, or any person claimed as a dependent on such individual's or married individuals' income tax return, claims one or any combination of the following on his or their income tax return for such taxable year:
Notwithstanding any other provision of this section, no credit shall be allowed pursuant to subsection B in any taxable year in which the individual, the individual's spouse, or both, or any person claimed as a dependent on such individual's or married individuals' income tax return, claims one or any combination of the following on his or their income tax return for such taxable year:
T 1.
1.
E 2.
2.
of § 58.1-322.03;
4.
or for the additional personal exemption for blind or aged taxpayers under subdivision 2 b 5.
The deduction for the additional personal exemption for blind or aged taxpayers under subdivision 2 b of § 58.1-322.03;
or 5.
For purposes of this section, "Virginia adjusted gross income" means federal adjusted gross income for tHe taxaB.
For purposes of this section, "Virginia adjusted gross income" means federal adjusted gross income for the taxable year with the modifications specified in §§ 58.1-322.01 and 58.1-322.02.
B.
Tax credits shall be refunded by the Tax Commissioner on behalf of the Commonwealth H for 100 percent of face value.
Tax credits shall be refunded by the Tax Commissioner on behalf of the Commonwealth for 100 percent of face value.
The Department shall not distribute 2 multiple payments to a taxpayer who does not elect to receive multiple payments.
The Department shall not distribute multiple payments to a taxpayer who does not elect to receive multiple payments.
C.
DRAFT OFFERED FOR CONSIDERATION 2/08/2026 C.
HB979HC2 6 of 13 § 58.1-439.30.
§ 58.1-439.30.
C.
DRAFT OFFERED FOR CONSIDERATION 2/08/2026 C.
Any housing opportunity tax credit amounts authorized in a calendar year that are subsequently (i) canceled and returned to the Authority or (ii) recaptured or disallowed pursuant to subsection E may be awarded in the following calendar year, but no later than December 31, 2030.
Any housing opportunity tax credit amounts authorized in a calendar year that are subsequently (i) canceled and returned to the Authority or (ii) recaptured or disallowed pursuant to subsection E may be DRAFT OFFERED FOR CONSIDERATION 2/08/2026 awarded in the following calendar year, but no later than December 31, 2030.
If the amount of housing opportunity tax credits authorized in a calendar year for qualified projects is less than the total amount of credits available for qualified projects under subdivision H 2 1, the balance of such credits, in an amount not greater than 15 percent of the amount of credits available for qualified projects under subdivision H 2 1, (a) shall be allocated by the Authority for any qualified project in the following calendar year, (b) shall not be allocated at any time after such following calendar year, and (c) shall be allocated no later than December 31, of 13 2030.
If the amount of housing opportunity tax credits authorized in a calendar year for qualified projects is less than the total amount of credits available for qualified projects under subdivision H 2 1, the balance of such credits, in an amount not greater than 15 percent of the amount of credits available for qualified projects under subdivision H 2 1, (a) shall be allocated by the Authority for any qualified project in the following calendar year, (b) shall not be allocated at any time after such following calendar year, and (c) shall be allocated no later than December 31, 2030.
Such housing opportunity tax credits issued pursuant to this subsection shall be allowed ratably, with one-tenth of the total amount of credits allowed annually for 10 years over the credit period, except that there U.S.C.
Such housing opportunity tax credits issued pursuant to this subsection shall be allowed ratably, with one-tenth of the total amount of credits allowed annually for 10 years over the credit period, except that there shall be a reduction in the tax credit allowable in the first year of the credit period due to the calculation in 26 U.S.C.
§ 42(f)(2) in the credit allowable for the firstion in 26 taxable year of the credit period shall be allowable for the first taxable year following the credit period.
§ 42(f)(2) in the credit allowable for the first taxable year of the credit period shall be allowable for the first taxable year following the credit period.
H amount of credits allowed annually for 10 years over the credit period, except that there shall be a reductiontal in the tax credit allowable in the first year of the credit period due to the calculation in 26 U.S.C.
5.
4.
Such credits issued on and after January 1, 2022, shall be allowed ratably, with one-tenth of the total amount of credits allowed annually for 10 years over the credit period, except that there shall be a reduction in the tax credit allowable in the first year of the credit period due to the calculation in 26 U.S.C.
S I.
I.
Notwithstanding any provision of law or regulation to the contrary, only Virginia housing opportunity tax credits awarded in calendar year 2021, up to a maximum of $15 million total for all taxpayers in allE taxable years, may be claimed pursuant to the provisions of this section as set forth in Chapter 495 of the Acts of Assembly of 2021, Special Session I, prior to its amendment by the ninth enactment of Chapter 2 of thS Acts of Assembly of 2022, Special Session I.
Notwithstanding any provision of law or regulation to the contrary, only Virginia housing opportunity tax credits awarded in calendar year 2021, up to a maximum of $15 million total for all taxpayers in all taxable years, may be claimed pursuant to the provisions of this section as set forth in Chapter 495 of the Acts of Assembly of 2021, Special Session I, prior to its amendment by the ninth enactment of Chapter 2 of the DRAFT OFFERED FOR CONSIDERATION 2/08/2026 Acts of Assembly of 2022, Special Session I.
The Authority shall, upon request from the Chairs of the House Committee on Appropriations, the U House Committee on Finance, and the Senate Committee on Finance and Appropriations, provide B authorized certificated Virginia housing opportunity tax credit program that would allow a qualified project to sell all or any portion of its Virginia housing opportunity tax credits, to one or more unrelated taxpayers based on findings in the report of the Department of Housing and Community Development and the T Authority stakeholder advisory group submitted pursuant to Chapter 517 of the Acts of Assembly of 2020.
The Authority shall, upon request from the Chairs of the House Committee on Appropriations, the House Committee on Finance, and the Senate Committee on Finance and Appropriations, provide information, data, and any other requested advisement on the potential structure and cost of a separately authorized certificated Virginia housing opportunity tax credit program that would allow a qualified project to sell all or any portion of its Virginia housing opportunity tax credits, to one or more unrelated taxpayers based on findings in the report of the Department of Housing and Community Development and the Authority stakeholder advisory group submitted pursuant to Chapter 517 of the Acts of Assembly of 2020.
I K.
K.
Of the $60 million of Virginia housing opportunity tax credits authorized per calendar year frTm 2022 through 2025 for qualified projects by the Authority pursuant to this article, $20 million of such credits shall be first allocated exclusively for qualified projects located in a locality with a population no greater than 35,000 as determined by the most recent United States census.
Of the $60 million of Virginia housing opportunity tax credits authorized per calendar year from 2022 through 2025 for qualified projects by the Authority pursuant to this article, $20 million of such credits shall be first allocated exclusively for qualified projects located in a locality with a population no greater than 35,000 as determined by the most recent United States census.
T 2.
2.
Of the $64 million of Virginia housing opportunity tax credits authorized per calendar year from E026 through 2030 for qualified projects by the Authority pursuant to this article, $20 million of such credits shall be reserved for qualified projects located in a geographic area within the Balance of State Pool.
Of the $64 million of Virginia housing opportunity tax credits authorized per calendar year from 2026 through 2030 for qualified projects by the Authority pursuant to this article, $20 million of such credits shall be reserved for qualified projects located in a geographic area within the Balance of State Pool.
The Auth3.
The Authority shall notify the Virginia Housing Commission upon any change to the Balance of State Pool.
3.
H A.
A.
In addition to the sales tax imposed pursuant to § 58.1-603, there is hereby levied and imposed iB each 15.2 that (i) as of January 1, 2013, has a population of 1.5 million or more as shown by the most recent7f Title United States Census, has not less than 1.2 million motor vehicles registered therein, and has a total transit ridership of not less than 15 million riders per year across all transit systems within the Planning District or (ii) as shown by the most recent United States Census meets the population criteria set forth in clause (i) and also meets the vehicle registration and ridership criteria set forth in clause (i), a retail sales tax at the rate of 0.70 percent.
In addition to the sales tax imposed pursuant to § 58.1-603, there is hereby levied and imposed in each county and city located in a Planning District established pursuant to Chapter 42 (§ 15.2-4200 et seq.) of Title 15.2 that (i) as of January 1, 2013, has a population of 1.5 million or more as shown by the most recent DRAFT OFFERED FOR CONSIDERATION 2/08/2026 United States Census, has not less than 1.2 million motor vehicles registered therein, and has a total transit ridership of not less than 15 million riders per year across all transit systems within the Planning District or (ii) as shown by the most recent United States Census meets the population criteria set forth in clause (i) and also meets the vehicle registration and ridership criteria set forth in clause (i), a retail sales tax at the rate of 0.70 percent.
In no case shall an additional sales tax be imposed HB979HC2 8 of 13 pursuant to both clause (ii) of subsection A and this subsection.
In no case shall an additional sales tax be imposed pursuant to both clause (ii) of subsection A and this subsection.
In addition to the sales tax imposed pursuant to § 58.1-603, there is hereby levied and imposed in each county and city located in a Planning District established pursuant to Chapter 42 (§ 15.2-4200 et seq.) of Title 15.2 that (i) as of January 1, 2013, has a population of 1.5 million or more as shown by the most recent United States Census, has not less than 1.2 million motor vehicles registered therein, and has a total transit ridership of not less than 15 million riders per year across all transit systems within the Planning District or (ii) as shown by the most recent United States Census meets the population criteria set forth in clause (i) and also meets the vehicle registration and ridership criteria set forth in clause (i), a retail sales tax at the rate of 0.70 percent.
In addition to the sales tax imposed pursuant to § 58.1-603, there is hereby levied and imposed in each county and city located in a Planning District established pursuant to Chapter 42 (§ 15.2-4200 et seq.) of Title 15.2 that (i) as of January 1, 2013, has a population of 1.5 million or more as shown by the most recent United States Census, has not less than 1.2 million motor vehicles registered therein, and has a total transit DRAFT OFFERED FOR CONSIDERATION 2/08/2026 ridership of not less than 15 million riders per year across all transit systems within the Planning District or (ii) as shown by the most recent United States Census meets the population criteria set forth in clause (i) and also meets the vehicle registration and ridership criteria set forth in clause (i), a retail sales tax at the rate of 0.70 percent.
No discount under § 58.1-622 shall be allowed for the tax imposed under this section.
No discount under § 58.1-622 shall be allowed for the tax DRAFT OFFERED FOR CONSIDERATION 2/08/2026 imposed under this section.
Such tax shall be administered and collected by the Tax Commissioner in the of 13 same manner and subject to the same penalties as provided for the state use tax under § 58.1-604.
Such tax shall be administered and collected by the Tax Commissioner in the same manner and subject to the same penalties as provided for the state use tax under § 58.1-604.
pursuant to subsection F and used for the purposes set forth therein;
1.
and Triangle Marketing Fund created 2.
Fifty percent of the revenues shall be deposited into the Historic Triangle Marketing Fund created pursuant to subsection F and used for the purposes set forth therein;
and 2.
H c.
York County shall allocate at least $438,600.0,000;
and 2.
As determined by agreement among the City of Williamsburg and the Counties of James City and O York, the amounts allocated under subdivision 1 shall be appropriated so that each of the recipients identified in this subdivision receive the following minimum amounts:
S a.
The Williamsburg Tourism Council shall receive at least $126,600;
James City County shall allocate at least $740,000;
and c.
York County shall allocate at least $438,600.
2.
As determined by agreement among the City of Williamsburg and the Counties of James City and York, the amounts allocated under subdivision 1 shall be appropriated so that each of the recipients identified in this subdivision receive the following minimum amounts:
a.
The Williamsburg Tourism Council shall receive at least $126,600;
DRAFT OFFERED FOR CONSIDERATION 2/08/2026 b.
and E c.
and c.
There is hereby created in the state treasury a special nonreverting fund to be known as the HSstoric Triangle Marketing Fund, referred to in this section as "the Fund," to be managed and administered by the Williamsburg Tourism Council.
There is hereby created in the state treasury a special nonreverting fund to be known as the Historic Triangle Marketing Fund, referred to in this section as "the Fund," to be managed and administered by the Williamsburg Tourism Council.
InterBst earned including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund.
Interest earned on moneys in the Fund shall remain in the Fund and be credited to it.
Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund.
Expenditures and disbursements from the Fund shall be made by the State Treasurer on warrants issued by T the Comptroller upon written request signed by the Secretary of Finance.
Expenditures and disbursements from the Fund shall be made by the State Treasurer on warrants issued by the Comptroller upon written request signed by the Secretary of Finance.
one member of the James CitT County Board of Supervisors, one member of the York County Board of Supervisors;
one member of the James City County Board of Supervisors, one member of the York County Board of Supervisors;
one member of the E Williamsburg City Council, one representative of the Colonial Williamsburg Foundation, one representative of the Jamestown-Yorktown Foundation, one representative of Busch Gardens Williamsburg, one Motel Association, and one representative of the Williamsburg Area Restaurant Association.
one member of the Williamsburg City Council, one representative of the Colonial Williamsburg Foundation, one representative of the Jamestown-Yorktown Foundation, one representative of Busch Gardens Williamsburg, one representative of the Jamestown Rediscovery Foundation, one representative of the Williamsburg Hotel and Motel Association, and one representative of the Williamsburg Area Restaurant Association.
The Office shall be responsible for (i) developing and implementing, in consultation with the Council, long-term and short-term strategic plans for advertising and promoting the numerous facilities, venues, and attractions devoted tH education, historic preservation, amusement, entertainment, and dining in the Historic Triangle as a cohBsive the coordination of cross-advertising and cross-marketing efforts between various tourism venues andn re7uest, with destinations in the Historic Triangle region;
The Office shall be responsible for (i) developing and implementing, in consultation with the Council, long-term and short-term strategic plans for advertising and promoting the numerous facilities, venues, and attractions devoted to DRAFT OFFERED FOR CONSIDERATION 2/08/2026 education, historic preservation, amusement, entertainment, and dining in the Historic Triangle as a cohesive and unified travel destination for local, national, and international travelers;
(ii) assisting, upon request, with the coordination of cross-advertising and cross-marketing efforts between various tourism venues and destinations in the Historic Triangle region;
Such report shall be delivered no later than December 1 of each year to the managers or chief executive officers of HB979HC2 10 of 13 the City of Williamsburg and the Counties of James City and York, and to the Chairmen of the House Committees on Finance and Appropriations and the Senate Committee on Finance and Appropriations.
Such report shall be delivered no later than December 1 of each year to the managers or chief executive officers of the City of Williamsburg and the Counties of James City and York, and to the Chairmen of the House Committees on Finance and Appropriations and the Senate Committee on Finance and Appropriations.
Such tax shall be added to the rate of the state use tax imposed pursuant to § 58.1-604 in such county and city and shall be subject to all the provisions of this chapter and the rules and regulations published with respect thereto.
Such tax DRAFT OFFERED FOR CONSIDERATION 2/08/2026 shall be added to the rate of the state use tax imposed pursuant to § 58.1-604 in such county and city and shall be subject to all the provisions of this chapter and the rules and regulations published with respect thereto.
The revenue generated and collected pursuant to the tax authorized under this section, less the applicable portion of any refunds to taxpayers, shall be deposited by the Comptroller into special funds established by law.
DRAFT OFFERED FOR CONSIDERATION 2/08/2026 The revenue generated and collected pursuant to the tax authorized under this section, less the applicable portion of any refunds to taxpayers, shall be deposited by the Comptroller into special funds established by law.
Such tax shall be added to the rates of the state and local sales tax imposed by this chapter and shall be subject to all the of 13 provisions of this chapter and the rules and regulations published with respect thereto.
Such tax shall be added to the rates of the state and local sales tax imposed by this chapter and shall be subject to all the provisions of this chapter and the rules and regulations published with respect thereto.
Any tax imposed pursuant to this section shall expire (i) if the capital projects for the construction or repaid or (ii) if the capital projects for the construction or renovation of schools are not to be financed by bonds or loans, on a date chosen by the governing body and specified in any resolution passed pursuant to the provisions of subdivision B 1.
Any tax imposed pursuant to this section shall expire (i) if the capital projects for the construction or renovation of schools are to be financed by bonds or loans, on the date by which such bonds or loans shall be repaid or (ii) if the capital projects for the construction or renovation of schools are not to be financed by bonds or loans, on a date chosen by the governing body and specified in any resolution passed pursuant to the provisions of subdivision B 1.
The clerk of the circuit court shall publish notice of the referendum in a newspaper of general H question on the ballot for the referendum shall include language stating (i) that the revenues from the sales tax shall be used solely for capital projects for the construction or renovation of schools and (ii) the date on which the sales tax shall expire.
The clerk of the circuit court shall publish notice of the referendum in a newspaper of general circulation in the qualifying locality once a week for three consecutive weeks prior to the election.
U C.
The question on the ballot for the referendum shall include language stating (i) that the revenues from the sales tax shall be used solely for capital projects for the construction or renovation of schools and (ii) the date on DRAFT OFFERED FOR CONSIDERATION 2/08/2026 which the sales tax shall expire.
The governing body of the qualifying locality, if it elects to impose a local sales tax under thiS section after approval at a referendum as provided in subsection B shall do so by the adoption of an ordinance stating its purpose and referring to this section and providing that such ordinance shall be effective on the first day of a month at least 120 days after its adoption.
C.
The governing body of the qualifying locality, if it elects to impose a local sales tax under this section after approval at a referendum as provided in subsection B shall do so by the adoption of an ordinance stating its purpose and referring to this section and providing that such ordinance shall be effective on the first day of a month at least 120 days after its adoption.
A certified copy of such ordinance shall be forwarded to the Tax Commissioner so that it will beS received within five days after its adoption.
A certified copy of such ordinance shall be forwarded to the Tax Commissioner so that it will be received within five days after its adoption.
Any local sales tax levied under this section shall be administered and collected by the Tax U Commissioner in the same manner and subject to the same exemptions and penalties as provided for the staBe human consumption or essential personal hygiene products, as such terms are defined in § 58.1-611.1.sed Sor E.
Any local sales tax levied under this section shall be administered and collected by the Tax Commissioner in the same manner and subject to the same exemptions and penalties as provided for the state sales tax;
All local sales tax moneys collected by the Tax Commissioner under this section shall be paid into the state treasury to the credit of a special fund that is hereby created on the Comptroller's books for each qualifying locality under the name "Collections of Additional Local Sales Taxes in ____ (INSERT NAME I OF THE QUALIFYING LOCALITY)." Each fund shall be administered as provided in § 58.1-605.
however, the local sales tax levied under this section shall not be levied on food purchased for human consumption or essential personal hygiene products, as such terms are defined in § 58.1-611.1.
A T separate fund shall be created for each qualifying locality.
E.
All local sales tax moneys collected by the Tax Commissioner under this section shall be paid into the state treasury to the credit of a special fund that is hereby created on the Comptroller's books for each qualifying locality under the name "Collections of Additional Local Sales Taxes in ____ (INSERT NAME OF THE QUALIFYING LOCALITY)." Each fund shall be administered as provided in § 58.1-605.
A separate fund shall be created for each qualifying locality.
U F.
F.
As soon as practicable after the local sales tax moneys have been paid into the state treasury inTany month for the preceding month, the Comptroller shall draw his warrant on the State Treasurer in the propEr amount in favor of each qualifying locality, and such payments shall be charged to the account of the qualifying locality under its special fund created by this section.
As soon as practicable after the local sales tax moneys have been paid into the state treasury in any month for the preceding month, the Comptroller shall draw his warrant on the State Treasurer in the proper amount in favor of each qualifying locality, and such payments shall be charged to the account of the qualifying locality under its special fund created by this section.
If errors are made in any such payment, or errors shall be corrected and adjustments made in the payments for the next two months as follows:
If errors are made in any such payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers or to some other fact, the errors shall be corrected and adjustments made in the payments for the next two months as follows:
one-halfe of the total adjustment shall be included in the payment for each of the next two months.
one-half of the total adjustment shall be included in the payment for each of the next two months.
The revenues from this tax shall be used solely for capital projects for new construction or major renovation of schools in the qualifying locality, including bond and loan financing costs related to such construction or renovation.
The revenues from this tax shall be used solely for capital projects for new construction or major renovation of schools in the qualifying locality, including bond and loan financing costs related to such DRAFT OFFERED FOR CONSIDERATION 2/08/2026 construction or renovation.
use of revenues for construction or H renovation of schools.
use of revenues for construction or renovation of schools.
B § 58.1-605.1 to provide revenue for capital projects for the construction or renovation of schools in sucher locality.
A.
Such tax shall be added to the rates of the state and local use tax imposed by this chapter and shall be subject to all the provisions of this chapter, and all amendments thereof, and the rules and regulationsC published with respect thereto, except that no discount under § 58.1-622 shall be allowed on a local use tax.
1.
The governing body of a qualifying locality may levy a use tax at the rate of such sales tax under § 58.1-605.1 to provide revenue for capital projects for the construction or renovation of schools in such locality.
Such tax shall be added to the rates of the state and local use tax imposed by this chapter and shall be subject to all the provisions of this chapter, and all amendments thereof, and the rules and regulations published with respect thereto, except that no discount under § 58.1-622 shall be allowed on a local use tax.
HB979HC2 12 of 13 B.
B.
However, the local use tax authorized by this section shall apply to tangible personal property purchased outside the Commonwealth for use or consumption within the locality imposing the local use tax, or stored within the locality for use or consumption, where the property would have been subject to the sales tax if it had been purchased within the Commonwealth.
However, the local use tax authorized by this section shall apply to tangible personal property purchased outside the Commonwealth for use or consumption within the locality imposing the local use tax, or stored within the locality for use or consumption, where the property would have been subject to the sales DRAFT OFFERED FOR CONSIDERATION 2/08/2026 tax if it had been purchased within the Commonwealth.
"Food purchased for human consumption" does not include food sold by any retail establishment where the gross receipts derived from the sale of food prepared by such retail establishment for immediate consumption on or off the premises of the retail establishment constitutes more than 80 percent of the total gross receipts of that retail establishment, including motor fuel purchases, regardless of whether such prepared food is consumed on the premises of that retail establishment.
"Food purchased for human consumption" does not include food sold by any retail establishment where the gross receipts derived from the sale of food prepared by such retail establishment for immediate consumption on or off the premises of the retail establishment constitutes more than 80 percent of the total gross receipts of that retail establishment, including motor fuel purchases, regardless of whether such prepared food is consumed on the DRAFT OFFERED FOR CONSIDERATION 2/08/2026 premises of that retail establishment.
On and after January 1, 2023, but before January 1, 2027, and except for taxes imposed pursuant to §§ 58.1-605 and 58.1-606, no tax shall be imposed under this chapter, or pursuant to any authority granted under this chapter, on food purchased for human consumption or essential personal hygiene products.
On and after January 1, 2023, but before July 1, 2026, and except for taxes imposed pursuant to §§ 58.1-605 and 58.1-606, no tax shall be imposed under this chapter, or pursuant to any authority granted under this chapter, on food purchased for human consumption or essential personal hygiene products.
Beginning February 1, 2023, an amount equal to the revenue that would have been distributed pursuant to clause (ii) of subsection A B shall be distributed as provided in subsections B, C, and D of § 58.1-638 based on the estimates of the population of cities and counties ages five to 19.
Beginning February 1, 2023, but before August 1, 2026, an amount equal to the revenue that would have been distributed pursuant to clause (ii) of subsection A B shall be distributed as provided in subsections B, C, and D of § 58.1-638 based on the estimates of the population of cities and counties ages five to 19.
§ 2012, as amended, and federal regulations adopted of 13 pursuant to that Act, except it shall not include seeds and plants which produce food for human consumption.
§ 2012, as amended, and federal regulations adopted pursuant to that Act, except it shall not include seeds and plants which produce food for human consumption.
retail establishment where the gross receipts derived from the sale of food prepared by such retail by any establishment for immediate consumption on or off the premises of the retail establishment constitutes more than 80 percent of the total gross receipts of that retail establishment, including but not limited to motor fuel For purposes of this section, "retail establishment" means each place of business for which any "dealer," as.
For the purpose of this section, "food purchased for human consumption" shall not include food sold by any retail establishment where the gross receipts derived from the sale of food prepared by such retail establishment for immediate consumption on or off the premises of the retail establishment constitutes more than 80 percent of the total gross receipts of that retail establishment, including but not limited to motor fuel purchases, regardless of whether such prepared food is consumed on the premises of that retail establishment.
defined in § 58.1-612, is required to apply for and receive a certificate of registration pursuant to § 58.1-613.
For purposes of this section, "retail establishment" means each place of business for which any "dealer," as defined in § 58.1-612, is required to apply for and receive a certificate of registration pursuant to § 58.1-613.
As used in this section, "essential personal hygiene products" means (i) nondurable incontinence products such as diapers, disposable undergarments, pads, and bed sheets and (ii) menstrual cups and pads, "Essential personal hygiene products" does not include any item that is otherwise exempt pursuant to this chapter.
As used in this section, "essential personal hygiene products" means (i) nondurable incontinence products such as diapers, disposable undergarments, pads, and bed sheets and (ii) menstrual cups and pads, pantyliners, sanitary napkins, tampons, and other products used to absorb or contain menstrual flow.
"Essential personal hygiene products" does not include any item that is otherwise exempt pursuant to this chapter.
On and after January 1, 2027, no tax shall be imposed under this chapter, or pursuant to any authority products.nder this chapter, on food purchased for human consumption or essential personal hygiene H 2.
On and after July 1, 2026, no tax shall be imposed under this chapter, or pursuant to any authority granted under this chapter, on food purchased for human consumption or essential personal hygiene DRAFT OFFERED FOR CONSIDERATION 2/08/2026 products.
That the provisions of this act shall become effective on January 1, 2027.
26
O U S E S U B S T I T U T E H B C 2
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Action History

  1. Continued from last session

  2. Incorporates HB188 (Convirs-Fowler)

  3. Continued to next session in Finance (Voice Vote)

  4. Subcommittee recommends continuing to (Voice Vote)

  5. Fiscal Impact statement From TAX (2/8/2026 9:56 pm)

  6. House subcommittee offered

  7. Fiscal Impact statement From TAX (2/7/2026 8:31 am)

  8. Assigned HFIN sub: Subcommittee #3

  9. Referred to Committee on Finance

  10. Prefiled and ordered printed; Offered 01-14-2026 26105358D

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.

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"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.

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Subjects

taxation education
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Frequently asked questions

What does HB 979 do?
Taxation provisions. Increases the standard deduction to $10,000 for single individuals, $15,000 for individuals eligible to claim head of household for federal tax purposes, and $20,000 for married individuals beginning in taxable year 2027 and indexes such deduction amount for inflation beginning in taxable year 2028. The bill also removes the aggregate amount of housing opportunity tax credits that may be claimed for qualified projects across all calendar years and exempts food purchased for human consumption and essential personal hygiene products from the local sales tax. The bill establishes two new tax brackets beginning on and after January 1, 2027, that tax income in excess of $600,000 but not in excess of $1,000,000 at a rate of eight percent and income in excess of $1,000,000 at a rate of 10 percent. Finally, the bill provides that 50 percent of revenues generated by the new tax brackets will be dedicated to localities for maintenance, operation, capital outlays, debt and interest payments, or other expenses incurred in the operation of public schools.
Who sponsors HB 979?
HB 979 is sponsored by Vivian E. Watts.
What is the current status of HB 979?
This bill is in committee in the House of Delegates. Introduced January 13, 2026. It must pass committee before a floor vote.
Where can I track HB 979?
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