House Bill 2526 would would initially cut the income tax by 21.25 percent, with a trigger for bigger reductions in the future. This bill is a compromise from the 15 percent cut the Senate backed initially and the 50 percent cut the Governor and House of Delegates preferred.
Provided the bill completes action, the tax cut could increase in future years due to a formula that would measure general revenue collections in a fiscal year minus severance collections compared to 2019 as a base year. If collections are ahead of the base year figure, additional income tax cuts would be triggered.
According to the legislation, reductions could not be greater than 10 percent of the tax at a time. This trigger system would take effect in 2024.
The compromise also includes a personal property tax credit for vehicles, which was a priority for the Senate during the negotiations. Additionally the legislation contains a 50 percent personal property tax break aimed at small businesses, which are defined in the bill. There is also a tax credit for disabled veterans on personal income taxes on a homes.