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Bill

Bill

HB 609

Income tax, corporate; sourcing of sales, other than sales of tangible personal property.

2026 Regular Session Introduced by Joe McNamara

Redefines how Virginia taxes corporate income from services and non-physical property sales across state lines, potentially affecting business tax obligations and state revenue.

Assigned HFIN sub: Subcommittee #1
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Bill Summary · HB 609

Legislative bill overview

HB 609 modifies Virginia's corporate income tax rules for how businesses report income from non-tangible property sales (such as services, intellectual property, and digital goods). The bill specifically addresses the "sourcing" of these sales—determining which state gets to tax the income—by establishing new criteria for where this income is considered earned.

Why is this important

This change affects how Virginia collects tax revenue from service-based and tech companies operating across state lines. Companies headquartered or operating in Virginia could face different tax obligations, potentially making the state more or less competitive for business operations, and it impacts state budget projections.

Potential points of contention

  • Business competitiveness: Stricter sourcing rules could increase tax burdens on Virginia service companies operating nationally, potentially pushing them to relocate
  • Revenue implications: Changes to where income is taxed may shift revenue between Virginia and other states, affecting the state budget
  • Compliance complexity: New sourcing rules create additional accounting and reporting requirements for businesses operating multistate
  • Definition clarity: The specific criteria for sourcing non-tangible property sales may be ambiguous or difficult to apply consistently across industries

Compiled from official sources — confirm details with the bill’s official record.

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