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Bill

HB 33

Income tax, state; pass-through entities, sunset.

2026 Regular Session Introduced by Will Davis and 1 co-sponsor

HB 33 modifies Virginia income tax treatment of pass-through entities with automatic expiration, affecting business taxation and state revenue.

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Bill Summary · HB 33

Legislative bill overview

HB 33 proposes modifications to Virginia's income tax treatment of pass-through entities (such as S-corporations, partnerships, and LLCs) and includes a sunset provision that would expire these changes after a specified period. The bill aims to adjust how these business structures are taxed at the state level while building in a mechanism for the policy to automatically terminate unless renewed by the legislature.

Why is this important

Pass-through entities represent a significant portion of Virginia's business landscape and tax base, affecting both business owners and state revenue. Tax policy changes for these entities can influence business formation decisions, economic competitiveness, and state revenue stability—making this relevant to entrepreneurs, investors, and state budget planning.

Potential points of contention

  • Revenue impact: The fiscal impact statement suggests potential effects on state revenue; critics may debate whether any tax relief reduces funds for public services while supporters may argue it improves business competitiveness
  • Equity concerns: Changes to pass-through entity taxation could benefit higher-income business owners differently than wage earners, raising fairness questions about tax policy design
  • Sunset mechanism uncertainty: The automatic expiration creates planning challenges for businesses and budget predictability issues for the state, requiring future legislative action to maintain or modify the policy

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

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