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SB 211

Income tax, state; subtraction for incentive stock options.

2026 Regular Session Introduced by Bill DeSteph

SB 211 allows Virginia taxpayers to exclude incentive stock option gains from state income tax, reducing tax liability for employees exercising stock options.

Continued to next session in Finance and Appropriations (9-Y 5-N)
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Bill Summary · SB 211

Legislative bill overview

SB 211 proposes to allow Virginia taxpayers a state income tax subtraction for gains realized from incentive stock options (ISOs). This would exclude ISO gains from Virginia's taxable income calculation, similar to how some other states treat this form of employee compensation.

Why is this important

Incentive stock options are a common form of executive and employee compensation in technology and growth companies. This change would reduce state tax liability for employees exercising ISOs, potentially affecting Virginia's tax revenue while making the state more competitive for retaining tech talent and corporate headquarters.

Potential points of contention

  • Revenue impact: The fiscal impact statement suggests measurable tax revenue loss; lawmakers must weigh competitive benefits against state budget constraints
  • Equity concerns: ISO benefits flow primarily to higher-income employees and executives, raising questions about whether this represents regressive tax policy
  • Economic justification: Unclear whether Virginia needs this incentive relative to neighboring states, or if it duplicates existing federal tax advantages (ISOs already receive preferential federal treatment)

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

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