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HB 977

Tax laws of the Commonwealth; conformity to the Internal Revenue Code.

2026 Regular Session Introduced by Vivian Watts

HB 977 aligns Virginia's tax code with federal Internal Revenue Code, potentially changing state tax calculations and revenue projections pending Appropriations Committee review.

Committee substitute printed 26106211D-H1
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WeVote Research Nonpartisan
Bill Summary · HB 977

Legislative bill overview

HB 977 updates Virginia's state tax code to conform with the federal Internal Revenue Code, likely incorporating recent federal tax law changes. The bill has progressed through House Finance Committee with a substitute version and is currently under review in the Appropriations Committee. This type of "conformity bill" is routine legislation that ensures state tax calculations align with federal definitions and structures.

Why is this important

Tax conformity bills directly affect how Virginians calculate state income taxes and business taxes—misalignment between state and federal codes creates complexity for taxpayers and administrative confusion. Virginia's tax revenue projections depend on maintaining consistent definitions of taxable income with federal law, so changes can have significant budget implications. The fiscal impact statement suggests this bill has measurable financial consequences that the Appropriations Committee must evaluate.

Potential points of contention

  • Revenue impact ambiguity: The bill's effect on state tax collections depends on which specific IRC provisions it adopts; some federal changes reduce revenue while others increase it
  • Timing of federal changes: Adopting newly amended federal tax code provisions means Virginia's effective tax rates may shift unpredictably if federal law changes before state implementation
  • Business vs. individual taxpayer effects: Federal conformity may benefit some taxpayer groups while disadvantaging others, creating fairness concerns without explicit legislative debate on those tradeoffs

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

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