Bill to Commission Study on Single Sales Factor Prefiled in Virginia General Assembly

January 17, 2008

UPDATE: SJ 101 was approved by the Senate on January 30, 2008, and by the House on March 5, 2008.

On January 9, 2008, a bill (SJ 101) was prefiled to allow the Virginia House and Senate to study the benefits, economic impact and fiscal impact of adopting a single sales factor to apportion the income of multistate corporations for purposes of the corporation income tax. The bill has been referred to the Senate Committee on Rules.

The VSCPA strongly supports the legislation sponsored by Sen. Walter A. Stosch, CPA, a long-time VSCPA member proposing the bill on VSCPA’s behalf.

The bill states that a Single Sales Factor Advisory Work Group may be commissioned with interested parties, including representatives from the VSCPA, Virginia Chamber of Commerce and others. The Work Group would assist the study in developing research and potential economic impact models.

In Virginia, the corporation income tax of a multistate corporation is now figured by a three-factor formula — but 15 states have already shifted to a single-factor formula and seen positive changes in economic development.

“It’s important that we determine if the single sales factor would affect economic development in the Commonwealth,” VSCPA President & CEO Stephanie R. Peters, CAE, said. “If a study were to determine that the single-factor formula is desirable to the Commonwealth’s business and economic growth, Virginia CPAs, particularly those working in business and industry, may see additional benefit from a more uniform tax system.”

The bill states that some potential economic development projects in Virginia have “already been lost to other states that have implemented a single sales factor.”

For more information, contact VSCPA Government Affairs Director Erin Collins at (804) 422-6705.