The VSCPA believes adopting rolling conformity would provide Virginia taxpayers better ability to plan for and prepare their Virginia taxes, as well as allow for more timely updates to tax preparation software and offer potential administrative cost savings to the Commonwealth. With that in mind, the VSCPA is releasing a white paper supporting adoption of rolling conformity in the Virginia General Assembly this session.
In the simplest terms, tax conformity for individuals is the calculation of federal adjusted gross income; for businesses, it is federal taxable income. Three approaches to conformity exist:
Fixed date or “static” conformity
Virginia currently employs a fixed state of conformity, retroactively conforming to federal codes each year. This method requires emergency legislation to pass our part-time legislature and results in annual ambiguity for both taxpayers and practitioners. Switching to rolling conformity will provide certainty for Virginia taxpayers, tax preparers, software manufacturers and the Virginia Department of Taxation itself. Making the change will not limit lawmakers in any way from taking action on tax policy or enacting new legislation.
Please review our white paper and join us in advocating for a smarter tax conformity policy that will simplify tax filings for every Virginia resident or business. We’ve fought these annual battles on conformity for long enough — the time to make a change is now. Members and staff will be communicating rolling conformity with Virginia legislators during the 2020 General Assembly Session. You can join too at CPA Assembly Day on Jan. 1, 2020. Learn more and register today.
Questions or thoughts about rolling conformity? Let us know! Contact Tim Barry at [email protected]