2025 General Assembly reflections

Ups (passing pipeline legislation) and downs (threats to rolling conformity) made this year’s Virginia General Assembly one for the books.

By Emily Walker, CAE

2025 marked my 17th legislative session representing the VSCPA. I really thought I had seen it all, only to have this year's Virginia General Assembly session kick off with another first. Richmond's unprecedented water crisis collided with the start of the session, shortening the already "short year" session by delaying the start by five calendar days, effectively resulting in a 41-day session instead of the normal 46-day session Virginia typically has in odd-numbered calendar years. Five days may not seem like a lot of time, but with nearly 2,500 bills to get through, every day counts. Once things finally did kick off, the pace was brutal and required constant vigilance to make sure we didn't miss anything important. 

The positives

Without a doubt, the VSCPA's biggest success of the 2025 Virginia General Assembly was the passage of our licensing and mobility legislation, signed by Gov. Youngkin on March 24. The additional pathway to CPA licensure will have a lasting impact on the CPA pipeline. Maintaining continued practice mobility now and in the future ensures Virginia will continue to be a national leader in the regulation of CPAs.

While most of the significant tax policy changes were made through the budget (more on that later), much of it was positive. Three work groups were created to study the following: 

1. Out-of-state deductions on Business, Professional and Occupational License (BPOL) taxes imposed by many Virginia localities.
2. Market-based sourcing.
3. The treatment of Net Operating Losses (NOLs). 

The VSCPA Tax Advisory Committee will participate in and monitor each of these three work groups. 

Additionally, I'm happy to share that the budget also addresses the sunset date for the popular pass-through entity tax (PTET), which was set to expire at the end of this calendar year. The budget passed by the General Assembly extended the sunset date by one year. Youngkin submitted a budget amendment that would have made PTET permanent; however, it was rejected by the Senate after being approved by the House of Delegates.  

The disconcerting

Speaking of the budget, it appears the Senate plans to address most tax policy issues through the budget for the foreseeable future, and this is concerning. The rules governing the budget process are different from standalone legislation and present far fewer opportunities for public input. Specifically, not all amendments to the budget are given a public hearing. This was on blatant display with the changes made to tax conformity through the budget. The amendment, which completely undermined rolling tax conformity by using enactment clauses to override the current statute, wasn't part of the budget until it was there in the committee reports sent to the floor for votes. And even then, the amendments were buried at the end of a particularly long budget item that contained the majority of other tax policy changes, including the extended sunset dates for PTET, the elevated standard deductions, and refundability of the earned income tax credit (EITC). Additionally, items in the budget are not severable, meaning legislators cannot make changes to individual line items; they must accept or reject the entire budget as a whole. 

Fortunately, we were able to negotiate a compromise that pauses rolling conformity for tax years 2025 and 2026, instead of making the originally proposed changes permanent. VSCPA members played a crucial role in achieving this compromise, having sent more than 800 messages to legislators urging them not to adopt the original proposed language. We could not have done it without your support!

What's next

On April 2, 2025, the Assembly held its Reconvened Session, a day when lawmakers return to vote on the governor's amendments to legislation and the budget. This session is sometimes referred to as the "Veto Session" because it provides the General Assembly with an opportunity to attempt to overturn the governor's vetoes. Overall, the majority of the governor's budget amendments were rejected, and none of the vetoes were overturned. As a result, the budget is now back in Youngkin's hands. He has 30 days to either sign it, reject it, or execute limited line-item vetoes. (At press time, Youngkin had not yet signed.)

2025 is an election year for governor, lieutenant governor, attorney general and all 100 members of the House of Delegates. Since Virginia governors cannot succeed themselves, we will have a new governor in 2026. There will almost certainly be turnover in the House as well, though how much remains to be seen and likely influenced by how Virginians feel about what is happening at the federal level by the time the general election rolls around in November. 

In the meantime, the VSCPA will be focused on cultivating champions in the Virginia Senate. And this is where you come in! You can start by telling us who you already know or are willing to build a relationship with. Are any current senators your clients or personal friends? Did you work on someone's campaign? Even if you aren't a constituent, these relationships can make all the difference on issues important to the profession. 

I am constantly awed by this profession and privileged to represent you. Thank you for trusting me to be your advocate! Please let me know how I can continue to serve you. 

Emily Walker, CAE, VSCPA vice president, advocacy and pipeline, oversees and provides strategic direction for VSCPA government affairs programs, including legislative and regulatory activities, grassroots initiatives, and the VSCPA Political Action Committee (PAC). She also oversees the peer review program and CPA pipeline activities. Emily joined the VSCPA in 2003 and spends her time outside of work rooting for her twins who play collegiate soccer and lacrosse. Follow Emily on LinkedIn.