On Feb. 27, Gov. Terry McAuliffe signed HB 480 into law, conforming the Virginia tax code with federal law related to Interest Charge-Domestic International Sales Corporations (IC-DISC). This tax incentive allows exporters to exclude a portion of qualifying export income from federal taxation, instead taxing it at the lower qualified dividend income rate.
The bill was introduced at the VSCPA’s request and passed all stages of the General Assembly unanimously, with the exception of one “nay” vote in a House Finance subcommittee.
The IC-DISC incentive was enacted on the federal level in 1984 and was made permanent in 2012 as part of the American Taxpayer Relief Act (ATRA).
“Once delegates and senators understood the mechanics and why this was a benefit to Virginia, as opposed to having more and more states adopt this and Virginia not and therefore Virginia becoming less competitive, it was a pretty easy process,” VSCPA member Ryan Losi, CPA, said.
A companion bill, SB 515, has passed the House and Senate and is awaiting McAuliffe’s signature.
As a bonus, watch Losi’s testimony before the House Finance Committee regarding the bill.