Dec. 21, 2022
James Ford
Tax Policy Analyst
Virginia Department of Taxation
P. O. Box 546
Richmond, VA 23218-0546
Via email: [email protected]
RE: Elective Pass-Through Entity Tax Guidelines
Dear Mr. Ford:
The Virginia Society of Certified Public Accountants (VSCPA) Tax Advisory Committee has reviewed the Draft Guidelines for the Pass-Through Entity Tax developed in response to HB 1121 and SB 692 as passed during the 2022 Session of the Virginia General Assembly. The Committee appointed a special task force comprised of members who work with pass-through entity tax issues to provide feedback and recommendations on the draft guidelines.
In addition to feedback contained within the attached redline version of the draft guidelines, we offer the following comments:
- Additional clarification is needed related to credit for taxes paid to other states as it relates to apportionment. This appears to be something which can be addressed through guidance.
- The Committee strongly believes the definition of “qualifying pass-through entity” is too restrictive and disqualifies more PTEs than intended by the General Assembly.
The Virginia Society of Certified Public Accountants (VSCPA) is the leading professional association in the Commonwealth dedicated to empowering CPAs to thrive. Founded in 1909, the VSCPA has more than 13,000 members who work in public accounting, industry, government and education. Please feel free to contact me or VSCPA Vice President, Advocacy Emily Walker, CAE, at (804) 612-9428 or [email protected] if we can be of further assistance.
Sincerely, Sarah Adams, CPA
Chair, 2022–2023 Tax Advisory Committee
Virginia Society of CPAs
CC: Kristin Collins — Assistant Commissioner, Tax Policy
Patrick Cushing — VSCPA Legislative Counsel