Wrapping Up the 2026 Virginia General Assembly Session

Each General Assembly session tells a story. This year’s story wasn’t defined by a single piece of legislation but by where the most important decisions were made.

In 2026, some of the most consequential tax policy changes and discussions didn’t move through standalone bills — they happened in the budget. And for CPAs, that shift matters. If consequential tax decisions are included in budget bills, transparency decreases, timelines compress, and opportunities for input will be limited.

We’ll have to be agile; how we advocate will change. We will engage earlier in the legislative process, create stronger (and different) relationships, and ask members to help in different ways. These tactics will ensure the CPA perspective is part of the conversation before decisions are made behind closed doors.

The Virginia General Assembly adjourned this year on March 14, 2026, notably without passing a state budget. Negotiations stalled largely over the future of the data center sales and use tax exemption. That alone is significant, but it more broadly reflects how complex and high stakes the budget process has become in Virginia.

Below are the areas the VSCPA worked on and watched closely this year.

PTET exemption: Made permanent

The caboose budget bill made Virginia's pass-through entity tax (PTET) election permanent. From a policy standpoint, permanency is a clear win, providing long-term certainty for taxpayers and practitioners and removing a layer of unpredictability that had surrounded the election.

From a process standpoint, however, including this in the caboose budget bill instead of standalone legislation reinforces a growing trend: major tax policy decisions are increasingly being made through the budget rather than through the traditional legislative process.

Rolling conformity: Repealed

That same dynamic played out with rolling income tax conformity, which was also addressed in the caboose budget and ultimately repealed, to the VSCPA’s disappointment.

Rolling conformity, a major VSCPA legislative victory, was enacted in 2023 following significant member advocacy and provided greater predictability for taxpayers and practitioners. It had embedded revenue safeguards and offered clarity and simplicity. Its repeal means practitioners will once again need to navigate timing differences and state-federal mismatches more closely. On a small positive note, automatic conformity to extenders was retained.

The caboose budget specifically included the fixed conformity date of Dec. 31, 2025, and legislators will once again have to pass conformity legislation each year. On Feb. 20, 2026, the Virginia Department of Taxation released Tax Bulletin 26-1 detailing the changes.

Licensure: A step forward

Exciting news for long-time CPAs! Virginia will now establish Emeritus and Inactive statuses for CPA licenses, providing greater flexibility for professionals transitioning out of active practice while maintaining appropriate guardrails around the use of the credential.

This thoughtful modernization reflects how CPA careers are evolving and aligns Virginia more closely with other states. Additionally, these statuses will be options for CPAs who’d like to volunteer their expertise for nonprofit organizations. Watch VSCPA communications — we’ll walk you through these statuses this year.

Sales tax on services: Averted

We continue to see proposals to expand Virginia’s sales tax to personal services. While none advanced this session and professional services, including accounting, were not included, the pressure is there. There’s a broader shift in how policymakers are thinking about Virginia’s tax structure and we need to stay on high alert.

For CPAs, that creates both risk and responsibility. There is an opportunity to engage early and bring a practical lens to these conversations, particularly around administration, compliance and economic impact.

What’s next?

Gov. Abigail Spanberger has until April 13, 2026, to sign legislation, and the General Assembly plans to return April 23 for a special session to focus on the budget. Looking ahead, there are several strategic opportunities for the VSCPA’s advocacy efforts:

1. Expand CPAs’ voice in designing tax proposals: Instead of reacting to proposals, CPAs should have their knowledge and expertise considered before bills are even introduced.
2. Cultivate key relationships: We’ll need to build relationships to influence policymakers before decisions move behind closed doors.
3. Broaden advocacy beyond tax issues: CPAs are much more than just tax savants. We must position CPAs as credible voices on business policy, economic impact, and compliance realities.
4. Strengthen thought leadership: Members’ insights can be used to inform policymakers and elevate the profession’s visibility.

The final word

Despite headline-grabbing tax proposals, most didn't actually pass. But the 2026 session revealed something more important: the direction of future debates and the process by which they’ll be decided. CPAs will need lean into the profession’s role as a trusted, nonpartisan advisor and help shape policies that are not only well-intended but workable.

Emily Walker, CAE, is the VSCPA vice president, advocacy & pipeline.