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Tax Reform and Tax Conformity

 

Conformity is in jeopardy. We need your help!

We still need your help to get the Virginia General Assembly to introduce and pass conformity as a standalone bill with an emergency clause. Use our VoterVoice tool to get that message across.

Conformity Updates

DEC. 26, 2018: The VSCPA has developed resources for communicating the importance of conformity to your clients and other non-CPAs. Click here (DOCX) for a sample letter you can send to your clients explaining the issue. Frequently asked questions about conformity can be found here or in printable format (DOCX).

DEC. 18, 2018: VSCPA Vice President, Advocacy Emily Walker, CAE, and President & CEO Stephanie Peters, CAE, discussed the current state of conformity at the VSCPA's Virtual Professional Issues Update on Dec. 13. Click here (MP3) to listen to their discussion.

NOV. 15, 2018: VSCPA Vice President, Advocacy Emily Walker, CAE, sat down with VSCPA member and former Virginia Sen. Walter Stosch, CPA, to discuss the importance of tax conformity and the potential repercussions if conformity legislation is not passed. Click here (MP3) to listen to their conversation.

Why Conformity?

For tax conformity to be enacted immediately and not wait until July 1 (the enactment date for most legislation), the bill must contain an emergency enactment clause, which requires an 80 percent affirmative vote to pass in each chamber. We believe it is unlikely any tax reform proposal will attain an 80 percent affirmative vote. Therefore, we are asking the legislature and Governor to make an early decision to fully conform for 2018 while continuing to debate the best solution for tax policy reform moving forward.

The VSCPA has released a whitepaper, "Virginia Tax Conformity: 2018 and Beyond" (PDF), detailing its official position on tax conformity in Virginia as it relates to the Tax Cuts and Jobs Act, including its recommendations for the General Assembly and Gov. Ralph Northam.

The paper was developed over the course of several months in response to the TCJA and the General Assembly’s decision to take up tax conformity in the 2019 session. The VSCPA made the following recommendations for the 2019 session:

  • Pass Virginia tax conformity for 2018 tax returns as early as possible and align Virginia tax law to federal law as closely as possible.
  • Automatically apply abatement for any tax penalties incurred due to uncertainty regarding the adoption of federal changes by Virginia and require no action to be taken by taxpayers or their representatives.
  • Sequester any new revenue gained for calendar year 2018 by conforming to federal law until a decision on policy is made, which is similar to the action Virginia took after sweeping new federal tax law changed in 1986.
  • Delay the effective date to no earlier than Jan. 1, 2019, for any tax policy changes resulting from conformity to the TCJA, including adjustments to the individual and business provisions to provide relief for taxpayers adversely impacted by the federal changes.
  • Delay the effective date to no earlier than Jan. 1, 2019, for comprehensive tax reform, in order to permit an accounting for additional revenues and to permit orderly and efficient implementation of the impact of the TCJA on Virginia and result in full conformity to federal tax law.

Tax Conformity News

Money Mayhem: State Lawmakers Begin a Short Session With Giant-Sized Issues — and Financial Quandaries Looming
Style Weekly, Jan. 15, 2019

Republicans Want to Take Up Tax Conformity and Policy Together, Which Could Make Filing and Refunds Difficult for Virginians
Virginia Mercury, Jan. 7, 2019

GOP Races for Deal to Lower State Taxes
Washington Times, Jan. 7, 2019

Republicans Outline Tax Plan Ahead of Session
U.S. News & World Report, Jan. 4, 2019

Republicans Outline Tax Plan Ahead of Session
Bristol Herald Courier, Jan. 4, 2019

Republicans Outline Tax Plan Ahead of Session
Richmond Times-Dispatch, Jan. 4, 2019

Republicans Outline Tax Plan Ahead of Session
Danville Register & Bee, Jan. 4, 2019

Republicans Outline Tax Plan Ahead of Session
Lynchburg News & Advance, Jan. 4, 2019

Republicans Outline Tax Plan Ahead of Session
Roanoke Times, Jan. 4, 2019

Republicans Outline Tax Plan Ahead of Session
WHSV-TV, Jan. 4, 2019

Republicans Outline Tax Plan Ahead of General Assembly Session
Loudoun Times-Mirror, Jan. 4, 2019

Op/Ed: A Pressing Issue This Year: Tax Conformity
Richmond Times-Dispatch, Jan. 1, 2019

Op/Ed: Legislators Must Act for Tax Conformity
Virginian Pilot, Dec. 15, 2018

Op/Ed: Virginia Should Quickly Adopt Tax Conformity, Resolve Policy Debates Separately
Virginia Mercury, Dec. 12, 2018

Virginia Tax Policy Changes Carry Big Price (PDF)
Culpeper Star-Exponent, Nov. 16, 2018

Virginia Tax Policy Changes Carry Big Price, So Does Potential Loss of Gas Tax Revenue
Richmond Times-Dispatch, Nov. 16, 2018

Virginia Could Be Out $370M if State Tax Code Isn't Changed (PDF)
Culpeper Star-Exponent, Oct. 26, 2018

Va. Could Be Out $370M if it Does Not Fix Tax Code (PDF)
The Daily Progress, Oct. 26, 2018

Updating Tax Code Is Crucial for State (PDF)
Martinsville Bulletin, Oct. 26, 2018

Va. Could Be Out $370M if it Does Not Change State Tax Code to Reflect Federal Changes, Finance Secretary Says
Richmond Times-Dispatch, Oct. 25, 2018

Op/Ed: General Assembly: Adopt Full Conformity
VirginiaBusiness.com, Oct. 19, 2018

Editorial: Northam's Tax Plan Hits Hard Workers
Richmond Times-Dispatch, Sept. 20, 2018

News to Know Blog: Virginia Society of Certified Public Accountants Called on State Lawmakers to Conform the State Tax Code With New Federal Tax Law
Virginia Mercury, Sept. 18, 2018

Virginia Accountants Call for 'Early and Complete Conformity' With New Federal Tax Law, Delay on Policy Changes
The Daily Progress, Sept. 18, 2018

Virginia Accountants Call for 'Early and Complete Conformity' With New Federal Tax Law, Delay on Policy Changes
Richmond Times-Dispatch, Sept. 18, 2018

VA CPAs Say Conform, Hold Tax Funds for Later
Bacon's Rebellion, Sept. 18, 2018

Op/Ed: An Unexpected Opportunity
Daily Press, Sept. 15, 2018

Nonsense Surrounds Virginia's Tax Policy
Washington Post, Sept. 7, 2018

Gordon C. Morse: Tax Windfall Means Different Things to Virginia's Leaders
Virginian Pilot, Aug. 26, 2018

Which Tax Relief Option Will Virginia Officials Choose?
Martinsville Bulletin, Aug. 19, 2018

Northam Says He Wants to Use Money From Federal Tax Cuts to Refund Low-Income Families
Richmond Times-Dispatch, Aug. 10, 2018