HB 977 Virginia House of Delegates · 2026 Regular Session

Tax laws of the Commonwealth; conformity to the Internal Revenue Code.

Summary
Conformity of the tax laws of the Commonwealth to the Internal Revenue Code. Repeals rolling conformity and reestablishes fixed date conformity with the Internal Revenue Code as it existed on December 31, 2024, for Virginia income tax purposes beginning with taxable year 2025. Under current law, Virginia conforms to federal tax changes as soon as they are enacted by Congress, with certain exceptions. Virginia deconforms from any amendment that would increase or decrease general fund revenues by more than $15 million in the fiscal year in which the amendment was enacted or any of the succeeding four fiscal years. The $15 million threshold is adjusted for inflation annually beginning in 2024. Virginia also deconforms from all amendments occurring between adjournment sine die of the previous regular session and the first day of the subsequent regular session if the cumulative impact of such amendments would increase or decrease general fund revenues by more than $75 million in the fiscal year in which the amendments were enacted or any of the succeeding four fiscal years. Deconformity under rolling conformity does not apply to any federal tax changes that the General Assembly subsequently adopts or to any federal tax extender. However, the twelfth enactment of the 2025 Appropriation Act temporarily paused rolling conformity generally for any federal tax changes enacted on or after January 1, 2025, but before January 1, 2027, and thereby still required Virginia to conform to any federal tax changes that the General Assembly subsequently adopts and to any federal tax extenders.
Bill status in committee 1 of 4 stages cleared
Introduction
Jan 2026
Committee Review
Floor Vote
Governor
Introduced Jan 13, 2026 Last action Feb 18, 2026
Maddy AI version diff · 1 comparison

What changed between versions

Introduced Finance Substitute · 4 edits
MODERATE
This bill was amended from its original introduction to a Finance Committee substitute version. The most significant changes involve expanding the scope of tax conformity to include additional sections of the Code of Virginia, updating the date for certain threshold calculations from 2023 to 2026, and adding new provisions related to the federal Budget Reconciliation Act of 2025 regarding research expenditures and asset expensing limits.
Scope change
The bill now amends four sections of the Code of Virginia (58.1-301, 58.1-322, 58.1-322.03, and 58.1-402) instead of just one section, broadening its scope to cover additional taxation provisions related to conformity with federal tax law.
TIMELINE

The date for certain threshold calculations was updated from January 1, 2023 to January 1, 2026, affecting when certain federal tax amendments trigger revenue impact thresholds.

REQUIREMENT

New provisions were added to conform Virginia tax law to the federal Budget Reconciliation Act of 2025, including rules for research and experimental expenditures and increased expensing limits for depreciable business assets.

SCOPE

The bill now includes amendments to three additional Code sections (58.1-322, 58.1-322.03, and 58.1-402) beyond the original single section, expanding the range of tax conformity rules.

TECHNICAL

Minor technical changes include adding § 168(n) to the list of special depreciation allowances and adjusting line numbering and formatting throughout the document.

Floor votes

How they voted

No floor votes recorded yet.
Full legislative history

Actions timeline

Total actions
10
Key actions
5
Committee
6
Feb 18, 2026
Lower · Passed
Left in Committee Appropriations
lower
Jan 28, 2026
Lower · Passed
Reported from Finance with substitute and referred to Appropriations (22-Y 0-N)
lower
Jan 28, 2026
Lower · Passed
House committee offered
lower
Jan 26, 2026
Lower · Passed
House subcommittee offered
lower
Jan 16, 2026
Lower · Passed
House committee offered
lower
Jan 13, 2026
Committee
Referred to Committee on Finance
lower
1 primary · 0 co-sponsors

Sponsors

Role
Legislator
Party
State
District
P
Photo of Vivian Watts
Vivian Watts
DDemocratic
VA
14