The Virginia House of Delegates introduced House Bill No. 2264 on January 8, 2025, aimed at overhauling the state's tax filing system. This bill seeks to amend the Code of Virginia by repealing the existing Virginia Free File program established in 2010 and replacing it with a new, modern electronic tax return filing service.

The primary objective of HB2264 is to phase out the Virginia Free File program by December 31, 2027, and to implement a new system that allows Virginia taxpayers to file their taxes electronically without any fees, starting from January 1, 2028. This new program is designed to align with the IRS Direct File Program, which was introduced as part of the Inflation Reduction Act. The Tax Commissioner will be responsible for developing this service and must establish a memorandum of understanding with the IRS by August 1, 2025.

Key provisions of the bill include ensuring that all state tax forms are available in a fillable format on the Department of Taxation's website and providing guidelines for their use. The bill emphasizes that the new electronic filing service will not compete with existing online tax software options.

The introduction of HB2264 has sparked discussions among lawmakers and stakeholders regarding its potential impact on taxpayers and the efficiency of tax filing in Virginia. Proponents argue that the new system will simplify the tax filing process and reduce costs for taxpayers, while critics express concerns about the transition from the established Free File program and the potential challenges in implementing the new system.

As the bill progresses through the legislative process, its implications for Virginia's tax landscape and the experiences of taxpayers will be closely monitored. The outcome of this bill could significantly reshape how Virginians file their taxes, potentially setting a precedent for other states considering similar reforms.