House Finance Committee advances multiple tax bills; several referred to appropriations

The full House Finance Committee met in reported session and acted on bills that previously had public testimony in subcommittee, approving reporting motions and sending many measures to the Appropriations Committee for further review.

The committee’s action covered retail sales tax exemptions, property-assessment rules for affordable housing, refundable and nonrefundable income tax credits, and procedural changes including work groups and technical clarifications. Several bills were reported unanimously; several were reported by narrow margins.

Why it matters: The committee’s votes move multiple tax and revenue proposals forward in the legislative process. Several measures would change how Virginia calculates tax liability (including new credits and deductions), how local assessors treat affordable rental housing, and how state departments must develop forms or convene work groups to guide implementation.

Votes at a glance

- HB 1698 (Delegate Askew): Retail sales and use tax exemption for prescription medicines purchased by veterinarians — reported by the committee (full-committee vote reported in transcript as 16 to 0). Referred as reported; no amendments noted.

- HB 1970 (patron not specified in full-committee remarks): Clarifies that institutions licensed by the Department of Education that provide services under the federal Individuals with Disabilities Education Act are tax-exempt nonprofit educational institutions; includes an emergency clause — reported by the committee (vote reported as 17 to 0). Subcommittee had recommended reporting 8 to 0.

- HB 2049 (Delegate Sebel): Sales and use tax exemption for purchase of child restraint devices (car seats) — reported and referred to Appropriations unanimously (17 to 0).

- HB 2245 (Delegate Colson): Requires assessors to use the income approach when valuing real property operated in whole or in part as affordable rental housing; adds an owner reimbursement for reasonable attorney fees when an assessment fails to comply; directs the Department of Taxation to develop a short form; provisions to apply to assessments completed on or after July 1, 2026. Subcommittee recommended reporting 5 to 3. The full-committee substitute clarified that the income approach is not required if the relevant information is not provided; responses need not be made directly on the form; completing required information on the form creates a presumption of compliance; and only one representative of each listed entity is required on the stakeholder work group. (Full-committee final roll call for the substituted measure was unclear in the transcript and is recorded here as not specified.)

- HB 2302 (patron not specified): Property tax exemption for properties used for religious worship expanded to include property on which a church or building for religious worship is being replaced or built — reported with amendments unanimously (21 to 0).

- HB 2675 (Delegate Simon): Extends expiration of retail sales and use tax exemption for printed materials purchased by an advertising business from a printer in the Commonwealth when materials are distributed outside the Commonwealth — reported (18 to 2).

- HB 1598 (Delegate Cole): One-time nonrefundable individual income tax credit (taxable years 2025–2029) for up to $10,000 in first-time homebuyer expenses; credit must be repaid if the property is sold within three years — reported and referred to Appropriations (11 to 10).

- HB 1717 (Delegate Price): Allows eligible low-income taxpayers to claim a refundable income tax credit equal to 20% of the federal Earned Income Tax Credit (EITC); substitute adopted by subcommittee then reported and referred to Appropriations by the full committee (12 to 10).

- HB 1754 (Madam Chair): Amends standard deductions (substitute removes new top tax bracket, extends deduction amounts to $9,250 for single filers and $18,500 for married filers beginning taxable year 2025); technical amendment recommended by Department of Tax; reported and referred to Appropriations unanimously (22 to 0).

- HB 2180 (Delegate Tran): One-time refundable tax credit (taxable years 2025–2029) of $300 per dependent under age 13 for households with Virginia adjusted gross income under $100,000; refundable only for full-year Virginia residents; reported with amendments and referred to Appropriations (11 to 10).

- HB 1979 (Delegate Hernandez): Substitute limits portion of aggregate disposable earnings subject to garnishment for delinquent taxes/charges to 25% of disposable earnings; substitute adopted and reported (11 to 9).

- HB 2048 (Delegate Anthony): Requires the Department of Housing and Community Development to conduct an annual geographic assessment to guide allocation from the Housing Trust Fund so urban, suburban and rural regions receive a fair share — substitute adopted; reported and referred to Appropriations (11 to 10).

- HB 2108 (Delegate Herring): Increases the cap on the motion picture production tax credit from $6.5 million to $8.5 million — reported and referred to Appropriations (19 to 2).

- HB 2681 (Delegate Ballard): Substitute directs Department of Taxation to convene a work group on the treatment of net operating losses in Virginia and report findings and recommendations to money committees (work group to meet by Oct. 1, 2025; report due Nov. 1, 2025) — reported with substitute unanimously (21 to 0).

- HB 2404 (Chair Mundon King as patroned to full committee): Clarifies that driveways needed for access to 100% disabled veterans’ residences (and surviving spouses) should be included in property that qualifies for real-estate tax relief — reported unanimously (22 to 0).

- HB 1743 (Delegate Watts): Substitute modifies rules for attributing receipts and defines income-based taxes for certain purposes; delayed effective date of July 1, 2026; directs Department of Tax to convene a stakeholder work group and report to money committees — reported with substitute (21 to 0).

What the committee did not do: The full committee did not take public testimony on bills heard in subcommittee; the chair repeated that only bills previously heard in subcommittee were eligible for action in this full-committee session.

Next steps: Most measures were referred to the Appropriations Committee; those bills will be scheduled for further review, fiscal analysis and possible amendment.