Sponsor pitches phased corporate tax cut; staff flags $1.8 billion biennial cost
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Summary
A proposal to reduce Virginia's corporate tax rate to 2.25% over three years drew debate over competitiveness and budget tradeoffs. Staff estimated roughly $1.8 billion in biennial revenue loss; the committee moved to pass the bill by indefinitely.
Sen. Jordan presented SB 696 as a three‑year plan to lower Virginia's corporate tax rate to 4.75% in 2026, 3.5% in 2027 and 2.25% in 2028 to attract business investment. The sponsor cited recent relocations to neighboring states and argued a lower rate would signal Virginia's competitiveness to major employers.
Committee staff provided a fiscal estimate of approximately $1.8 billion over the biennium if the rate reductions were enacted as proposed. Members pressed the sponsor on how the state would replace that revenue for core services including education and transportation. Several senators said the projected budget gap made the measure untenable in the current fiscal environment and moved to pass the bill by indefinitely.
What happened: The committee voted to pass SB 696 by indefinitely, effectively halting the bill in this subcommittee.
Why it matters: Corporate tax changes carry broad implications for state revenues and spending priorities; proponents argue such changes are investments in jobs and growth while opponents cite near‑term funding shortfalls for existing services.
Provenance: Sponsor presentation begins at SEG 715; fiscal questioning and motion conclude around SEG 809–816.
