As the 2026 General Assembly moves toward its scheduled adjournment next Saturday, several finance-related bills of interest to local governments are making their way to the Governor’s desk, while others have been continued to 2027 for further work, as outlined below.
Admissions tax: HB 550 (Anderson) and its companion bill, SB 400 (Diggs), would allow James City County and York County the option to impose a tax on admissions for attendance at any event. When legislation was enacted in 2020 providing counties with revenue options more closely aligned with those long available to cities and towns, it included a provision barring counties where an additional state sales and use tax (of which a portion is dedicated to tourism promotion) is levied from imposing admissions taxes. All other counties were permitted to impose a tax on admissions of up to 10 percent. This legislation removes this restriction and allows these counties the same option available to all other counties. VACo supports this bill and spoke in favor during the House subcommittee hearing.
Status update: Both bills await action by the Governor.
Personal property taxes: HB 960 (Watts) would change how tangible personal property employed in a trade or business is valued for purposes of personal property taxation. Under current law, this property is to be valued by means of a percentage or percentages of original cost; a 2014 Attorney General opinion held that “original cost” means the original cost paid by the original purchaser of the property from the manufacturer or dealer, and not the price paid by the current owner. HB 960 would define “original cost” to mean “original cost to the taxpayer.” VACo expressed concerns about the potential revenue impact to localities that have relied on the Attorney General’s opinion in valuing such property. To allow for further discussion of the issue, the patron added a reenactment clause on the bill in the House, meaning that the legislation would need to be considered again by the 2027 General Assembly.
Status update: The Senate Finance and Appropriations Committee continued the bill to 2027 due to concerns about fiscal impact.
HB 557 (Reaser) sets out electric-powered landscaping equipment employed in a trade or business as a separate class of personal property and allows localities to impose a tax rate on this equipment that is lower than the rate applied to general personal property.
Status update: The bill has passed both chambers.
Property tax exemptions: HB 175 (Feggans) would authorize a local governing body to provide up to a total exemption from real property taxes for property owned by the surviving spouse of a servicemember who died in the line of duty. Current law provides that such property qualifies for a full exemption if it does not exceed the average assessed value of a dwelling that is situated on property that is zoned as single family residential. If the value of the dwelling exceeds the average assessed value, the portion of the assessed value that exceeds the average assessed value is taxable.
Status update: Senate Finance and Appropriations continued the bill to 2027, mirroring the Committee’s action on a similar bill (SB 8 (DeSteph)) earlier this session.
HB 854 (Cousins) allows real or personal property owned by certain nonprofit organizations that provide affordable housing to be eligible for local-option property tax exemptions under localities’ authority to provide exemptions for property used for certain charitable or benevolent purposes. The bill allows this property to be considered under this category if it is owned by an ownership entity with a controlling interest held directly or indirectly by nonprofit organizations, even though there may be some for-profit ownership interest in the property.
Status update: This bill has now passed the Senate after being heard in the Senate Finance and Appropriations Committee, which added a technical amendment requested by the Commissioners of the Revenue to clarify how a suspension or termination of these exemptions would be stipulated in a local ordinance.
SB 181 (Williams Graves) allows a local governing body to provide for a partial tax exemption for real estate which is converted to affordable housing under certain circumstances. The partial exemption may be an amount equal to the increase in assessed value, or a percentage of the increase, but would be capped at the amount of expenses incurred in connection with the residential conversion, and would be limited to 15 years. The bill also allows localities to grant tax incentives or provide regulatory flexibility, such as a reduction in permit fees, a streamlined process for permit approval, or a reduction in gross receipts tax, to encourage qualifying residential conversions.
Status update: This bill was amended in the House to add provisions allowing the locality to recapture all or a portion of the exemption if the property no longer meets eligibility requirements, and to impose a rollback penalty on the new owner of the property if the property is sold and no longer qualifies for the exemption after the sale. The Senate agreed to the House’s revisions, so the bill now heads to the Governor.
Tax administration: HB 954 (Watts) addresses problems experienced by local Treasurers’ offices in making exact change for taxpayers who pay bills in cash after the United States Mint ceased production of penny coins last year. As passed by the House, among other provisions, the bill authorizes a local governing body to set out procedures for the adjustment of bills and account balances for taxes and other charges due to the locality, which could include rounding to the nearest five-cent increment or the write-down or write-off of sums due that are less than five cents. VACo supports this legislation, which was introduced at the request of the Treasurers’ Association of Virginia.
Status update: Senate Finance and Appropriations amended the bill to provide temporary authority for local governing bodies to set procedures for addressing cash transactions. This authority would expire July 1, 2027, and in the meantime, the Department of Taxation would evaluate options and recommend a uniform procedure for localities to adjust bills and account balances for taxes and other charges paid in cash. This bill has passed the Senate and must return to the House for consideration of the Senate’s amendments.
HB 915 (Lopez) authorizes a local governing body to allow an extension on personal property taxes owed by federal employees who are furloughed and essential federal employees who must work without pay during a federal government shutdown.
Status update: This bill has passed both chambers.
HB 1358 (Runion) and its companion, SB 649 (Obenshain), seek to improve awareness among buyers of real estate that property may be subject to use value assessment and taxation. The bills add language to the “buyer beware” statute setting out what must be included in a residential property disclosure statement that the owner provides to the buyer; under the bill, this statement must include notice that the owner makes no representations or warranties with respect to whether the property is located in a locality that has adopted a land-use plan that may provide for use value assessment and taxation for real estate. If a real estate settlement agent knows that the real estate is subject to use value assessment and taxation, the agent must provide a written notice, which would be developed by the Department of Taxation, to the purchaser.
Status update: These bills have passed the legislature and are on the way to the Governor’s desk.
HB 341 (Martinez) requires any county that has imposed a disposable plastic bag tax to distribute a portion of tax revenues to any town located within the county.
Status update: This bill is on the way to the Governor’s desk.
VACo Contact: Katie Boyle