Several bills related to local taxation were heard this week in the House Finance Committee.
Admissions taxes
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 subcommittee hearing. This bill is now on the House floor and SB 400 is on the Senate floor.
BPOL
HB 1199 (Scott, P.) would have authorized localities to exempt businesses regulated by boards within the Department of Health Professions from BPOL taxation. The bill sought to address issues encountered by certain cancer treatment practices whose gross receipts reflect reimbursement for costly cancer treatment drugs. Subcommittee members expressed some concern about the breadth of the language and the bill failed to report from subcommittee.
HB 956 (Watts) revisits an issue addressed in 2025 legislation, which had been referred to a workgroup convened by the Department of Taxation last summer. Under current law, receipts attributable to business conducted in another state or foreign country in which the taxpayer is liable for an income tax or other tax based on income are deductible from BPOL taxation. The bill would expand the deduction to encompass receipts attributable to business conducted in another state or foreign country that does not impose an income tax, but in which the taxpayer is subject to a business activity tax. VACo opposed this bill due to concerns about revenue impacts on localities and the additional complexity that would be introduced by expanding the deduction to cover other types of taxes, which may have different rules and thresholds for filing and payment. The bill failed to report from subcommittee.
Real estate taxes
HB 68 (McNamara) was introduced at the request of Roanoke County and would revise the process by which localities communicate with the public about the interaction between assessment growth and real estate tax rates. Currently, when growth in assessments would result in an increase of more than 1 percent in the total real property tax levied, the governing body must reduce the tax rate accordingly, unless it holds a public hearing. The notice for the public hearing, as well as the notice of change in assessment that is mailed to each property owner, must include a calculation showing the tax rate that would levy the same amount of real estate tax as the previous year when applied to the total assessed value of real property (excluding new construction or improvements). Under current law, this calculation makes no allowance for inflation in the value of real estate, which has often exceeded 1 percent. This bill would allow inflation to be excluded from assessment growth in making those calculations. VACo supports this bill, which was discussed in the Finance and Elections Steering Committee extensively last fall, and spoke in favor during the subcommittee hearing. In the subcommittee’s discussion, legislators expressed some reservations about how this change would be communicated to the public and the degree to which fewer public hearings might be required. The bill was continued to 2027 for further refinement.
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. This bill is on the House floor.
Personal property taxes
HB 960 (Watts) would have changed how tangible personal property employed in a trade or business is valued for 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, meaning that the legislation would need to be considered again by the 2027 General Assembly.
VACo Contact: Katie Boyle