The bill conforms state law to match the federal GOP tax cut bill, but includes extra refunds for many taxpayers this fall and additional deductions on returns filed starting next year that are meant to offset nearly all state tax increases due to the federal legislation.
The Virginia Department of Taxation can now prepare its systems to process 2018 returns, including those already filed over the last few weeks. The returns are processed in the order received.
“As you may expect, we already have a significant backlog, so you may experience slower turnaround times for refunds than in years past,” Tax Commissioner Craig Burns said in a statement.
The delays were due to a dispute in the General Assembly over how any tax benefits should be distributed and whether any of the additional revenue should be kept in the state budget for other priorities.
The eventual agreement met Republicans’ push to prevent any significant state tax hike due to the federal tax cuts, but added some Democratic priorities of distributing more of the benefits of the tax changes than initially proposed to people who make less money.
It means the new spending proposed based on the increased revenue has been eliminated from budget plans in both the House and Senate. The two sides must reach an agreement by the end of the General Assembly session a week from Saturday.
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