Tax code conformity focus of Virginia House partisan fight

Legislation that would conform Virginia to the federal tax code is being held hostage by House Republicans.

“House Republicans seem determined to double down on the Trump tax plan,” Democratic Leader Eileen Filler-Corn said Monday. “From the beginning, our caucus has advocated to first pass conformity, so that Virginians do not run into complications with their 2018 tax returns, and then we can address legislative solutions to mitigate the damages from the Trump tax plan.”

When the bill introduced by Democrat Chris Jones was considered in committee on Jan. 28, House Republicans pushed forward a substitute that attached tax policy to what should have been a clean conformity bill. Not a single Democrat on the committee voted for that substitute, clearly demonstrating to Republicans a lack of support to conflate tax policy with conformity.

It was the substitute bill that failed to gain the required 80 votes on the House floor today. After that vote, Del. Marcus Simon proposed an amendment that would remove the Republicans’ added tax policy from the bill to restore HB2355 to its original clean conformity.

House Republicans rejected that amendment on a straight party-line vote, and they plan to strip the emergency clause from the bill so that they may pass it with their simple majority, which would throw 2018 tax returns into further chaos.

“Time and again we have seen House Republicans manipulate their small majority to block good legislation,” said House Democratic spokeswoman Kathryn Gilley. “It’s a shame that the Republicans have turned this important legislative session into one long campaign event.”

On Jan. 21, after Republicans stalled on addressing the issue of conformity for almost two weeks, Leader Filler-Corn and Senate Democratic Leader Dick Saslaw sent a joint letter to Finance Secretary Aubrey Layne, requesting an estimate of when Virginians would first experience disruption in their tax returns.

Secretary Layne responded that taxpayers would begin filing their 2018 returns on January 28 – House Republicans did not even schedule a committee hearing on HB2355 until that date.

In one of the multiple floor speeches House Democrats have given on conformity, Del. Rip Sullivan stressed, “Failure to conform in a timely manner could bring about a host of unintended consequences for the Commonwealth.”

The “lockbox” that House Republicans have added to HB2355 is intended to support HB2529, introduced by Del. Tim Hugo, which would exacerbate the unpopular Trump tax plan that disproportionately favors the wealthy.

At the request of House Republicans, JLARC studied the bill andreaffirmed the Department of Finance’s conclusion that the Republican tax plan would end up costing the Commonwealth more than the additional state revenues received, at the expense of funding important programs.