by Liberty Unyielding Staff
Bills pending in the Virginia state legislature could raise the state income tax a lot. The bill most likely to pass would increase the state income tax rate from 5.75% to 8% on incomes over $600,000 and 10% on incomes over $1,000,000. Another bill would impose an additional 3.8% tax (a โnet investment income taxโ) on most income above $500,000.
If both bills pass, Virginia would have a 13.8% tax rate. That would be higher than what is currently the highest state tax rate in America, the 13.3% rate in California for households with million-dollar incomes. It would be far higher than the top tax rates in the region around Virginia, such as the 3.99% tax rate in North Carolina, the 4.82% rate in West Virginia, and the zero percent tax rate in Tennessee, which has no state income tax.
The bill most likely to pass is HB 979, introduced by Delegate Vivian Watts, D-Fairfax, the powerful chair of the Finance Committee in Virginiaโs House of Delegates. HB 979 โestablishes two new tax brackets beginning on and after January 1, 2027, that tax income in excess of $600,000 but not in excess of $1,000,000 at a rate of eight percent and income in excess of $1,000,000 at a rate of 10 percent.โ
โSomething like this has an excellent chance of passing now,โ said a Virginian who spent years lobbying Virginia legislators about tax and other issues.
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