General Overview

The 2025 House Bill 1743 (Chapter 192) requires Virginia Tax to convene and facilitate a work group to review the local license tax deduction in Virginia for receipts attributable to out-of-state business, including a review of: 

  • Current policy and methodology of the deduction set forth in Va. Code § 58.1-3732 (B)(2);
  • Any constitutional or case law concerns regarding the existing laws governing such deduction;
  • Any potential impact on local government revenue as a result of determining such deduction based upon receipts subject to a net income tax or gross receipts tax in another state or foreign jurisdiction and alternatives to phase in any such potential impact;
  • The potential administrative complexities or benefits for taxpayers and the support structure necessary to verify across local jurisdictions the applicable tax deduction and to enforce compliance; and
  • Any impact to such deduction from other existing provisions of law. 

Virginia Tax is required to publish a report of any findings and recommendations

Legislative Documents

Work Group Documents