On Saturday, Feb 25, 2023, the Virginia General Assembly adjourned Sine Die, closing out a “short” 46-day session. Overall, the legislature considered over 2,800 bills, with more than 1,600 bills passing both chambers. However, budget negotiations will likely continue over the next several weeks since a comprehensive budget was not adopted.

Looking further into 2023, all 140 seats of the General Assembly are up for election/reelection. Since these campaigns will occur in newly drawn legislative districts, there are many significant primary races already underway. The legislature will be vastly different next year due to redistricting and retirement announcements.

As of adjournment, several retirements have already been announced, including Senator Dick Saslaw, Democratic majority leader of the Virginia Senate. Senator Saslaw is the longest-serving member of the Senate, which he joined in 1980 after serving four years in the House of Delegates.  Senator Tommy Norment, Senate Minority leader and longtime political powerhouse in the General Assembly, has also recently announced he does not plan on seeking re-election in the  2023 elections. Other Legislators that have officially announced their retirement are Senator Jill Vogel and Delegates Jeff Bourne, Mike Mullin, Ken Plum, Jim Edmonds, Kathleen Murphy, Tim Anderson, Rob Bell, Margaret Ransone, Roxanne Robinson, Dawn Adams, and Kathy Byron.

On Tuesday, February 21st Senator Jennifer McClellan, D-Richmond, was elected to serve in the United States Congress. There was a firehouse primary held Sunday, February 26th to determine the Democratic nominee for the Special Election that will be held on March 26th to fill the now vacant Senate seat. Delegate Lamont Bagby handily won the primary beating Delegate Dawn Adams as well as Alexsis Rodgers.

While the legislature adjourned on time, they did not complete a comprehensive budget package. The Republican-led House of Delegates has insisted on the Governor’s tax cut priorities, while the Democratic-controlled Senate held the line on tax cuts in favor of investing additional dollars in their priority initiatives. To adjourn on time, the General Assembly approved a “skinny budget”, only addressing urgent budget needs to buy time for the conferees to continue negotiating over the Governor’s proposed tax cuts. The “skinny budget” short-term agreement included four main amendments to the budget: funding to cover the previous calculation error by the Virginia Department of Education and make sure that local school divisions are kept whole, the rainy day fund contribution, Virginia Retirement System Contribution, and funding for previously authorized Capital projects.

The passing of the “skinny budget” leaves all other budget amendments in limbo, including the Governor’s proposed tax cuts. Budget conferees have stated that they plan to continue to negotiate a comprehensive budget package to see if an agreement can be reached on the major sticking points. We will continue to monitor budget negotiations and the potential for a special session to approve a comprehensive budget package.

You will find an overview of issues, broken down by category and status, that impact the Retail Industry below. To view a complete bill tracking list, click here. 

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Organized Retail Crime

HB 1885: Organized retail theft; establishes as a crime, report, penalty. Passed the House (52-Y 47-N), Passed the Senate with Substitute (32-Y 7-N), House agreed to Substitute (52-Y 45-N). Now will be communicated to Governor Youngkin.

Establishes the crime of organized retail theft that makes it a Class 3 felony for any person to (i) conspire or act in concert with another person to commit simple larceny of retail property from one or more retail mercantile establishments, with a value exceeding $5,000 aggregated over a 90-day period, with the intent to sell such retail property for monetary or other gain, and to take or cause such retail property to be placed in the control of a retail property fence or other person; (ii) receive or possess any retail property that has been obtained by simple larceny from one or more retail mercantile establishments in violation of clause (i) while knowing or having reasonable grounds to believe the property was unlawfully obtained; or (iii) conspire or act in concert with two or more other persons as an organizer, supervisor, financier, leader, or manager to engage for profit in a scheme or course of conduct to effectuate the transfer or sale of property obtained by simple larceny from one or more retail mercantile establishments in violation of either of clause (i) or clause (ii). The bill defines the terms retail mercantile establishment, retail property, and retail property fence. The bill makes it a Class 5 felony for any person to injure property during an act or attempted act of organized retail theft when the value of or damage to the property, memorial, or monument is $1,000 or more. The bill provides that any person convicted of a second larceny offense shall be confined in jail not less than 30 days nor more than 12 months and that for a third or any subsequent offense, he is guilty of a Class 6 felony. The bill also establishes the Organized Retail Crime Fund to be administered by the Attorney General solely for the purposes of awarding grants to attorneys for the Commonwealth and law-enforcement agencies to investigate, indict, and prosecute violations of organized retail theft and associated fraud and property crimes.

SB 1396: Organized retail theft; report; penalty. Passed the Senate (27-Y 13-N), Passed the House with Substitute (52-Y 44-N), Senate agreed to Substitute (32-Y 8-N). Now will be communicated to Governor Youngkin.

Establishes the crime of organized retail theft that makes it a Class 3 felony for any person to (i) conspire or act in concert with another person to commit simple larceny of retail property from one or more retail mercantile establishments, with a value exceeding $5,000 aggregated over a 90-day period, with the intent to sell such retail property for monetary or other gain, and to take or cause such retail property to be placed in the control of a retail property fence or other person; (ii) receive or possess any retail property that has been obtained by simple larceny from one or more retail mercantile establishments in violation of clause (i) while knowing or having reasonable grounds to believe the property was unlawfully obtained; or (iii) conspire or act in concert with two or more other persons as an organizer, supervisor, financier, leader, or manager to engage for profit in a scheme or course of conduct to effectuate the transfer or sale of property obtained by simple larceny from one or more retail mercantile establishments in violation of either of clause (i) or clause (ii). The bill defines the terms retail mercantile establishment, retail property, and retail property fence. The bill makes it a Class 5 felony for any person to injure property during an act or attempted act of organized retail theft when the value of or damage to the property, memorial, or monument is $1,000 or more. The bill provides that any person convicted of a second larceny offense shall be confined in jail not less than 30 days nor more than 12 months and that for a third or any subsequent offense, he is guilty of a Class 6 felony. The bill also establishes the Organized Retail Crime Fund to be administered by the Attorney General solely for the purposes of awarding grants to attorneys for the Commonwealth and law-enforcement agencies to investigate, indict, and prosecute violations of organized retail theft and associated fraud and property crimes.

Minimum Wage

HB 1924: Minimum wage; employees with disabilities. Passed the House (100-Y 0-N), Passed the Senate with Substitute (22-Y 18-N). Now will be communicated to Governor Youngkin.

Minimum wage; employees with disabilities. Provides that individuals with disabilities that are paid at subminimum wage pursuant to the federal Fair Labor Standards Act are employees for the purposes of the Virginia Minimum Wage Act. The bill requires every employer of such employees to pay such employees wages at a rate not less than the current Minimum wage in Virginia starting July 1, 2023, if authorized to employ individuals with disabilities at subminimum wage pursuant to a special certificate issued under 29 U.S.C. § 214(c) on or after July 1, 2023. Starting October 1, 2027, every employer who is authorized to employ individuals with disabilities as subminimum wage pursuant to the above certificate, issued prior to July 1, 2023, is required to pay wages at a rate not less than the current minimum wage in Virginia.

Defeated Bills

HB 1669: Minimum wage; payment to employees younger than the age of 18. Referred back to Committee from House Floor (defeated)

Minimum wage; employees younger than the age of 18. Requires employers to pay employees younger than the age of 18 wages at a rate not less than the greater of (i) $9.00 per hour or (ii) the federal minimum wage.

Workforce Development

HB 2195: Workforce development; consolidation of policies and programs, etc. Passed the House (54-Y 45-N), Passed the Senate with Substitute (39-Y 0-N), House agreed to Substitute (96-Y 1-N). Now will be communicated to Governor Youngkin.

Creates the Department of Workforce Development and Advancement (the Department) to administer workforce development programs. The bill consolidates statewide workforce program evaluation and data sharing under the Department and provides protections against improper disclosure of data. The bill provides for the Virginia Board of Workforce Development to conduct an independent evaluation of the operations and program objectives of the Department on a biennial basis with the first report due on December 1, 2025. The bill also (i) transfers administration of apprenticeship programs from the Department of Labor and Industry to the Department, (ii) moves the Innovative Internship Fund and Program from the State Council of Higher Education for Virginia to the Department, and (iii) directs the Secretary of Labor (the Secretary) to conduct a comprehensive review of the Commonwealth's workforce development programs and make recommendations to address a wide range of subjects relating to improving the effectiveness and efficiency of such programs. The Secretary is also required to convene a stakeholder work group to advise the Secretary during the transition period. This bill is a recommendation of the Small Business Commission.

SB 1470: Workforce development; consolidation of policies and programs, etc. Passed the Senate (40-Y 0-N), Passed the House with Substitute (98-Y 0-N), Senate agreed to Substitute (40-Y 0-N). Now will be communicated to Governor Youngkin.

Creates the Department of Workforce Development and Advancement (the Department) to administer workforce development services and training programs. The bill consolidates statewide workforce program evaluation and data sharing under the Department and provides protections against improper disclosure of data. The bill provides for the Virginia Board of Workforce Development to conduct an independent evaluation of the operations and program objectives of the Department on a biennial basis with the first report due on December 1, 2025. The bill also (i) transfers administration of apprenticeship programs from the Department of Labor and Industry to the Department, (ii) creates the Office of Business Engagement and Outreach within the Department, and (iii) directs the Secretary of Labor (the Secretary) to conduct a comprehensive review of the Commonwealth's workforce development programs and make recommendations to address a wide range of subjects relating to improving the effectiveness and efficiency of such programs. The Secretary is also required to convene a stakeholder work group to advise the Secretary during the transition period. This bill is a recommendation of the Small Business Commission.

Paid Leave and Unpaid Leave

Active Bills

HB 1886: Insurance agents; definitions; private family leave insurance. Passed the House (99-Y 0-N) and Passed the Senate (40-Y 0-N). Now will be communicated to Governor Youngkin.

Expands the definitions of "health agent" and "property and casualty insurance agent" to include that such agents may sell, solicit, or negotiate private family leave insurance. The bill also clarifies that private family leave insurance is not included in either limited lines life and health insurance or limited lines property and casualty insurance as they relate to the definitions of "limited lines life and health agent" and "limited lines property and casualty agent" respectively. This bill is identical to SB 1000.

SB 1000: Insurance agents; definitions; private family leave insurance. Passed the Senate (38-Y 0-N) Passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.

Insurance agents; definitions; private family leave insurance. Expands the definitions of "health agent" and "property and casualty insurance agent" to include that such agents may sell, solicit, or negotiate private family leave insurance. The bill also clarifies that private family leave insurance is not included in either limited lines life and health insurance or limited lines property and casualty insurance as they relate to the definitions of "limited lines life and health agent" and "limited lines property and casualty agent" respectively.

SB 1086: Living organ donors; unpaid leave, civil penalty. Passed the Senate (38-Y 0-N) and Passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.

Requires that an employer that employs 50 or more employees provide eligible employees, defined in the bill, with (i) up to 60 business days of unpaid organ donation leave in any 12-month period to serve as an organ donor and (ii) up to 30 business days of unpaid organ donation leave in any 12-month period to serve as a bone marrow donor. The bill requires the employer to restore the employee's position following the leave, to continue to provide coverage for the employee under any health benefit plan, and to pay the employee any commission earned prior to the leave. The bill prohibits the employer from taking retaliatory action against the employee for taking organ donation leave. The bill requires the Commissioner of Labor and Industry to enforce its provisions and provides for civil penalties for violations of its requirements.

Defeated Bills

HB 1988: Employment; paid sick leave; civil penalties. . Subcommittee recommends laying on the table (4-Y 3-N) (defeated)

Expands provisions of the Code that currently provide paid sick leave for home health workers to cover all employees of private employers and state and local governments. The bill provides that accrued paid sick leave can be carried over to the following year and that employees transferred to a separate division or location remain entitled to previously accrued paid sick leave. The bill provides that paid sick leave may be used for the closure of an employee's place of business by order of a public official due to a public health emergency, for an employee's need to care for a child whose school or place of care has been closed due to a public health emergency, or for an employee to care for himself or a family member who has been exposed to a communicable disease. The bill requires each employer to provide its employees a written notice of its paid sick leave policy at the commencement of employment and prohibits an employer from taking retaliatory personnel action against an employee for exercising the rights provided in the bill.

The bill authorizes the Commissioner of Labor and Industry, in the case of a knowing violation, to subject an employer to a civil penalty not to exceed $150 for the first violation, $300 for the second violation, and $500 for each successive violation. The Commissioner may institute proceedings on behalf of an employee to enforce compliance with the provisions of this bill and to collect specified amounts from the employer that shall be awarded to the employee. Alternatively, an aggrieved employee is authorized to bring a civil action against the employer in which he may recover double the amount of any unpaid sick leave and the amount of any actual damages suffered as the result of the employer's violation. The bill has a delayed effective date of January 1, 2024.

HB 2035: Paid family and medical leave program; Virginia Employment Commission required to establish. Subcommittee recommends laying on the table (4-Y 3-N) (defeated)

Paid family and medical leave program. Requires the Virginia Employment Commission to establish and administer a paid family and medical leave program with benefits beginning January 1, 2026. Under the program, benefits are paid to eligible employees for family and medical leave. Funding for the program is provided through premiums assessed to employers and employees beginning in 2025. The amount of a benefit is 80 percent of the employee's average weekly wage, not to exceed 80 percent of the state weekly wage, which amount is required to be adjusted annually to reflect changes in the statewide average weekly wage. The measure caps the duration of paid leave at 12 weeks in any application year. The bill provides self-employed individuals the option of participating in the program.

HB 2087: Health care providers and grocery store workers; employers to provide paid sick leave. Subcommittee recommends laying on the table (5-Y 3-N) (defeated)

Paid sick leave; health care providers and grocery store workers. Requires employers to provide paid sick leave to health care providers and grocery store workers. Under current law, employers are only required to provide paid sick leave to certain home health workers. The bill removes requirements that workers work on average at least 20 hours per week or 90 hours per month to be eligible for paid sick leave. The bill provides that certain health care providers may waive their right to accrue and use paid sick leave and provides an exemption for employers of certain other health care providers. The bill requires the Department of Labor and Industry to develop guidelines for retail employers that sell groceries to provide sick leave and to publish such guidelines by December 1, 2023. The provisions of the bill other than the requirement for the Department of Labor and Industry to develop guidelines have a delayed effective date of January 1, 2024.

SB 886: Health care providers and grocery store workers; employers to provide paid sick leave. Passed the Senate (22-Y 18-N). House Commerce and Energy Subcommittee failed to recommend reporting (defeated) (2-Y 4-N)

Paid sick leave; health care providers and grocery store workers. Requires employers to provide paid sick leave to health care providers and grocery store workers. Under current law, employers are only required to provide paid sick leave to certain home health workers. The bill removes requirements that workers work on average at least 20 hours per week or 90 hours per month to be eligible for paid sick leave. The bill provides that certain health care providers may waive their right to accrue and use paid sick leave and provides an exemption for employers of certain other health care providers. The bill requires the Department of Labor and Industry to develop guidelines for retail employers that sell groceries to provide sick leave and to publish such guidelines by December 1, 2023. The provisions of the bill other than the requirement for the Department of Labor and Industry to develop guidelines have a delayed effective date of January 1, 2024.

SB 1101: Paid family and medical leave program; Virginia Employment Commission required to establish. Passed the Senate (22-Y 18-N). House Commerce and Energy Subcommittee recommends laying on the table (defeated) (4-Y 2-N)

Paid family and medical leave program. Requires the Virginia Employment Commission to establish and administer a paid family and medical leave program with benefits beginning January 1, 2026. Under the program, benefits are paid to eligible employees for family and medical leave. Funding for the program is provided through premiums assessed to employers and employees beginning in 2025. The amount of a benefit is 80 percent of the employee's average weekly wage, not to exceed 80 percent of the state weekly wage, which amount is required to be adjusted annually to reflect changes in the statewide average weekly wage. The measure caps the duration of paid leave at 12 weeks in any application year. The bill provides self-employed individuals the option of participating in the program.

Sales Tax Increase - Defeated

HB 1531: Hampton Roads Interstate Highway Corridor Improvement Program and Fund; established and created. Subcommittee recommends laying on the table. (defeated) (4-Y 3-N)

Hampton Roads Interstate Highway Corridor Improvement Program and Fund; sales and use tax; Planning District 23. Creates the Hampton Roads Interstate Highway Corridor Improvement Program for the purpose of making infrastructure and safety improvements to highway corridors surrounding and paralleling interstate highways in Planning District 23. The program is funded by an additional 0.30 percent retail sales and use tax levied and imposed in Planning District 23. The bill provides that moneys generated by such tax shall be deposited in the Hampton Roads Interstate Highway Corridor Improvement Fund, created by the bill.

HB 1605: Local sales and use tax; construction or renovation of schools, Prince Edward County. Left in Committee (defeated)

Local sales and use tax; construction or renovation of schools; Prince Edward County. Adds Prince Edward County to the list of localities that are authorized to impose an additional local sales and use tax at a rate not to exceed one percent with the revenue used only for capital projects for the construction or renovation of schools.

HB 2442: Sales tax; additional local tax for schools in City of Newport News. House Finance Subcommittee recommends laying on the table (defeated) (5-Y 3-N)

Sales tax; additional local tax for schools. Adds the City of Newport News to the list of localities that, under current law, are authorized to impose an extra one percent local sales tax to provide revenue for constructing or renovating schools.

SB 1287: Additional local sales and use tax to support schools. Passed the Senate (27-Y 10-N). House Finance Subcommittee recommends laying on the table (defeated) (5-Y 2-N)

Additional local sales and use tax to support schools. Adds Albemarle County and the City of Charlottesville to the list of qualifying localities that, under current law, are authorized to impose an additional local sales and use tax at a rate not to exceed one percent, with the revenue from such tax used only for capital projects for the construction or renovation of schools.

SB 1408: Sales and use tax, local; additional tax authorized in all counties & cities to support schools. Passed the Senate (26-Y 10-N). House Finance Subcommittee recommends laying on the table (defeated) (5-Y 2-N)

Additional local sales and use tax to support schools; referendum. Authorizes all counties and cities to impose an additional local sales and use tax at a rate not to exceed one percent with the revenue used only for capital projects for the construction or renovation of schools if such levy is approved in a voter referendum. Under current law, only Charlotte, Gloucester, Halifax, Henry, Mecklenburg, Northampton, Patrick, and Pittsylvania Counties and the City of Danville are authorized to impose such a tax. This bill is a recommendation of the Commission on School Construction and Modernization.

Sales Tax Exemptions

Active Bills

HB 1563: Sales and use tax; agricultural exemptions. Passed the House (87-Y 11-N 2-A) and Passed the Senate (39-Y 0-N). Now will be communicated to Governor Youngkin.

Provides a sales and use tax exemption for property used to produce agricultural products for market in an indoor, closed, controlled-environment commercial agricultural facility. The property exempted includes (i) internal structural components required to create the necessary growing environment for plants, including watering systems, towers for growing plants, and lighting and air systems, and (ii) transparent elements of external structural components of such facilities, including windows, walls, and roofs, that allow sunlight in for the commercial production of agricultural products. The exemption shall not apply to property used in producing cannabis. The bill allows contractors working on behalf of owners of facilities exempt under these new provisions to use the exemption when purchasing materials that would otherwise qualify for the exemption. This bill is identical to SB 1240.

SB 1240: Sales and use tax; agricultural exemptions. Passed the Senate (39-Y 0-N) and passed the House (78-Y 21-N). Now will be communicated to Governor Youngkin

Sales and use tax; agricultural exemptions. Provides a sales and use tax exemption for property used to produce agricultural products for market in an indoor, closed, controlled-environment commercial agricultural facility. The property exempted includes (i) internal structural components required to create the necessary growing environment for plants, including watering systems, towers for growing plants, and lighting and air systems, and (ii) transparent elements of external structural components of such facilities, including windows, walls, and roofs, that allow sunlight in for the commercial production of agricultural products. The exemption shall not apply to property used in producing cannabis.

Defeated Bills

HB 1484: Sales Tax; exemption for food purchased for human consumption, essential personal hygiene products. Left in Committee (defeated)

Sales tax; exemption for food purchased for human consumption and essential personal hygiene products. Provides an exemption from local sales and use tax beginning July 1, 2023, for food purchased for human consumption and essential personal hygiene products. The bill also provides an allocation of state revenues to fund the distribution to localities for funding that would have been distributed to them absent the exemption created by the bill. Under current law, such products are exempt from state sales and use tax but are subject to the standard local rate of one percent.

HB 1601: Retail Sales and Use tax; agricultural exemptions, structural construction materials, definition. Committee recommends laying bill on the table (defeated) (22-Y 0-N)

Retail sales and use tax; agricultural exemptions; structural construction materials; definition. Clarifies that for the purpose of agricultural exemptions from the retail sales and use tax the definition of "structural construction materials" does not include structural construction materials and environmental control systems that will be affixed to or integrated into a commercial greenhouse structure that is 50,000 square feet or more in size, provided that such materials and equipment have been ordered to meet the specifications of the commercial greenhouse operator and are necessary for use in the greenhouse structure and growing system.

HB 1686: Sales and use tax, local; exemptions for food purchased for human consumption. Left in Committee (defeated)

Local sales and use tax; exemptions. Authorizes the governing board of a city or county to, by ordinance, exempt food purchased for human consumption and essential personal hygiene products from local sales and use tax.

HB 2196: Local sales and use tax; exemption essential personal hygiene products and infant formula. Left in committee (defeated)

Local sales and use tax; exemption for essential personal hygiene products and infant formula. Exempts essential personal hygiene products and infant formula from the local sales and use tax. Under current law, such products are exempt from state sales and use tax but are subject to the local one percent option.

HB 2416 - Retail Sales & Use Tax; exemption fee for a child restraint device. Appropriations Committee lays bill on the table (defeated) (11-Y 0-N)

Sales tax exemption; child restraint device. Creates an exemption from the retail sales and use tax for a child restraint device beginning July 1, 2023. This exemption is available only for a child restraint device purchased for personal use by an individual.

SB 850: Sales Tax; exemption for food purchased for human consumption, essential personal hygiene products. Passed by indefinitely in Finance and Appropriations Committee (defeated) (12-Y 4-N)

Sales tax; exemption for food purchased for human consumption and essential personal hygiene products. Provides an exemption from local sales and use tax beginning July 1, 2023, for food purchased for human consumption and essential personal hygiene products. The bill also provides an allocation of state revenues to fund the distribution to localities for funding that would have been distributed to them absent the exemption created by the bill. Under current law, such products are exempt from state sales and use tax but are subject to the standard local rate of one percent.

SB 985: Retail Sales and Use Tax; agricultural exemptions, structural construction materials. Incorporated into SB 1240

Virginia Retail Sales and Use Tax Act; agricultural exemptions; structural construction materials. Exempts from certain retail sales and use taxes structural construction materials that are an integral part of a commercial greenhouse structure and growing system, ordered to meet the specifications of an operator of such system, and intended to be affixed to or integrated into a commercial greenhouse structure that is at least 50,000 square feet in size. Current law specifies that structural construction materials to be affixed to real property owned or leased by a farmer, necessary for use in agricultural production for market, and sold to or purchased by a farmer or contractor are not exempt from such taxation.

SB 1008: Sales and use tax, local; exemptions for food purchased for human consumption. Passed by Indefinitely in Senate Finance and Appropriations Committee (defeated) (10-Y 5-N)

Local sales and use tax; exemptions. Authorizes the governing board of a city or county to, by ordinance, exempt food purchased for human consumption and essential personal hygiene products from local sales and use tax.

Employer Mandates

Active Bills

HB 1895: Employee protection; prohibited retaliation, prohibited nondisclosure. Passed the House (98-Y 1-N), Passed the Senate with Substitute (22-Y 18-N), House rejected substitute so went to Conference. Conference report was adopted by House (40-Y 0-N) and by Senate (94-Y 1-N). Now will be communicated to Governor Youngkin.

Provides that no employer may require an employee or prospective employee to execute or renew any provision in a nondisclosure or confidentiality agreement, including any provision regarding nondisparagement, that has the purpose or effect of concealing the details of a sexual harassment claim. Any such provision is against public policy and is void and distinct offense, punishment for which shall be consecutive to any punishment received for the act of violence. 

SB 1040: Employee's social security number; prohibited use by employer, civil penalty. Passed Senate (40-Y 0-N) and Passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.

Employer use of use of employee's social security; prohibited; civil penalty. Prohibits an employer from using an employee's social security number or any derivative thereof as such employee's identification number or including an employee's social security number or any number derived thereof on any identification card or badge, any access card or badge, or any other similar card or badge issued to such employee. The bill imposes a civil penalty of up to $100 for any knowing violation of the prohibition.

SB 1354: Worker misclassification; debarment procedures. Passed the Senate (40-Y 0-N) and Passed the House (64-Y 35-N). Now will be communicated to Governor Youngkin.

Worker misclassification; debarment procedures. Revises the procedure under which a contractor may be debarred from public contracts for misclassification of workers. The bill requires the Tax Department to notify an employer of a determination that the employer failed to properly classify an individual and allows the employer to apply for judicial or administrative review. Upon a subsequent violation, and once the opportunity for appeals has been exhausted, the Department is required to provide notice to all public bodies that they shall not award a contract to firms associated with the offending employer for specified periods. Under current law, notice to all public bodies is required after the first violation determined by the Department, and debarment is required without reference to the timing of appeals.

Defeated Bills

HB 1616: Workplace violence; policy required for certain employers, civil penalty. Subcommittee recommends laying on the table (5-Y 3-N) (defeated)

Workplace violence policy required for certain employers; civil penalty. Requires any employer of 100 or more employees to develop, implement, and maintain a workplace violence policy no later than January 1, 2024. The bill includes requirements for such a policy, such as procedures and methods for employee reporting of incidents and post-incident investigations. Employers subject to the bill are required to maintain documentation of workplace violence incidents for not less than five years. An employer that violates the provisions of the bill shall be subject to a civil penalty of not more than $1,000 per violation. The bill prohibits retaliation from an employer on the basis of reporting a workplace violence incident and provides that any employee who makes a report of workplace violence shall be immune from civil liability.

HB 1715: Workplace violence; Department of Labor and Industry to convene work group to evaluate, report. Subcommittee recommends laying on the table (defeated) (5-Y 3-N)

Department of Labor and Industry; work group to evaluate workplace violence. Directs the Department of Labor and Industry to convene a work group for the purpose of evaluating the prevalence of workplace violence in the Commonwealth, including its effects on the workplace and measures to address workplace violence. The bill requires the work group to submit a report of its findings and recommendations to the Chairmen of the House Committee on Commerce and Energy and the Senate Committee on Commerce and Labor no later than December 1, 2025.

HB 1716: Mental health resources; inclusion on Job Safety and health Protection poster. Subcommittee recommends laying on the table (defeated) (6-Y 0-N)

Safety and Health Codes Board; mental health resources. Directs the Safety and Health Codes Board within the Department of Labor and Industry to include mental health resources from the Department of Behavioral Health and Developmental Services on the Virginia Occupational Safety and Health Program's Job Safety and Health Protection poster that employers are required to keep posted in the workplace.

HB 1873: Employee protections; medicinal use of cannabis oil. Subcommittee recommends laying on the table (4-Y 3-N) (defeated)

Employee protections; medicinal use of cannabis oil. Amends the provision that prohibits an employer from discriminating against an employee for such employee's lawful use of cannabis oil pursuant to a valid written certification issued by a practitioner for the treatment or to eliminate the symptoms of the employee's diagnosed condition or disease, with certain exceptions, by specifying that such use must conform to the laws of the Commonwealth and by excluding the employees of the Commonwealth and other public bodies from such protections.

HB 2003: Employment; training and education; sexual harassment and workplace discrimination. Subcommittee recommends laying on the table(defeated). (5-Y 3-N)

Employment; training and education; sexual harassment and workplace discrimination. Requires each employer with 50 or more employees, including the Commonwealth and its agencies, institutions, and political subdivisions, to provide annual interactive training and education regarding sexual harassment and workplace discrimination by January 1, 2024. The bill includes specific training and education requirements for supervisory and nonsupervisory employees, seasonal and temporary employees who are hired to work for less than six months, and migrant and seasonal agricultural workers. The training and education required under the bill must be provided by an educator or human resources professional with knowledge and expertise in the subject matter and must include a method for employees to electronically save a certificate of completion of such training and education. The bill requires the Department of Labor and Industry to make online courses for the required training available on its website beginning January 1, 2024.

HB 2023: Wage or salary history inquiries prohibited; civil penalty. Subcommittee recommends laying on the table (defeated) (5-Y 1-N)

Wage or salary history inquiries prohibited; civil penalty. Prohibits a prospective employer from (i) seeking the wage or salary history of a prospective employee; (ii) relying on the wage or salary history of a prospective employee in determining the wages or salary the prospective employee is to be paid upon hire; (iii) relying on the wage or salary history of a prospective employee in considering the prospective employee for employment; (iv) refusing to interview, hire, employ, or promote a prospective employee or otherwise retaliating against a prospective employee for not providing wage or salary history; (v) failing or refusing to provide a prospective employee the wage or salary range for the position for which the prospective employee is applying prior to discussing compensation and at any time upon the prospective employee's request; and (vi) failing to set a wage or salary range in good faith. The bill establishes a cause of action for an aggrieved prospective employee or employee and provides that an employer that violates such prohibitions is liable to the aggrieved prospective employee or employee for statutory damages between $1,000 and $10,000 or actual damages, whichever is greater; reasonable attorney fees and costs; and any other legal and equitable relief as may be appropriate. The bill also provides for civil penalties for violations not to exceed $1,000 for a first violation, $2,000 for a second violation, and $4,000 for a third or subsequent violation.

HB 2116: Employment; restrictions on use of credit report for employment purposes. Subcommittee recommends laying on the table (5-Y 3-N) (defeated)

Employment; restrictions on use of credit report for employment purposes. Prohibits employers from (i) using a credit report in connection with or as a criterion for employment purposes, (ii) requesting or procuring a credit report for employment purposes, or (iii) requiring an employee or prospective employee to answer a question about the contents of a credit report or the information contained therein. Notwithstanding this prohibition, the bill lists conditions under which an employer or person acting on behalf of an employer may obtain, use, or seek a credit report from an employee or prospective employee. The bill prohibits any waiver of its requirements and prohibits retaliation and other discrimination or adverse action taken by an employer against an employee for alleging a violation of its requirements. The bill provides that the State Corporation Commission shall enforce the requirements of the bill by imposing civil penalties, notifying employers, and conducting informal conferences to assess violations.

HB 2148: Employment discrimination; employee notification of federal and state statute of limitations. Subcommittee recommends laying on the table (defeated) (5-Y 3-N)

Employment discrimination; employee notification of federal and state statute of limitations. Requires an employer who receives an employee complaint alleging sexual assault, harassment, or any other form of discrimination for which the employee may seek enforcement by the U.S. Equal Employment Opportunity Commission (EEOC) or the Office of the Attorney General to notify such employee that a charge may be filed with the EEOC or the Office of the Attorney General within 300 days after the alleged unlawful discriminatory practice occurred. The bill also requires an employer to provide this information as part of any new employee training provided at the commencement of employment or anti-discrimination training provided to an employee.

HB 2167: Workplace violence; violence in certain public places, penalty. Passed the House (52-Y 47-N) Passed by Indefinitely in Senate Judiciary Committee (defeated) (9-Y 6-N)

Workplace violence; violence in certain public places; penalty. Makes it a Class 3 felony for any person to commit an act of violence at (i) such person's place of employment or former place of employment, or a franchise thereof, whether on or off duty and whether during or outside of normal business hours; (ii) a place of worship; (iii) a courthouse; or (iv) a hospital.

The bill provides that such offense is a separate and distinct offense, punishment for which shall be consecutive to any punishment received for the act of violence.

HB 2217: Interagency task force on Workforce Innovation and Opportunity Act. Subcommittee recommends laying on the table (defeated) (5-Y 3-N)

Interagency task force on Workforce Innovation and Opportunity Act. Directs the Secretaries of Education and Labor to convene a task force of relevant state agencies who house Title I, II, and III programs and the state's Registered Apprenticeship program, as well as representatives from the Virginia Community College System, the Virginia Economic Development Partnership Authority, the Virginia Board of Workforce Development, the Virginia Association of Workforce Directors, and organized labor, to consider possible alternatives for the alignment of Titles I, II, and III funded by the Workforce Innovation and Opportunity Act. The task force shall include in its review the challenges, opportunities, and costs for each considered reorganization model. The task force shall also consult with the Virginia representative from the U.S. Department of Labor and consider the December 2021 Workforce System Evaluation report submitted to the Governor and the Virginia Board of Workforce Development. The Secretaries of Education and Labor shall submit their executive summary and report by June 30, 2024.

SB 1103: Workplace violence; violence in certain public places, penalty. Passed by indefinitely in Judiciary Committee (9-Y 6-N)

Workplace violence; violence in certain public places; penalty. Makes it a Class 3 felony for any person to commit an act of violence at (i) such person's place of employment or former place of employment, or a franchise thereof, whether on or off duty and whether during or outside of normal business hours; (ii) a place of worship; (iii) a courthouse; or (iv) a hospital. The bill provides that such offense is a separate and distinct offense, punishment for which shall be consecutive to any punishment received for the act of violence.

SB 1136: Wage or salary history inquiries prohibited; civil penalty. Passed the Senate (20-Y 18-N). House Commerce and Energy Subcommittee recommends laying on the table (defeated) (4-Y 2-N)

Wage or salary history inquiries prohibited; civil penalty. Prohibits a prospective employer from (i) seeking the wage or salary history of a prospective employee; (ii) relying on the wage or salary history of a prospective employee in determining the wages or salary the prospective employee is to be paid upon hire; (iii) relying on the wage or salary history of a prospective employee in considering the prospective employee for employment; (iv) refusing to interview, hire, employ, or promote a prospective employee or otherwise retaliating against a prospective employee for not providing wage or salary history; (v) failing or refusing to provide a prospective employee the wage or salary range for the position for which the prospective employee is applying prior to discussing compensation and at any time upon the prospective employee's request; and (vi) failing to set a wage or salary range in good faith. The bill establishes a cause of action for an aggrieved prospective employee or employee and provides that an employer that violates such prohibitions is liable to the aggrieved prospective employee or employee for statutory damages between $1,000 and $10,000 or actual damages, whichever is greater; reasonable attorney fees and costs; and any other legal and equitable relief as may be appropriate. The bill also provides for civil penalties for violations not to exceed $1,000 for a first violation, $2,000 for a second violation, and $4,000 for a third or subsequent violation.

Consumer Protection Act

Active Bills

HB 1517: Virginia Consumer Protection Act; automatic renewal or continuous service offers. Passed the House (100-Y 0-N), passed the Senate with Amendments (40-Y 0-N), House agreed to amendments (97-Y 0-N). Now will be communicated to Governor Youngkin.

Requires suppliers of automatic renewals or continuous service offers that include a free trial that lasts more than 30 days to, within 30 days of the end of any such free trial, notify the consumer of his option to cancel the free trial before the end of the trial period to avoid an obligation to pay for the goods or services. The bill provides that failure to notify a consumer of such option is a violation of the Virginia Consumer Protection Act. The bill also makes it a violation of the Virginia Consumer Protection Act for a supplier to fail to disclose the total cost of a good or continuous service to a consumer, including any mandatory fees or charges, prior to entering into an agreement for the sale of any such good or provision of any such service.

SB 1540 - Consumer protection; automatic renewal or continuous service offer to consumer, exemptions. Passed the Senate (39-Y 0-N) and Passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.

Exempts extended service contract providers, and their affiliates, regulated by the Department of Agriculture and Consumer Services and insurers or entities regulated by Title 38.2 (Insurance) from provisions of law governing automatic renewal and continuous service offers to consumers. The bill also amends the definition of "automatic renewal" to mean a plan or arrangement in which a paid subscription or purchasing agreement is automatically renewed at the end of a definite term for a subsequent term of more than one month. Current law does not specify the length of the subsequent renewal term.

Defeated Bills

HB 1855: Consumer Protection Act; PFAS chemicals in children's products. Subcommittee recommends laying on the table (5-Y 3-N) (defeated)

Prohibits the sale, offering for sale, or manufacturing for sale of a children's product that the supplier knows or has reason to know contains perfluoroalkyl and polyfluoroalkyl substances (PFAS). PFAS is defined in the bill as substances that include any member of the class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom. The bill exempts children's products that are used, secondhand, or "seconds" from the prohibition.

Individual and Corporate Income Tax

Active Bills

HB 1369: Income tax, state; installment agreements for payment of taxes. Passed the House (100-Y 0-N) and passed the Senate (39-Y 0-N). Now will be communicated to Governor Youngkin.

Requires the Tax Commissioner to offer to enter into an installment agreement with any individual taxpayer under which the taxpayer may satisfy his entire tax liability over a payment term of up to five years. The bill maintains the current law for corporate taxpayers whereby the Tax Commissioner may enter into a written agreement with any taxpayer under which such taxpayer is allowed to satisfy his entire tax liability in installment payments if the Tax Commissioner determines that such agreement will facilitate collection. The bill also removes the power under which the Tax Commissioner may alter, modify, or terminate an installment agreement if it is determined that the financial condition of the taxpayer has significantly changed or if the taxpayer fails to provide a financial condition update upon request. The bill directs the Department of Taxation to convene a working group to study current federal and state policies concerning installment agreements and to make recommendations by November 15, 2023, regarding how the Commonwealth's policies may better align with the installment agreement policies adopted by the Internal Revenue Service.

HB 1405: Income tax, corporate; returns, affiliated corporations. Passed the House (100-Y 0-N) and passed the Senate (39-Y 0-N). Now will be communicated to Governor Youngkin.

Removes the requirement that, in order for a group of affiliated corporations to be granted permission from the Tax Commissioner to change their filing status for corporate income tax purposes, for the previous tax year there would have been no decrease in tax liability computed under the proposed election as compared to the affiliated group's former filing method. The bill retains the current requirement that the affiliated group agree to file returns under both the new filing method and the former method and pay the greater of the two amounts for the taxable year in which the new election is effective and for the immediately succeeding taxable year. This bill is identical to SB 796.

HB 1456: Income tax, state; pass-through entities. Passed the House (98-Y 0-N) and passed the Senate (39-Y 0-N). Now will be communicated to Governor Youngkin.

Makes changes to the elective entity level tax on pass-through entities effective beginning with taxable year 2021. The bill would impose the tax only on the share of income, gain, loss, or deduction attributable to eligible owners as opposed to imposing the tax on the entire entity. The bill defines "eligible owner" as an owner of a pass-through entity that is a natural person, estate, or trust. The bill also removes the requirement that to qualify for the tax election a pass-through entity must be 100 percent owned by natural persons or persons eligible to be shareholders in an S corporation. This bill is identical to SB 1476.

HB 1978: Taxable income apportionment; retail companies. Passed the House (99-Y 0-N). and passed the Senate (40-Y 0-N). Now will be communicated to Governor Youngkin.

Taxable income apportionment; retail companies. Provides that, beginning with taxable year 2023, affiliated corporations filing on a consolidated basis may elect to apportion the taxable income of all members of the affiliated group using sales factor alone even if one or more members of the affiliated group would be required to use different apportionment factors if filing separate returns. The election is valid only in taxable years for which 80 percent or more of the affiliated group's sales is derived from retail company activities.

SB 796: Income tax, corporate; returns, affiliated corporations. Passed the Senate (38-Y 0-N) and Passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.

Removes the requirement that, in order for a group of affiliated corporations to be granted permission from the Tax Commissioner to change their filing status for corporate income tax purposes, for the previous tax year there would have been no decrease in tax liability computed under the proposed election as compared to the affiliated group's former filing method. The bill retains the current requirement that the affiliated group agree to file returns under both the new filing method and the former method and pay the greater of the two amounts for the taxable year in which the new election is effective and for the immediately succeeding taxable year. This bill is identical to HB 1405.

SB 1346: Taxable income apportionment; retail companies. Passed the Senate (36-Y 4-N) and Passed the House (98-Y 0-N). Now will be communicated to Governor Youngkin.

Taxable income apportionment; retail companies. Provides that, beginning with taxable year 2023, affiliated corporations filing on a consolidated basis may elect to apportion the taxable income of all members of the affiliated group using sales factor alone even if one or more members of the affiliated group would be required to use different apportionment factors if filing separate returns. The election is valid only in taxable years for which 80 percent or more of the affiliated group's sales is derived from retail company activities.

SB 1476: Income tax, state; pass-through entities. Passed the Senate (40-Y 0-N) and Passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.

Makes changes to the elective entity level tax on pass-through entities effective beginning with taxable year 2021. The bill would impose the tax only on the share of income, gain, loss, or deduction attributable to eligible owners as opposed to imposing the tax on the entire entity. The bill defines "eligible owner" as an owner of a pass-through entity that is a natural person, estate, or trust. The bill also removes the requirement that to qualify for the tax election a pass-through entity must be 100 percent owned by natural persons or persons eligible to be shareholders in an S corporation.

Defeated Bills

HB 1367: Income tax, state; tax credit for employer contributions to Virginia College Savings Plan accounts. Laid on the table in Appropriations Committee (defeated) (20-Y 0-N)

Income tax credit; employer contributions to Virginia College Savings Plan accounts. Provides a nonrefundable income tax credit for taxable years 2023 through 2027 for 35 percent of expenses incurred by a business during the taxable year for contributions into a Virginia College Savings Plan account owned by an employee of the business. If the employee receiving the contribution is a qualified employee, as defined in the bill, the bill specifies that the credit shall not exceed $500 annually for each such employee. If the employee receiving the contribution is a qualified employee who is not highly compensated, as defined in the bill, the bill specifies that the credit shall not exceed $1,000 annually for each such employee. The bill provides that the total amount of tax credits available for a calendar year shall not exceed $5 million and that any unused tax credit may be carried over for three years.

HB 2138: Income tax; business interest; qualified business income deduction; corporate rate reduction. Passed the House (52-Y 48-N) and Passed by indefinitely (defeated) by Senate Finance and Appropriations Committee (11-Y 5-N)

Increases from 30 percent to 50 percent the Virginia individual and corporate income tax deduction for business interest disallowed as a deduction under § 163(j) of the Internal Revenue Code beginning in taxable year 2024. The bill allows an individual income tax deduction in an amount equal to 50 percent of certain federal qualified business income deductions, excluding qualified real estate investment trust dividends. The bill also reduces from six percent to five percent the corporate income tax rate beginning in taxable year 2023.

HB 2176: Individual income tax; distribution of revenues; local school construction. Subcommittee recommends laying on the table (5-Y 3-N)

Individual income tax; distribution of revenues; local school construction. Requires distribution of five percent of the individual income tax revenues collected from residents of a locality to be distributed to that locality. The bill requires such funds to be used for school construction or renovation purposes and to be repaid to the state if used for any other purpose. The bill provides that a locality shall be required to maintain its level of expenditure for public school purposes as a condition of receiving the income tax revenues; however, a locality may reduce its level of expenditure to account for a loss of revenues resulting from a reduction in machinery and tools taxes.

HB 2319: Income tax, state; Lowers rates and deductions. Passed the House (52-Y 48-N) and Passed by indefinitely (defeated) by Senate Finance and Appropriations Committee (11-Y 5-N)

Income tax; rates and deductions. Lowers the top income tax rate from 5.75 percent to 5.5 percent for taxable years beginning on and after January 1, 2024. The bill also raises the standard deduction to $9,000 for single individuals and $18,000 for married persons for taxable years beginning on and after January 1, 2024, but before January 1, 2026.

SB 851: Income tax, state; increases standard deduction. Incorporated into SB 1451 and then defeated

Income tax; standard deduction. Increases the standard deduction, starting with taxable year 2023, from $8,000 to $12,500 for single filers and from $16,000 to $25,000 for married filers (one-half of such amount in the case of a married individual filing a separate return). The increase would remain in effect until taxable year 2026, when the standard deduction is scheduled to be reduced to $3,000 for single filers and to $6,000 for married filers.

SB 950: Income tax, state and corporate; Paycheck Protection Program loans. Passed by Indefinitely in Senate Finance and Appropriations (Defeated) (9-Y 4-N)

Taxable income; Paycheck Protection Program loans. Allows an individual and corporate income tax deduction or subtraction, as applicable, for any amount of business expenses funded by forgiven Paycheck Protection Program (PPP) loan proceeds that are paid or incurred prior to taxable year 2023. Under current law, the allowable amount that may be deducted or subtracted is limited to $100,000 of business expenses funded by forgiven PPP loan proceeds paid or incurred prior to taxable year 2021.

SB 1355: Income tax; business interest; qualified business income deduction; corporate rate reduction. Passed by indefinitely in Finance and Appropriations (defeated) (11-Y 4-N)

Income tax; business interest; qualified business income deduction; corporate rate reduction. Increases from 30 percent to 50 percent the Virginia individual and corporate income tax deduction for business interest disallowed as a deduction under § 163(j) of the Internal Revenue Code beginning in taxable year 2024. The bill allows an individual income tax deduction in an amount equal to 50 percent of certain federal qualified business income deductions, excluding qualified real estate investment trust dividends. The bill also reduces from six percent to five percent the corporate income tax rate beginning in taxable year 2023.

SB 1423: Income tax; rates and deductions for businesses. Incorporated into SB 1355 and then defeated

Income tax; rates and deductions for businesses. Provides an individual income tax deduction for 50 percent of the amount of qualified business income deductible for federal income tax purposes, but excluding the amount of qualified REIT dividends deductible under the same provision of the Internal Revenue Code. The bill also reduces the corporate income tax rate from six percent to five percent for taxable years beginning on or after January 1, 2023.

SB 1451: Income tax; rates and deductions. Passed by indefinitely in Finance and Appropriations (defeated) (10-Y 5-N)

Income tax; rates and deductions. Lowers the top income tax rate from 5.75 percent to 5.5 percent for taxable years beginning on and after January 1, 2024. The bill also raises the standard deduction to $9,000 for single individuals and $18,000 for married persons for taxable years beginning on and after January 1, 2024, but before January 1, 2026.

Small Business Employer Tax Credits - Defeated

HB 1479: Employer-provided childcare; creates a tax credit for taxable years 2023 through 2027. Left in committee

Employer-provided childcare tax credit. Creates a tax credit for taxable years 2023 through 2027 for qualified childcare expenses, as defined by the bill, incurred by a small business, as defined by the bill, in the amount of 20 percent of such business's aggregate monthly payments made for such expenses in the preceding taxable year. The amount of the credit allowed to a taxpayer shall not exceed $300,000 per taxable year.

Small Business - Defeated

HB 1491: Small business; redefines for the purposes of certain programs. Subcommittee recommends laying on the table (5-Y 3-N)

Department of Small Business and Supplier Diversity; definitions; small business. Redefines "small business" for the purposes of programs for the Department of Small Business and Supplier Diversity and the Virginia Public Procurement Act to mean a business that together with its affiliates has both 250 or fewer employees and average annual gross receipts, less the cost of goods sold by the business, of $10 million or less averaged over the previous three years. Currently for these programs, a business qualifies as a small business if, together with its affiliates, it has either 250 or fewer employees or average annual gross receipts of $10 million or less averaged over the previous three years.

HB 1829: Small, women-owned, or minority-owned businesses certification, grant and procurement awards. Stricken from Docket (defeated)

Grant and procurement awards; certification for small, women-owned, or minority-owned businesses. Requires that for any grant or contract issued or entered into by the Governor, a state agency, or a locality, such entity shall inquire whether the grant recipient, bidder, offeror, or contractor is a small, women-owned, or minority-owned business and whether it is certified by the Department of Small Business and Supplier Diversity (DSBSD) for procurement enhancement. If such business is eligible but not certified, the bill directs DSBSD to provide it with information on the certification process and encourage it to apply for certification.

Tax Conformity

HB 1595: Internal Revenue Code; conformity of the Commonwealth's taxation system. (Emergency Clause) Passed the House (96-Y 0-N) and Passed the Senate (39-Y 0-N). Now will be communicated to Governor Youngkin – becomes law as soon as signed because of Emergency clause.

Advances Virginia's date of conformity with the Internal Revenue Code from December 31, 2021, to December 31, 2022. The bill enacts Chapters 6 and 18 of the Acts of Assembly of 2022, Special Session I. The bill contains an emergency clause. This bill is identical to SB 882.

HB 2193: Income tax; rolling conformity; report. Passed the House (99-Y 0-N), passed the Senate with substitute (40-Y 0-N), House rejected substitute so went to conference with SB1405. House agreed to Conference report (96-Y 0-N) and Senate agrees (39-Y 0-N). Now will be communicated to Governor Youngkin.

Provides that Virginia shall generally conform to federal tax laws on a rolling basis, meaning that Virginia tax laws incorporate changes to federal income tax law as soon as Congress enacts them on or after January 1, 2023. However, the bill provides that Virginia shall not conform to any changes in a single act of Congress with an impact of more than $10 million on revenues in the year in which the amendment was enacted or any of the next four years.

SB 882: Internal Revenue Code; conformity of the Commonwealth's taxation system. (Emergency Clause) Passed the Senate (40-Y 0-N) and Passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin – becomes law as soon as signed because of Emergency clause.

Advances Virginia's date of conformity with the Internal Revenue Code from December 31, 2021, to December 31, 2022. The bill enacts Chapters 6 and 18 of the Acts of Assembly of 2022, Special Session I. The bill contains an emergency clause. This bill is identical to HB 1595.

SB 1405: Income tax; rolling conformity; report. Passed the Senate (39-Y 0-N), passed the House with substitute (99-Y 0-N), Senate rejected substitute so went to conference with HB1595. Senate agreed to conference report (40-Y 0-N) and House agreed (95-Y 0-N). Now will be communicated to Governor Youngkin.

Provides that Virginia shall generally conform to federal tax laws on a rolling basis, meaning that Virginia tax laws incorporate changes to federal income tax law as soon as Congress enacts them on or after January 1, 2023. However, the bill provides that Virginia shall not conform to (i) any changes in a single act of Congress with an impact of more than $25 million on revenues in the year in which the amendment was enacted or any of the next four years and (ii) all amendments in a year with a cumulative projected impact of more than $75 million in the year in which the amendments were enacted or any of the next four years. For any amendment enacted on or after January 1, 2024, the $25 million per act impact threshold shall be adjusted annually by the change in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the previous year.

Felony Larceny Threshold - Defeated

SB 1296: Grand larceny and certain property crimes; penalties. Incorporated into SB1396

Grand larceny and certain property crimes; penalties. Reduces from $1,000 to $500 the threshold amount of money taken or value of goods or chattel taken at which the crime rises from petit larceny to grand larceny. The bill reduces the threshold by the same amount for the classification of certain property crimes. The bill also provides that any person convicted of a second larceny offense shall be confined in jail not less than 30 days nor more than 12 months and that for a third or any subsequent offense, he is guilty of a Class 6 felony.

ABC

Active Bills

• HB 1730: Alcoholic beverage control; grounds for suspension or revocation of license, exception. Passed the House (99-Y 0-N), Passed the Senate with Substitute (40-Y 0-N), House agreed to Substitute (97-Y 0-N). Now will be communicated to Governor Youngkin.
• HB 1979: Alcoholic beverage control; displays of wine and beer. Passed the House (99-Y 1-N), passed Senate with Amendments (40-Y 0-N), House agreed to amendments (98-Y 0-N). Now will be communicated to Governor Youngkin
• HB 2258: Alcoholic beverage control; beer distribution. Passed the House (99-Y 0-N), Passed the Senate with Amendments (40-Y 0-N), House rejected amendments and went to Conference. Conference report agree to by House (97-Y 2-N) and by Senate (40-Y 0-N). Now will be communicated to Governor Youngkin
• HB 2336: Alcoholic beverage control; marketplace license fees. Passed the House (94-Y 6-N) and Passed the Senate (38-Y 2-N). Now will be communicated to Governor Youngkin.
• SB 809: Alcoholic beverage control; displays of wine and beer. Passed the Senate (37-Y 1-N) and Passed the House (99-Y 0-N)

Defeated Bills

• HB 1866: Alcoholic beverage control; suspension or revocation of certain retail licenses, reinstatement. Passed the House (52-Y 48-N) – Went to conference and conference report was not agreed to (defeated)
• HB 1971: Alcoholic beverage control; slotting fees. Left in Committee (defeated)
• HB 2001: Alcoholic beverage control; disclosure of alcohol by volume content by certain retail licensees Left in Committee (defeated)
• SB 885: Alternative beer distribution program; Va. Alcoholic Beverage Control Authority to study. Passed the Senate (39-Y 0-N) and Stricken from the docket in House General Laws Committee (defeated) (21-Y 0-N)
• SB 1371: Alcoholic beverage control; brewery licensees; tied house exception. Stricken at the request of the patron (defeated)
• SB 1387: Alcoholic beverage control; slotting fees. Stricken at the request of the Patron (defeated)

DRAM Shop - Defeated

• SB 1113: Liability for sale of alcohol to an impaired customer; injury to another person. Passed by indefinitely in Judiciary (12-Y 3-N) (defeated)
• SB 1226: Alcohol; liability for sale to an underage person. Incorporated by Judiciary (SB1113-Hanger) (13-Y 0-N) and then Passed by Indefinitely (defeated)

Plastic Bag Ban - Defeated

• SB 933: Single-use plastic carrier bags; local prohibition. Failed to report in Senate Local Government Committee (defeated) (6-Y 9-N)

Single Use Plastic and Polystyrene Ban - Defeated

• SB 1012: Single-use plastic and expanded polystyrene products; state and local prohibition. Failed to report in Agriculture, Conservation and Natural Resources (4-Y 10-N 1-A) (defeated)

Workers’ Compensation – Defeated

• HB 1763: Workers' compensation; injuries caused by repetitive and sustained physical stressors. Subcommittee recommends laying on the table (6-Y 4-N) (defeated)

• HB 1966: Workers' compensation; failure to timely pay compensation. Stricken from Docket (defeated)

• HB 2002: Workers' compensation; premium discounts for employers providing high-quality work-based learning. Stricken from Docket (defeated)

• SB 1037: Workers' compensation; notice to employees. Passed the Senate (25-Y 13-N) and failed to report in House Commerce and Energy Subcommittee (defeated) (2-Y 5-N)

Unemployment Compensation - Defeated

• HB 1639: Unemployment compensation; reduces time to file appeal. Tabled in Commerce and Energy (22-Y 0-N) (defeated)
• HB 2115: Unemployment compensation; continuation of benefits; repayment of overpayments. Subcommittee failed to recommend reporting (3-Y 4-N) (defeated)
• SB 1435: Unemployment compensation; time to file appeal. Passed by indefinitely in Senate Commerce and Labor Committee (defeated)(15-Y 0-N)

Miscellaneous Tax

Active Bills

• HB 1368: Advisory Tax Administration Commission; established, report. Passed the House (99-Y 0-N) and Passed the Senate (40-Y 0-N). Now will be communicated to Governor Youngkin.
• HB 1927: Filing of tax returns or payment of taxes by mail. Passed the House (98-Y 0-N) and Passed the Senate with Amendment (39-Y 0-N) Now will be communicated to Governor Youngkin.

Defeated Bills

• HB 1621: State taxes; notice before penalty and interest. Left in Committee (defeated)
• HB 1863: Taxation in the Commonwealth; numerous changes to tax structure, report. Left in Committee (defeated)

Cannabis

Active Bills

• HB 2294: Marijuana; tetrahydrocannabinol; hemp products; civil penalty. Passed the House (91-Y 7-N), passed the Senate with Substitute (23-Y 17-N), House rejected substitute (31-Y 66-N 1-A). Went to conference with SB 903. House agreed to Conference report (85-Y 9-N) and Senate agreed (23-Y 17-N). Now will be communicated to Governor Youngkin.
• SB 903: Tetrahydrocannabinol; industrial hemp, regulated hemp products. Passed the Senate (25-Y 15-N), passed the House with Substitute (81-Y 15-N). Senate rejected substitute so went to conference with HB2294. Conference report agreed to (22-Y 18-N) and House agreed (78-Y 14-N). Now will be communicated to Governor Youngkin.
• SB 1233: Marijuana; advertising restrictions; penalties. Passed Senate (38-Y 0-N), Passed the House with Substitute (96-Y 0-N). Senate rejected substitute so went to conference. Conference report agreed to by Senate (40-Y) and by House (93-Y 0-N). Now will be communicated to Governor Youngkin

Defeated Bills

• HB 1464: Cannabis control; establishes framework for creation of retail market, transitional sale, penalties. Subcommittee recommends laying on the table (defeated) (5-Y 3-N)
• HB 1547: Cannabis; deconforms from federal law. licensees. Left in Committee (defeated)
• HB 1750: Cannabis control; establisher framework for creation of retail marijuana market. Subcommittee recommends laying on the table (defeated) (8-Y 0-N)
• HB 1922: Delta-8 tetrahydrocannabinol; distribution; penalty. Failed to report in Courts of Justice Committee (defeated) (10-Y 10-N)
• HB 1973: Tetrahydrocannabinol; industrial hemp, regulated hemp products. Left on the House Floor (defeated)
• SB 1393: Hemp products; license and label requirements. Passed by Indefinitely in Finance and Appropriations (defeated) (15-Y 1-N)

Transient Occupancy Tax

• HB 1442: Transient occupancy tax; administration. Passed the House (100-Y 0-N) and Passed the Senate with Amendments (39-Y 0-N). Now will be communicated to Governor Younkin.

COVID-19 - Defeated

• SB 792: COVID-19 immunization; prohibition on requirement, discrimination prohibited, civil penalty. Passed by indefinitely in Education and Health (defeated) (8-Y 5-N)
• SB 1315: Localities, public and private schools, institutions of higher education, and employers; face cover. Passed by indefinitely in Education and Health (defeated) (15-Y 0-N)

Tobacco

Active Bills

• HB 1404: Cigarette; definition, delivery sale requirements. Passed the House (98-Y 0-N) and passed the Senate (40-Y 0-N). Now will be communicated to Governor Youngkin.
• HB 2296: Tobacco products tax; liquid nicotine and nicotine vapor products, licensing requirements. Passed the House (95-Y 4-N) and Passed Senate with amendments (40-Y 0-N). Now will be communicated to Governor Youngkin.
• SB 1350: Tobacco products tax; liquid nicotine and nicotine vapor products, licensing requirements. Passed the Senate with substitute (40-Y 0-N) and Passed the House with amendments (90-Y 6-N). Now will be communicated to Governor Youngkin.

Defeated Bills

• HB 1417: Cigars; modifies the statutory tax rate imposed on selling or distributing, etc. Passed the House (83-Y 17-N). Left in Senate Finance and Appropriations Committee (defeated)
• SB 992: Cigars; modifies the statutory tax rate imposed on selling or distributing. Passed by Indefinitely in Finance and Appropriations (8-Y 3-N 1-A)

Association Health Plans

• HB 2201: Association health plans; prohibiting discrimination based on health status; base premium rates. Passed the House (99-Y 0-N) and Passed the Senate with Amendments (40-Y 0-N). Now will be communicated to Governor Youngkin.
• SB 1171: Association health plans; premium rates based on employer member's risk profile. Passed the Senate (40-Y 0-N) and passed House with amendments (99-Y 0-N). Now will be communicated to Governor Youngkin.

Miscellaneous

Active Bills

• HB 2179: Commercial delivery services; authorized use for notice to an employer for violation of safety prov. Passed the House (100-Y 0-N) and passed the Senate (40-Y 0-N). Now will be communicated to Governor Youngkin.
• HB 2180: Professional and Occupational Regulation, Department of; universal license recognition. Passed the House (100-Y 0-N) and passed the Senate (40-Y 0-N). Now will be communicated to Governor Youngkin.
• SB 1126: Commercial delivery services; authorized use for notice to an employer for violation of safety prov. Passed the Senate (38-Y 0-N) and passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.
• SB 1213: Professional and Occupational Regulation, Department of; universal license recognition. Passed the Senate (40-Y 0-N) and passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.
• SB 1363: Voluntary apprenticeships; persons 16 years of age or older; cosmetology salon. Passed the Senate (40-Y 0-N) and Passed the House (99-Y 0-N). Now will be communicated to Governor Youngkin.

Defeated Bills

• HB 1802: Food product sales; waive government inspection. Subcommittee recommends laying on the table (defeated) (9-Y 1-N)
• HB 1813: Fireworks; sale, use, and taxation. Subcommittee recommends laying on the table (defeated) (6-Y 1-N)
• HB 1874: Supplemental Nutrition Assistance Program; applying to participate or renewal. Failed to report on House Floor (defeated) (45-Y 54-N)
• HB 2347: Department of Planning and Budget; Regulatory Budget Program; report. Passed the House (53-Y 47-N) and Passed by Indefinitely (defeated) in Senate General Laws Committee (11-Y 4-N)
• SB 1312: Requirement for electric vehicle charging stations for certain developments. Passed the Senate (22-Y 18-N) and laid on the table (defeated) in House Counties, Cities and Towns Subcommittee (5-Y 4-N)

The past week of the legislative session has been filled with a sense of urgency as we head into the last scheduled week of session. The House and Senate have been reviewing legislation from the opposite chamber since Wednesday, February 8th. At this juncture, the House of Delegates has passed 142 Senate bills, and the Senate has passed 220 House bills. Next week’s focus will be largely around the budget and identifying items between both chambers that are in need of negotiation. 

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Last week was filled with action as the “Crossover” deadline was this past Tuesday, February 7. The House and Senate chambers went late into Monday and Tuesday evening passing legislation within their respective bodies. Both are now reviewing bills from the opposite chamber. As of today, the Senate has passed 516 bills and the House of Delegates has passed 599 bills, almost doubling their progress since one week ago. 

The House Appropriations and the Senate Finance and Appropriations committees convened Sunday, February 5 to receive high level subcommittee reports and recommendations for investing state funds. There are vast differences between the House and Senate proposals. One of major difference, of note, is that the House budget proposal includes the Governor’s $1billion in tax cuts, and the Senate’s budget proposal does not include any of the proposed tax cuts. At the end of last week, both bodies adopted their respective proposals, after much discussion on the Floor. Now the budget bills will go through a conference process in which both chambers negotiate to create one final version of the budget prior to the last day of the legislative session on February 25.

With just two more weeks of session to go, your VRF team will keep you informed as bills progress through the legislative process. As always, should you have any questions about legislation or actions of the General Assembly, please do not hesitate to reach out.

Below you will find a list of bills that have seen action since Crossover. To view a complete list of bills that impact the retail industry click here.

Jump to a section: 

Individual and Corporate Income Tax

Tax Conformity

Transient Occupancy Tax

Consumer Protection Act

Sales Tax Exemptions

ABC

Individual and Corporate Income Tax

HB 1369: Income tax, state; installment agreements for payment of taxes. Passed the House (100-Y 0-N) and Passed the Senate (39-Y 0-N)

Installment agreements for payment of taxes. Requires the Tax Commissioner to offer to enter into an installment agreement with any individual taxpayer under which the taxpayer may satisfy his entire tax liability over a payment term of up to five years. The bill maintains the current law for corporate taxpayers whereby the Tax Commissioner may enter into a written agreement with any taxpayer under which such taxpayer is allowed to satisfy his entire tax liability in installment payments if the Tax Commissioner determines that such agreement will facilitate collection, but limits such agreement to no more than five years. The bill also removes the power under which the Tax Commissioner may alter, modify, or terminate an installment agreement if it is determined that the financial condition of the taxpayer has significantly changed or if the taxpayer fails to provide a financial condition update upon request.

HB 1405: Income tax, corporate; returns, affiliated corporations. Passed the House (100-Y 0-N) and Passed the Senate (39-Y 0-N)

Corporate income tax; filing method for affiliated corporations. Removes the requirement that, in order for a group of affiliated corporations to be granted permission from the Tax Commissioner to change their filing status for corporate income tax purposes, for the previous tax year there would have been no decrease in tax liability computed under the proposed election as compared to the affiliated group's former filing method. The bill retains the current requirement that the affiliated group agree to file returns under both the new filing method and the former method and pay the greater of the two amounts for the taxable year in which the new election is effective and for the immediately succeeding taxable year.

HB 1456: Income tax, state; pass-through entities. Passed the House (98-Y 0-N) and Passed the Senate (39-Y 0-N)

Income tax; pass-through entities. Makes changes to the elective entity level tax on pass-through entities. The bill would impose the tax only on the share of income, gain, loss, or deduction attributable to eligible owners, as opposed to imposing the tax on the entire entity. "Eligible owner" is defined in the bill as an owner of a pass-through entity that is a natural person or a person eligible to be a shareholder in an S corporation. The bill also strikes the requirement that to qualify for the tax a pass-through entity must be 100 percent owned by natural persons or persons eligible to be shareholders in an S corporation.

SB 1476: Income tax, state; pass-through entities. Passed the Senate (40-Y 0-N) and reported from House Finance (21-Y 0-N)

Income tax; pass-through entities. Makes changes to the elective entity level tax on pass-through entities effective beginning with taxable year 2021. The bill would impose the tax only on the share of income, gain, loss, or deduction attributable to eligible owners as opposed to imposing the tax on the entire entity. The bill defines "eligible owner" as an owner of a pass-through entity that is a natural person, estate, or trust. The bill also removes the requirement that to qualify for the tax election a pass-through entity must be 100 percent owned by natural persons or persons eligible to be shareholders in an S corporation.

Tax Conformity

HB 1595: Internal Revenue Code; conformity of the Commonwealth's taxation system. (Emergency Clause) Passed the House (96-Y 0-N) and Passed the Senate (39-Y 0-N)

Conformity of the Commonwealth's taxation system with the Internal Revenue Code; emergency. Advances Virginia's date of conformity with the Internal Revenue Code from December 31, 2021, to December 31, 2022.

SB 882: Internal Revenue Code; conformity of the Commonwealth's taxation system. (Emergency Clause) Reported from House Finance Committee (21-Y 0-N), now on House Floor

Conformity of the Commonwealth's taxation system with the Internal Revenue Code; emergency. Advances Virginia's date of conformity with the Internal Revenue Code from December 31, 2021, to December 31, 2022.

SB 1405: Income tax; rolling conformity; report. Passed the Senate (39-Y 0-N) and Reported from House Finance with substitute (21-Y 0-N)

Income tax; rolling conformity; report. Provides that Virginia shall generally conform to federal tax laws on a rolling basis, meaning that Virginia tax laws incorporate changes to federal income tax law as soon as Congress enacts them on or after January 1, 2023. However, the bill provides that Virginia shall not conform to any changes in a single act of Congress with an impact of more than $50 million on revenues in the year in which the amendment was enacted or any of the next four years. For any amendment enacted on or after January 1, 2024, the $50 million impact threshold shall be adjusted annually by the change in the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for the previous year

Transient Occupancy Tax

HB 1442: Transient occupancy tax; administration. Passed the House (100-Y 0-N) and Passed the Senate (39-Y 0-N)

Transient occupancy tax; administration. Requires the Department of Taxation to annually publish on its website the current transient occupancy tax rates imposed in each locality. The bill also (i) requires the tax-assessing officer of a locality to administer and enforce the assessment and collection of transient occupancy taxes from accommodations intermediaries, (ii) specifies certain return filing requirements for accommodations intermediaries, and (iii) directs the Compensation Board to contract with a third-party provider for development of an electronic interface that enables accommodations intermediaries, beginning on July 1, 2024, to provide a single filing and remittance system for transient occupancy taxes due for all localities.

Consumer Protection Act

HB 1517: Virginia Consumer Protection Act; automatic renewal or continuous service offers. Reported from General Laws and Technology with substitute (15-Y 0-N)

Virginia Consumer Protection Act; automatic renewal or continuous service offers; cancellation reminders; prohibited practices. Requires suppliers of automatic renewals or continuous service offers that include a free trial to, within 30 days of the end of any such free trial, notify the consumer of his option to cancel the free trial before the end of the trial period to avoid an obligation to pay for the goods or services. The bill provides that failure to notify a consumer of such option is a violation of the Virginia Consumer Protection Act. The bill also makes it a violation of the Virginia Consumer Protection Act for a supplier to fail to disclose the total cost of a good or service to a consumer, including any mandatory fees or charges, prior to entering into an agreement for the sale of any such good or provision of any such service.

Sales Tax Exemptions

HB 1563: Sales and use tax; agricultural exemptions. Passed the House (87-Y 11-N 2-A) and Passed the Senate (39-Y 0-N)

Sales and use tax; agricultural exemptions. Provides a sales and use tax exemption for property used to produce agricultural products for market in an indoor, closed, controlled-environment commercial agricultural facility. The property exempted includes (i) internal structural components required to create the necessary growing environment for plants, including watering systems, towers for growing plants, and lighting and air systems, and (ii) transparent elements of external structural components of such facilities, including windows, walls, and roofs, that allow sunlight in for the commercial production of agricultural products. The exemption shall not apply to property used in producing cannabis.

ABC

HB 1866: Alcoholic beverage control; suspension or revocation of certain retail licenses, reinstatement. Passed the House (52-Y 48-N) and Reported from Senate Rehabilitation and Social Services with amendment (15-Y 0-N)

Alcoholic beverage control; suspension or revocation of certain retail licenses; reinstatement. Provides that if the Board of Directors of the Virginia Alcoholic Beverage Control Authority suspends or revokes the license of a retail establishment due solely to the fact that the establishment's food establishment permit from the Department of Health was revoked or suspended, the Board shall automatically reinstate such license once the Department of Health has reinstated the food establishment permit, provided that the licensee is in compliance with all applicable provisions of law.

HB 1979: Alcoholic beverage control; displays of wine and beer. Passed the House (99-Y 1-N) and Reported from Senate Rehabilitation and Social Services with amendments (15-Y 0-N)

Alcoholic beverage control; displays of wine and beer. Requires licensees that sell wine and beer for off-premises consumption, when displaying such wine and beer outside a clearly discernible location reserved solely for alcoholic beverages, to (i) not place such wine or beer in an area immediately adjacent to nonalcoholic beverages containing the same or similar brand name, logo, or packaging as an alcoholic beverage and (ii) equip any such display with signage that indicates the product is an alcoholic beverage available only to persons who are 21 years of age or older, is clearly visible to consumers, and is of sufficient size to notify the consumer of the product's alcohol content. The bill clarifies that its provisions do not prohibit the placement of nonalcoholic wine or beer in or near a display of alcoholic beverages that contain the same or similar brand name, logo, or packaging as the nonalcoholic wine or beer.

HB 2336: Alcoholic beverage control; marketplace license fees. Passed the House (94-Y 6-N) and Reported from Senate Rehabilitation and Social Services with amendments (15-Y 0-N)

Alcoholic beverage control; marketplace license fees. Lowers the annual state license fee from $1,000 to $500 and the annual local license tax from $200 to $100 for marketplace licenses when the license privileges are exercised during a period of six or less consecutive months and such period is specified prior to the beginning of the license year.

SB 809: Alcoholic beverage control; displays of wine and beer. Passed the Senate(37-Y 1-N) and reported from House General Laws (22-Y 0-N)

Alcoholic beverage control; displays of wine and beer. Requires licensees that sell wine and beer for off-premises consumption, when displaying such wine and beer outside a clearly discernible location reserved for alcoholic beverages, to (i) not place such wine or beer in an area immediately adjacent to nonalcoholic beverages containing the same or similar brand name, logo, or packaging as an alcoholic beverage and (ii) equip any such display with signage that indicates the product is an alcoholic beverage, is clearly visible to consumers, and is of sufficient size to notify the consumer that the product contains alcohol. The bill clarifies that its provisions do not prohibit the placement of nonalcoholic wine or beer in or near a display of alcoholic beverages that contain the same or similar brand name, logo, or packaging as the nonalcoholic wine or beer.

Yesterday was Crossover, which is the deadline for a bill to pass out of the chamber in which it was introduced and move to the opposite chamber. Starting today, the House and Senate will begin their work on bills that have passed out of the opposite chamber. Below you will find the list of key bills that impact the Retail Industry. Each subject area is broken down by active bills and those that have been defeated.

To view a complete bill tracking list,  click here. As always, your Virginia Retail Federation team will keep you informed on legislative issues throughout the remainder of the 2023 Session.

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Week three of the 2023 Session picked up the pace, with hundreds of bills being heard and acted on in their respective committees. The week ahead of us will be very busy as the House and Senate chambers move to pass legislation ahead of “Crossover” on February 7th. That is the deadline for any bill to be reviewed by the chamber in which it was introduced. 

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