Bulletin Number
VTB 82-15
Tax Type
Corporation Income Tax
Fiduciary Income Tax
General Provisions
Individual Income Tax
Partnerships
Description
Omnibus Tax Bill
Topic
Basis of Tax
Taxable Income
Date Issued
06-15-1982
Virginia Tax Bulletin
Date: June 15, 1982
Subject: Omnibus Tax Bill
Senate Bill 69, referred to herein as the Omnibus Tax Bill, was enacted by the 1982 General Assembly. The bill made numerous changes in Virginia tax laws, primarily affecting the taxation of businesses conducted in Virginia.
Income Taxes
Income tax laws were amended to defer for Virginia income tax purposes an estimated amount of additional deductions allowed as depreciation under the federal Accelerated Cost Recovery System (ACRS) by requiring an addition to federal taxable income in the two taxable years first beginning on or after January 19 1982 and by providing a subtraction in each of the next five taxable years to recover the amount of additions. The deferral is applicable to all Virginia taxpayers, corporate and noncorporate, who utilize ACRS to determine the depreciation deduction for federal income tax purposes.
The addition in each of the first two taxable years is 30% of the ACRS deduction and the subtraction in each of the next five taxable years is 20% of total ACRS additions plus any portion of allowable subtractions for preceding years not offset by taxable income in such preceding years. Additionally, any portion of additions not subtracted by the end of the fifth year of the subtraction period may be carried back and applied to reduce taxable income in any of the previous four years of the subtraction period. See §§ 58-151.013(b)(6), 58-151.013(c)(10), 58-151.013:1, 58-151.032, 58-151.032:1 and 58-151.032:2, Code of Virginia.
Income tax laws were also amended, effective for taxable years beginning on and after January 1, 1982, to restore to federal adjusted gross income for Virginia individual income tax purposes the two-earner married couple deduction as allowed for federal tax purposes under § 221 of the Internal Revenue Code. See §58-151.013(b)(5), Code of Virginia.
The final change to income tax laws was a technical amendment to limit the Virginia deduction for expenses for household and dependent care services to the amount of employment-related expenses upon which the federal credit is based under §44-A of the Internal Revenue Code. This amendment is effective for taxable years beginning on and after January 19 1982. See § 53-151.013(d)(4), Code of Virginia.
Franchise Taxes on Public Service Corporations
Senate Bill 69 amended tax laws administered by the State Corporation Commission which impose franchise taxes on the gross receipts of certain public service corporations. The amendments remove the statutory rate reductions previously scheduled for 1983, 1984, 1985 and 1986 and impose the 1982 rates for such years. These amendments are effective July 19 1982. See §§58-580 and 58-603, Code of Virginia.
Tax on Capital Not Otherwise Taxed
State tax on capital not otherwise taxed was repealed by Senate Bill 69. However, the law was amended to define as intangible personal property all property previously defined as capital not otherwise taxed and a tax is levied on inventory, only, at the rate of 30¢ per $100 of value. The repeal of capital tax and the imposition of intangible personal property tax on inventory will be effective January 1, 1983. See §§ 53 405 58-412.19 58-412.29 58-413, 58-414, 58-4159 58-416, 58-417, 58-422 and 53-4239 Code of Virginia.
State Business License Taxes
All state business license taxes were repealed by Senate Bill 69 and certain limitations and regulatory provisions, previously applicable to state licensing of businesses, are made applicable to local licensing of businesses. These provisions will be effective January 1, 1983. See §§58-266.1, 58-266.7, 58-266.8, 58-266.9, 58-266.10, 58-2999 58-340, 58-374, 58-377.1 and 58-393.1, Code of Virginia. See also Virginia Tax Bulletin 82-14, 1982 Legislative Changes Regarding Certain Local Revenue Licenses
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