Small business group urges Virginia lawmakers to approve budget with tax cut
A small business group is urging Virginia lawmakers to finish their budget work and pass a budget that includes tax relief.
Lawmakers entered into a special session last week to address the state budget after failing to reach an agreement before their regular session deadline. One point of contention is whether the state should introduce a broad tax cut by doubling the standard deduction. The National Federation of Independent Business is asking lawmakers to include the tax cut, which they say will help some of their members.
“The small business owners who survived the pandemic are now struggling with the highest inflation in 30 years plus added concerns about the country’s economic outlook,” Julia Hammond, the Virginia state director for the NFIB, said in a statement. The NFIB is the largest small business association in the country.
“That’s the reason why lawmakers here in Virginia need to get their act together and pass reforms that would not only help the mainstay of our economy, small business owners, but every Virginian,” Hammond said. “Small businesses need three things: A reduction in taxes in the form of conforming Virginia’s standard deduction to the federal level, gas tax relief and fully funding the unemployment trust fund.”
The House of Delegates, which is narrowly controlled by Republicans, included a provision to double the standard deduction in their budget bill. The standard deduction would increase from $4,500 to $9,000 for single filers and from $9,000 to $18,000 for married filers. This would provide a tax cut for the middle class. The Senate, which is narrowly controlled by Democrats, opposes any changes to the standard deduction. Under current law, the standard deduction would remain the same until 2026, at which point it is set to decrease to $3,000 for single filers and $6,000 for married filers, which would provide a tax hike on the middle class.
Lawmakers also have disagreements on how to handle the gasoline tax: Republicans want to suspend the gas tax for three months and Democrats want to provide $50 rebates for drivers. Both sides of the aisle support increasing funds to the unemployment trust fund to prevent a tax increase on businesses, which would kick in if the fund was low in money.
Hammond encouraged lawmakers to work quickly.
“Here’s the deal,” Hammond said. “Lawmakers need to get back to the table and finish what they started.
Robert Melvin, the director of government affairs at the Virginia Restaurant, Lodging & Travel Association, told The Center Square his organization is not looking closely at the standard deduction, but it does hope lawmakers reach a deal on the budget before the end of the fiscal year and include funding for the unemployment trust fund.
“It does make us uneasy the longer this goes on,” Melvin said. “…The sooner [they finish], the better.”
Melvin said delays in passing the budget could also affect signed legislation that requires budget appropriations, such as the Rebuild Virginia program and tax conformity. With the tax filing deadline approaching, he said he has some concerns about how that would work.
House and Senate lawmakers are still in a joint conference committee with each other to hash out their differences and reach a compromise bill.
This article was originally posted on Small business group urges Virginia lawmakers to approve budget with tax cut