2027 SESSION

INTRODUCED

27100366D

SENATE BILL NO. 849

Offered January 13, 2027

Prefiled October 26, 2026

A BILL to amend and reenact § 58.1-320 of the Code of Virginia, relating to individual income tax; rates and distribution.

—————

Patron—Locke

—————

Referred to Committee on Finance and Appropriations

—————

Be it enacted by the General Assembly of Virginia:

1. That § 58.1-320 of the Code of Virginia is amended and reenacted as follows:

§ 58.1-320. Imposition of tax.

A. A tax is hereby annually imposed on the Virginia taxable income for each taxable year of every individual as follows:

1. Two percent on income not exceeding $3,000;.

2. Three percent on income in excess of $3,000, but not in excess of $5,000;.

Five percent on income in excess of $5,000, but not in excess of $12,000 for taxable years beginning before January 1, 1987;

Five percent on income in excess of $5,000 but not in excess of $14,000 for taxable years beginning January 1, 1987, through December 31, 1987;

Five percent on income in excess of $5,000 but not in excess of $15,000 for taxable years beginning January 1, 1988, through December 31, 1988;

Five percent on income in excess of $5,000 but not in excess of $16,000 for taxable years beginning January 1, 1989, through December 31, 1989;

3. Five percent on income in excess of $5,000 but not in excess of $17,000 for taxable years beginning January 1, 1990;.

Five and three-quarters percent on income in excess of $12,000 for taxable years beginning before January 1, 1987;

Five and three-quarters percent on income in excess of $14,000 for taxable years beginning January 1, 1987, through December 31, 1987;

Five and three-quarters percent on income in excess of $15,000 for taxable years beginning January 1, 1988, through December 31, 1988;

Five and three-quarters percent on income in excess of $16,000 for taxable years beginning January 1, 1989, through December 31, 1989; and

4. a. Five and three-quarters percent on income in excess of $17,000 for taxable years beginning on and after January 1, 1990, through December 31, 2026; and

b. Five and three-quarters percent on income in excess of $17,000 but not in excess of $1,000,000 for taxable years beginning on and after January 1, 2027.

5. Ten percent on income in excess of $1,000,000 for taxable years beginning on and after January 1, 2027.

B. All revenues collected on income taxed under subdivision A 5 shall be distributed as follows:

1. Forty percent of such revenues shall be used to provide additional basic aid funding for public schools, which shall be apportioned to local school boards pursuant to Article 1 (§ 22.1-88 et seq.) of Chapter 8 of Title 22.1;

2. Thirty-five percent of such revenues shall be dedicated to the Child Care Subsidy Program, as administered by the Department of Social Services and overseen by the Virginia Department of Education pursuant to the partnership entered into on July 1, 2021, in accordance with the powers prescribed under § 22.1-289.03; and

3. Twenty-five percent of such revenues shall be dedicated to the Virginia Housing Trust Fund established pursuant to § 36-142.

C. Any funds distributed pursuant to subsection B shall not be used to supplant funds currently provided by the Commonwealth to (i) basic aid funding for public schools, (ii) the Child Care Subsidy Program, or (iii) the Virginia Housing Trust Fund and shall only be used to increase the total amount of funds available to such programs.