Income tax, corporate; apportionment of income for manufacturers. (HB1122)

Introduced By

Del. Kathy Byron (R-Lynchburg) with support from 6 copatrons, whose average partisan position is:

Those copatrons are Del. Watkins Abbitt (I-Appomattox), Del. Clay Athey (R-Front Royal), Del. Danny Marshall (R-Danville), Del. Lacey Putney (I-Bedford), Del. Ron Villanueva (R-Virginia Beach), Sen. Frank Wagner (R-Virginia Beach)


Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law


Corporate income tax; apportionment of income for manufacturers.  Removes language that requires any manufacturer who uses the single sales factor apportionment formula and does not reach certain employee hiring goals during the first three years after using such apportionment formula, to pay additional taxes as well as penalties. Read the Bill »


Bill Has Failed


01/13/2010Prefiled and ordered printed; offered 01/13/10 10102430D
01/13/2010Referred to Committee on Finance
01/17/2010Impact statement from TAX (HB1122)
01/19/2010Assigned Finance sub: #2
01/20/2010Subcommittee recommends reporting (10-Y 0-N)
02/10/2010Reported from Finance (22-Y 0-N) (see vote tally)
02/12/2010Read first time
02/15/2010Read second time and engrossed
02/16/2010Read third time and passed House BLOCK VOTE (99-Y 0-N)
02/16/2010VOTE: BLOCK VOTE PASSAGE (99-Y 0-N) (see vote tally)
02/17/2010Constitutional reading dispensed
02/17/2010Referred to Committee on Finance
02/19/2010Impact statement from TAX (HB1122)
03/02/2010Failed to report (defeated) in Finance (7-Y 7-N) (see vote tally)


This bill was discussed on the floor of the General Assembly. Below is all of the video that we have of that discussion, 2 clips in all, totaling 1 minute.


Ali Faruk writes:

the single sales factor was a tax giveaway to big corporations in Va. This bill removes the job-creation requirement so that we can't even pretend the tax giveaway was for "job creation" in the first place

David Wright writes:

The bill's not a "giveaway"; it's a measure to deal with the reality of what goes on in a manufacturing company during a general recession such as the one we've been in. Current law has a provision to punish those companies who have apportioned income tax based on sales and then subsequently had to lay people off by assessing the higher taxes PLUS a penalty. The reasoning of the current law is that these companies don’t deserve the better tax arrangement meant to increase jobs because they actually laid people off.
Ordinarily that might make some sense- if the bigwigs aren’t doing what we wanted them to do then why are they being given a break?

Well the problem is, in a general widespread recession such as this one- when demand is down in every industry across the board- guess what, EVERYONE has a reduction-in-force- its just a matter of how big. The first thing they will do when sales are down long-term for economic reasons is turn to cost savings initiatives- reductions in capital spending, elimination of lines with higher cost inputs, eliminations of general and administrative positions- anything to reduce overhead and cut costs so the doors can stay open. That means inevitably, reductions in headcount. ALL sizeable manufacturing businesses do this by the way, not just those evil, greedy, uncaring ones you dislike so much. It's how you keep cash flows up, credit flowing, and investors committed during a period of tough times. It's how you keep your business afloat.

If the state turns around and punishes every business out there for doing what everyone has to do and has always had to do during a recession, it would only hurt the business even more and leave them scrambling in a worse way to reduce costs. More taxes and tax penalties means less resources for payroll- that’s an unfortunate but true fact. They would only turn around and lay off more people to cover the additional tax expense and further exacerbate the problem.

I doubt that people who have never worked in the private sector and are getting paid by advocacy groups to push the same tired, anti-corporate agenda would understand the intent or the implications of a bill such as this. But for the people who DO work in manufacturing and whose jobs are in danger, or for those who are trying hard to GET a job in one of the many struggling manufacturing areas around Virginia, this bill does actually mean quite a bit.