Pass-Through Tax Makes Virginia Cautious on Revenue Predictions

Virginia Finance Secretary Stephen Cummings said the commonwealth remains cautious about estimating revenue as a result of its workaround to the federal limit on state and local tax deductions.

During a presentation Wednesday to the General Assembly’s Joint Money Committee, Cummings said uncertainty around a new pass-through entity tax left Virginia with about $1 billion more in its coffers than expected. The pass-through entity tax allows partnerships and S corporations to pay state taxes at the entity level, after which members of those organizations can claim a credit on their state personal income taxes, offsetting their share of taxes ...