Virginia Governor Glenn Youngkin signed the state budget bills, H.B. 6001 and H.B. 6002, on May 13. While these bills do not currently expand the sales tax base to digital goods, they do establish a Joint Subcommittee on Tax Policy. This subcommittee is tasked with exploring ways to modernize Virginia’s income and sales and use taxes during the 2024 interim. Key objectives include evaluating existing sales and use tax exemptions and considering the application of sales and use tax to digital goods and services, including business transactions.
Governor Youngkin emphasized the bipartisan effort behind the budget, highlighting the state’s strong labor market and record revenues, which have enabled historic investments in various sectors, including childcare, behavioral health, law enforcement, conservation, and education. The budget includes significant raises for educators, building on the previous twelve percent increase with an additional three percent raise each of the next two years. Taxpayers should monitor the actions of the Subcommittee on Tax Policy for any potential upcoming changes or expansion of sales tax to digital goods. (Virginia H.B. 6001 and 6002, Virginia Governor, May 13, 2024)