Enactments (Conformity with Internal Revenue Code) (language only)

Item 5-0.00 #2c

Language
Page 430, after line 36, insert:
"
3. That § 58.1-301 of the Code of Virginia is amended and reenacted as follows:
§ 58.1-301.  Conformity to Internal Revenue Code.
A.  Any term used in this chapter shall have the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required.
B.  Any reference in this chapter to the laws of the United States relating to federal income taxes shall mean the provisions of the Internal Revenue Code of 1954, and amendments thereto, and other provisions of the laws of the United States relating to federal income taxes, as they existed on
December 31, 2008, January 22, 2010, except for:
1.  The special depreciation allowance for certain property provided for under §§ 168(k), 168(l), 168(m), 1400L, and 1400N of the Internal Revenue Code;
2.  The carry-back of certain net operating losses for five years under § 172(b)(1)(H) of the Internal Revenue Code;
3.  The original issue discount on applicable high yield discount obligations under § 163 (e)(5)(F) of the Internal Revenue Code;
4.  The deferral of certain income under § 108 (i) of the Internal Revenue Code.  For Virginia income tax purposes, income from the discharge of indebtedness in connection with the reacquisition of an "applicable debt instrument" (as defined under § 108 (i) of the Internal Revenue Code) reacquired in taxable year 2009 shall be fully included in the taxpayer's Virginia taxable income for taxable year 2009, unless the taxpayer elects to include such income in the taxpayer's Virginia taxable income ratably over a 3-taxable-year period beginning with taxable year 2009.  For purposes of such election, all other provisions of § 108 (i) shall apply mutatis mutandis. No other deferral shall be allowed for income from the discharge of indebtedness in connection with the reacquisition of an "applicable debt instrument";
5.  The amount of the deduction allowed for domestic production activities pursuant to § 199 of the Internal Revenue Code for taxable years beginning on or after January 1, 2010.  For Virginia income tax purposes, (i) two-thirds of the amount deducted pursuant to § 199 of the Internal Revenue Code for federal income tax purposes for taxable year 2010 may be deducted for Virginia income tax purposes for taxable year 2010, (ii) one-third of the amount deducted pursuant to § 199 of the Internal Revenue Code for federal income tax purposes for taxable year 2011 may be deducted for Virginia income tax purposes for taxable year 2011, (iii) one-third of the amount deducted pursuant to § 199 of the Internal Revenue Code for federal income tax purposes for taxable year 2012 may be deducted for Virginia income tax purposes for taxable year 2012, (iv) one-sixth of the amount deducted pursuant to § 199 of the Internal Revenue Code for federal income tax purposes for taxable year 2013 may be deducted for Virginia income tax purposes for taxable year 2013, and (v) no deduction shall be allowed for Virginia income tax purposes for any amount deducted pursuant to § 199 of the Internal Revenue Code for federal income tax purposes for taxable year 2014 or any taxable year thereafter;
6.  For taxable years beginning on or after January 1, 2010, the provisions of § 32(b)(3) of the Internal Revenue Code relating to the earned income tax credit; and
7.  For taxable years beginning on or after January 1, 2010, the deduction for qualified motor vehicle taxes pursuant to § 164(a)(6) of the Internal Revenue Code.
The Department of Taxation is hereby authorized to develop procedures or guidelines for implementation of the provisions of this section, which procedures or guidelines shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq. of the Code of Virginia)."

Explanation
(This amendment conforms the Code to certain federal tax actions that occurred between January 1, 2009 and January 22, 2010.)