Model Virginia HB979 Income Tax Reform (2027+)

[DTrim99]

Summary

Model the income tax and standard deduction changes proposed in Virginia HB979, introduced by Delegate Vivian Watts.

Bill Links:

• Summary: https://lis.virginia.gov/bill-details/20261/HB979
• Bill text: https://lis.blob.core.windows.net/files/1086770.PDF

Changes to Model

1. Income Tax Brackets (Effective 2027-01-01)

HB979 adds two new high-income brackets to Virginia's income tax structure (§58.1-320):

Taxable Income	Current Rate	HB979 Rate
$0 - $3,000	2%	2%
$3,000 - $5,000	3%	3%
$5,000 - $17,000	5%	5%
$17,000 - $600,000	5.75%	5.75%
$600,000 - $1,000,000	5.75%	8%
$1,000,000+	5.75%	10%

2. Standard Deduction (Effective 2027-01-01)

HB979 establishes new standard deduction amounts (§58.1-322.03(1)(b)(vi)):

Filing Status	Baseline (2027+)	HB979 Amount
Single	$3,000	$10,000
Head of Household	$3,000	$15,000
Married Filing Jointly	$6,000	$20,000
Married Filing Separately	$3,000	$10,000

Note: Standard deduction amounts will be indexed for inflation beginning January 1, 2028, based on the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).

Implementation Approach

Model as a contrib reform following the RI high earner tax pattern:

Parameters (gov/contrib/states/va/hb979/)

• in_effect.yaml - Boolean to enable/disable reform
• brackets.yaml - New income tax brackets with 8% and 10% rates
• standard_deduction.yaml - New standard deduction amounts by filing status

Reform (reforms/states/va/hb979/)

• va_hb979_reform.py - Reform that modifies:
  • va_income_tax_before_non_refundable_credits - Apply new brackets
  • va_standard_deduction - Apply new standard deduction amounts

Tests (tests/policy/baseline/contrib/states/va/hb979/)

• Test cases for various income levels (below $600k, $600k-$1M, above $1M)
• Test cases for each filing status standard deduction
• Test reform not in effect scenario

References

• Code of Virginia § 58.1-320 (Income Tax Rates)
• Code of Virginia § 58.1-322.03 (Standard Deductions)
• Virginia HB979 (2026 Regular Session)