Monday, January 28, 2008

HB 1514-- Would Change Virginia's Corporate Income Tax for Manufacturers

Legislation Announced to Bolster
Manufacturing Jobs and Investment

RICHMOND, VA – To improve Virginia’s attractiveness as a place for manufacturers to invest and thrive, legislation was introduced by Delegate Kathy Byron to make the Commonwealth’s tax structure more favorable to business and more competitive with other states.

HB 1514 - Single Sales Factor provides the option for manufacturers’ corporate income tax to be based on sales, rather than the current three-part apportionment formula of sales (double-weighted), payroll and property. This more favorable tax structure is attractive to companies with high employment numbers and significant property. Seventeen states, including two competing southern states (Georgia and South Carolina), have adopted some form of the single sales factor. The change would be effective July 1, 2009.

“Virginia has been voted the #1 state to do business and we are very proud of that distinction,” said Delegate Kathy Byron. “But being the best means that you have to constantly find ways to make yourself better and that’s the main reason why I introduced House Bill 1514.”

“According to a recent economic analysis, Virginia will actually save money over time under this bill because the new hiring and capital that will take place will produce more state and local taxes than we will lose by giving the companies the flexibility to choose the single sales factor system. In other words – the benefits far outweigh the costs,” said Delegate Lacey Putney, Chairman of House Appropriations.

Bruce Downey, CEO of Barr Pharmaceuticals said, “We are proud that Barr continues to expand in Virginia with a $62 Million investment in Bedford County. Delegate Byron’s legislation will only further enhance Virginia’s opportunity to attract additional capital investment to the Commonwealth.”

“The Virginia Manufacturers Association and manufacturers across the Commonwealth applaud this effort to help our industry to compete in the production of world class products in the Commonwealth of Virginia,” said Rick Higbie, VMA Chairman.

“This legislation continues those positive efforts to strengthen our competitive edge in this increasingly global economy,” noted Speaker Howell. “We look forward to our friends in the Virginia business community being able to expand, grow and create more jobs because of Delegate Byron's legislation.”

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