Lost in all the brouhaha over Del. Mark Keam holding up the hammer-and-sickle image behind Del. Lee Carter’s head yesterday is the actual substance of this bill. Here’s a brief Facebook post from Del. Carter, explaining his position on this issue. I’d also note that Del. Carter was far from the only one to oppose this bill: in Senate Finance Committee on 2/7, it was opposed by Senate Majority Leader Tommy Norment (R), Sen. Janet Howell (D), Senate Minority Leader Dick Saslaw (D), Sen. Louise Lucas (D) and Sen. George Barker (D); on the Senate floor 2/12, it was opposed by 14 out of 19 Democrats (Barker, Ebbin, Favola, Howell, Locke, Lucas, Marsden, McClellan, McPike, Petersen, Saslaw, Spruill, Surovell, Wexton); and yesterday in House Finance it was opposed by several conservative Republicans (Ware, Orrock, Cole, Bloxom). So…this certainly does NOT break down on clean, ideological lines, nor does opposing this expensive corporate welfare bill qualify someone as being a “commie” or whatever. Which makes Del. Keam’s gesture yesterday even more nonsensical than we already thought it was…
P.S. I’ve posted the text of the bill below Del. Carter’s Facebook post so everyone can read it for themselves.
I share this video not to rehash today’s incident, but to redirect attention onto the message I was speaking to, on how economic development policy in the Commonwealth needs to help those living in impoverished areas, not provide tax breaks for large out-of-state corporations.
Measures to fight poverty are crucial, but they must address poverty head on – not use mechanisms that just shift Virginia’s poor to other localities. We deserve better than that.
Income tax; modification for certain companies and subtraction for their employees; local grants. Establishes an income tax modification for companies that, from 2018 through 2028, either (i) invest at least $5 million in new capital investment in a qualified locality and create at least 10 jobs paying at least twice the minimum wage in a qualified locality or (ii) create at least 50 jobs paying at least twice the minimum wage in a qualified locality. A company is eligible to claim the modification only if it had no property or payroll in Virginia on the effective date of the act.
The bill defines “qualified locality” to include (a) the Counties of Bland, Buchanan, Carroll, Dickenson, Giles, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Wise, and Wythe and the Cities of Bristol, Galax, and Norton; (b) the Counties of Amelia, Appomattox, Buckingham, Charlotte, Cumberland, Halifax, Henry, Lunenburg, Mecklenburg, Nottoway, Patrick, Pittsylvania, and Prince Edward and the Cities of Danville and Martinsville; (c) the Counties of Accomack, Caroline, Essex, Gloucester, King and Queen, King William, Lancaster, Mathews, Middlesex, Northampton, Northumberland, Richmond, and Westmoreland; and (d) the City of Petersburg. “Qualified locality” also includes certain real property owned or partly owned by such localities outside of their territorial boundaries.
The bill requires a company to obtain annual certification from the Virginia Economic Development Partnership Authority (the Authority) that the company will have a positive fiscal impact on Virginia, based on consideration of certain factors. It directs the Authority to deny certification to any company that reorganizes for the purpose of taking advantage of the tax benefits provided by the bill.
Generally, the amount of the modification is the value of the company’s property and payroll in qualified localities. The bill provides similar modifications for industries that use different apportionment formulas, including motor carriers, financial companies, construction companies, railway companies, manufacturing companies, retailers, and businesses with enterprise data center operations.
The bill also establishes a subtraction from individual income tax for employees of an eligible company. Such employees may subtract up to $250,000 of compensation received from an eligible company. Eligibility for the corporate and individual income tax subtractions shall continue for nine years following the year in which the company initially makes a modification to its apportionment formula. Continuing eligibility is contingent on the company’s maintaining its capital investment and jobs created in qualified localities.
The bill permits qualified localities to provide grants and loans to companies that qualify for the modification provided by the bill.