The Middle Class and Small Business Tax Relief Act

All across Virginia, middle class families and small businesses need help.  By cutting taxes on the families and businesses that need it most, while taking modest and fiscally responsible steps to protect money for education and transportation, passing the Middle Class and Small Business Tax Relief Act would be a step forward for all Virginians.

Read the full legislative language.

Download the Fiscal Impact Statement.

Quick Facts about the Middle Class and Small Business Tax Relief Act

Eliminates state sales tax on food for all Virginians.
Eliminates the 1.5% state sales tax on food.
$1.25B tax relief for ALL Virginians (7,636,644 people in 2,909,223 households) over next five years.

Eliminates corporate income tax for 22,000 small businesses.
Eliminates the 6% corporate income tax for businesses making less than $100,000 per year.
$133.6M tax relief to 22,000 businesses over next five years.

Cuts income taxes for 42% of Virginia taxpayers.
Reduces income taxes for 42% of Virginia taxpayers who make between $17,000 and $75,000 per year to 5.6%.
$650M tax relief to 1,461,506 Virginians over next five years.
Note on definition of “Middle Class”: Median household income in Virginia in 2007 was $61,210.

Pays for tax relief by raising income tax rate on the wealthiest 0.04% of Virginians by just 1.25%.
For each $100,000 above $400,000, individual pays additional $1250 in income tax.
Affects just 30,693 Virginians — wealthiest 0.04% of Virginians.
Raises sufficient revenue to fully pay for cuts in plan.

Completely protects existing K-12 allocation to localities.
Currently, revenue from 1% state sales tax on food goes to localities for education.
Plan preserves both the amount and the timing of that allocation – it just changes the revenue source.

Completely protects existing Transportation Trust Fund dollars.
Currently, revenue from 0.5% state sales tax on food goes to Transportation Trust Fund.
Plan preserves both the amount and the timing of that allocation – it just changes the revenue source.