Page 784

_____ 784 A. 1. For taxable years beginning on and after January 1, 2021, but before January 1, 2022, a pass-through entity may make an election, in a format and according to such requirements and procedures to be established by the Department, to pay the tax levied by this section at the entity level for the taxable year. Such election shall be made on or before a date to be determined by the Department, which shall be set no earlier than one year after the extended due date for filing the applicable return. Notwithstanding §§ 58.1-1812 and 58.1-1833, no interest shall accrue on underpayments or overpayments solely attributable to such election. 2. For taxable years beginning on and after January 1, 2022, but before January 1, 20262027, a pass-through entity may make an annual election, on its timely filed return pursuant to § 58.1-392, to pay the tax levied by this section at the entity level for the taxable period covered by such return. Such election shall be made on or before the due date for filing the applicable return, including any extensions that have been granted. B. A tax at the rate of 5.75 percent is hereby annually imposed on the Virginia taxable income, as calculated pursuant to § 58.1-391 but taking into account only the pro rata or distributive share of each item of income, gain, loss, or deduction attributable to eligible owners, for each taxable year of every pass-through entity that makes the election provided under subsection A. C. In computing the tax imposed by this section, the pro rata or distributive share of the Virginia taxable income of each nonresident eligible owner shall be limited to income that is attributable to Virginia sources and shall be subject to the modifications to income as described in §§ 58.1-322.01 through 58.1-322.04. D. A pass-through entity that elects to pay the tax levied by subsection B shall be eligible for all credits, deductions, or other adjustments to taxable income under § 58.1-391, provided that a pass-through entity's taxable income shall be adjusted to eliminate any federal deduction for state and local income taxes. E. Any person that is subject to the tax imposed under § 58.1-320 or 58.1-360 and is an eligible owner of a pass-through entity making the election pursuant to this section shall be entitled to a credit against the tax imposed, provided that taxable income has been adjusted to add back any deduction for state and local income taxes paid by the pass-through entity. Such credit shall be in an amount equal to such person's pro rata share of the tax paid under this section by any pass-through entity of which such person is an owner. If the amount of the credit allowed pursuant to this subsection exceeds such person's tax liability for the tax imposed under § 58.1-320 or 58.1-360, as applicable, such excess shall be treated as an overpayment and refundable pursuant to § 58.1-499. F. If any pass-through entity makes an election pursuant to this section, the Department shall assess and collect tax, interest, and penalties as if such tax is a corporate income tax imposed pursuant to the provisions of Article 10 (§ 58.1-400 et seq.). G. The Department shall develop and make publicly available guidelines implementing the provisions of this section and the credit authorized by subdivision C 2 of § 58.1-332. 12. That the second enactment of Chapter 763 of the Acts of Assembly of 2023 and the second enactment of Chapter 791 of the Acts of Assembly of 2023 are amended and reenacted as follows: 2. That the provisions of this act shall apply to taxable years beginning on and after January 1,2023. Notwithstanding subdivision B 11 of § 58.1-301, as amended by this or any other act, Virginia shall not conform to (i) any amendment enacted on or after January 1, 2025, but before January 1, 2027, with a projected impact that would increase or decrease general fund revenues by any amount in the fiscal year in which the amendment was enacted or any of the succeeding four fiscal years and (ii) all amendments enacted on or after January 1, 2025, but before January 1, 2027, if the cumulative projected impact of such amendments would increase or decrease general fund revenues by any amount in the fiscal year in which the amendments were enacted or any of the succeeding four fiscal years. The provisions of this enactment shall not apply to any amendment to federal income tax law that is either subsequently adopted by the General Assembly or a federal tax extender as defined under subdivision B 11 of § 58.1-301, as created by this act. 13. That, notwithstanding any other provision of law to the contrary, the Virginia Commonwealth University Health System Authority (the Authority) shall not be required to remit any payment to the City of Richmond pursuant to (i) the Delegation and Assumption Agreement for Guaranteed Obligations (the Delegation) entered into June 15, 2021, by the Authority in the City of Richmond or (ii) any other contract, agreement or instrument related to obligations of the Authority pursuant to the Delegation, unless and until the General Assembly provides explicit authorization therefor. 414. That the provisions of the first and second enactment enactments of this act shall expire at midnight on June 30, 2026. 515. That the provisions of the second third, fifth, sixth, seventh, eighth, ninth, tenth, eleventh, twelfth, and thirteenthenactment enactments of this act shall have no expiration date. 616. That the provisions of the third fourth enactment of this act are declarative of existing law and shall have no expiration date.