HB 954: Rounding procedures; taxes and fees calculated, report. - Virginia

Subcommittee #2 Subcommittee Substitute → Finance and Appropriations Substitute · 4 edits

MODERATE

The bill was transferred from the House to the Senate, where it was significantly revised to remove the addition of a new permanent state code section. Instead, the bill now grants local governments temporary authority (expiring July 1, 2027) to round tax bills to the nearest five cents to handle the end of the penny, and requires the Department of Taxation to study a permanent solution by November 1, 2026.

Scope change

The bill's scope shifted from creating a new permanent state statute to granting temporary local authority and mandating a state study.

REQUIREMENT

Removed the addition of a new permanent section (58.1-3916.03) that would have allowed localities to set rounding procedures indefinitely.

Added a new requirement for the Department of Taxation to evaluate options and report recommendations to legislative leaders by November 1, 2026.

TIMELINE

Added a specific expiration date of July 1, 2027, for any local rounding ordinances.

SCOPE

Changed the bill text to focus on temporary local authority rather than adding new permanent state sections.

Finance Substitute → Subcommittee #2 Subcommittee Substitute · 1 edit

MINOR

The bill text was reformatted from a standard 'Finance Substitute' layout to a 'House Substitute' layout, including the addition of a bill number and session date. The substantive legal language regarding rounding procedures for cash transactions and local tax adjustments remains unchanged.

TECHNICAL

The document structure and header information were updated to reflect a House Substitute version, including the addition of a bill number (26107179D) and a specific session date, while the actual legislative text was preserved.

Enrolled → Finance Substitute · 4 edits

MODERATE

The bill was converted from an 'Enrolled' final version into a 'Finance Substitute' draft, adding a new section (58.1-3916.03) that grants local governments the authority to set their own rounding rules. This change shifts the responsibility for handling penny elimination from a uniform state mandate to a local option, allowing counties, cities, and towns to decide how to adjust bills for sub-five-cent amounts.

Scope change

The bill's scope expanded to include a new section granting specific authority to local governing bodies to create ordinances regarding rounding procedures, whereas the original version primarily focused on state-level rounding rules and a general directive for the Department of Taxation.

REQUIREMENT

Added a new section (58.1-3916.03) explicitly authorizing local governments to pass ordinances for rounding bills and account balances to the nearest five cents or writing off small amounts.

Modified Section 6.2-200.1 by adding a new subsection (B) that clarifies local governments can override the state's general rounding rules via their own ordinances.

Modified Section 6.2-200.2 by adding a new subsection (C) that allows localities to establish their own rounding procedures, removing the requirement for a state-wide uniform procedure by the Department of Taxation.

TIMELINE

Removed the specific deadline for the Department of Taxation to report findings by November 1, 2026, as the bill now empowers localities to act immediately rather than waiting for a state recommendation.

Introduced → Enrolled · 4 edits · Mar 13, 2026

MODERATE

The bill evolved from a proposal allowing local governments to create their own penny-rounding rules into a comprehensive state law that establishes uniform rounding procedures for all cash transactions across Virginia. The final version adds specific rules for rounding transactions to the nearest five cents, mandates that taxes be calculated before rounding occurs, and sets a temporary deadline for local ordinances to expire by July 1, 2027. This change ensures consistency in how businesses and consumers handle cash transactions as the penny coin is phased out.

Scope change

The bill's scope expanded from applying only to local taxes and account balances to covering all cash transactions involving goods, services, and wages across the entire state, while still allowing temporary local ordinances.

REQUIREMENT

Added specific rounding rules requiring transactions ending in 1, 2, 6, or 7 cents to round down, and those ending in 3, 4, 8, or 9 cents to round up to the nearest five cents.

Added a mandate that all taxes and fees must be calculated on the pre-rounded sales price before any cash rounding is applied.

Added a requirement for the Department of Taxation to evaluate and recommend a uniform statewide procedure for handling penny cessation by November 1, 2026.

TIMELINE

Changed the effective scope from a permanent local option to a temporary state mandate with local ordinances required to expire by July 1, 2027.

Rounding procedures; taxes and fees calculated, report.

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