General Overview

Item 272(E) of the 2019 Appropriation Act (House Bill 1700, Chapter 854) requires Virginia Tax to convene a working group to study the impact of the limitation on the federal deduction for interest expenses on businesses that are part of an affiliated group and that file a Virginia combined or consolidated return. Virginia Tax has convened a working group of interested parties and held its first meeting with the group on May 20, 2019. Anyone interested in joining the working group may do so by emailing their contact information to

Virginia Tax is also required to develop and make available guidelines regarding the determination of the limitation of interest expense under section 163(j) of the Internal Revenue Code by December 1, 2019. Such guidelines will apply to taxable years beginning on or after January 1, 2018.

May 20th Working Group Meeting Information

On May 20, 2019, Virginia Tax held a meeting with the Internal Revenue Code §163(j) study working group to discuss various aspects regarding the study. Virginia Tax completed a presentation regarding the study that included an:

  • Overview regarding the purpose of the meeting and the study the working group is required to complete;
  • Explanation of Internal Revenue Code §163(j) and Virginia combined and consolidated filing methods

After completing its presentation, Virginia Tax provided time for the working group to ask questions and to discuss issues related to the study. Virginia Tax also asked members of the working group to submit comments regarding the comments in writing.

Please find information regarding the May 20 working group meeting at the links below:

Initial Comments Regarding the Guidelines

Legislative Documents

  • Item 272(E) of the 2019 Appropriation Act (House Bill 1700, Chapter 854)