During the 2022 Session, the Virginia General Assembly enacted House Bill 453 (2022 Acts of Assembly, Chapter 256) and Senate Bill 346 (2022 Acts of Assembly, Chapter 257), which allow property information and analytics firms that have a signed memorandum of understanding with the Virginia Economic Development Partnership Authority (“the Authority”), and meet certain job creation and investment criteria to use a hybrid sales factor when filing Virginia corporate income tax returns. For sales of other than sales of tangible personal property, the hybrid sales factor uses a market-based sourcing rule for sales of services and the standard cost of performance rule for all other non-service sales. Under this legislation, market-based sourcing is based upon where the benefit of the service is received. 

The legislation defines a “property information and analytics firm” as an entity and its affiliated entities that as of January 1, 2022, is primarily a commercial real estate information and analytics firm with a location in the city of Richmond that between January 1, 2022, and January 1, 2029 is expected to: 

  • Make or cause to be made a capital investment in the city of Richmond of at least $414.45 million and 
  • Create at least 1,785 new jobs with average annual wages of at least $85,000 per job. 

This legislation requires Virginia Tax to promulgate guidelines regarding the use of market-based sourcing for certain property information and analytics firms. 

Legislative and Other Documents

House Bill 453 (2022)

Senate Bill 346 (2022) 

Guideline Development Documents