Lawmakers reach deal that would return $976M to taxpayers

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RICHMOND, Va. (AP) — Legislative leaders have reached an agreement that would return $976 million to Virginia's taxpayers.

The Richmond Times-Dispatch reports Friday that the agreement endorsed by Gov. Ralph Northam could allow the state to start processing more than a half-million tax returns already filed this season.

It adopts a plan the Senate approved last week to give taxpayers $420 million in refunds next fall to compensate for higher state taxes on 2018 income. It's an unintended consequence of the Tax Cuts and Jobs Act signed by President Donald Trump.

It would also raise the standard deduction and protect Virginia taxpayers from some provisions of the new federal tax law.

Currently the legislation doesn't include an emergency clause allowing it to take effect immediately, meaning the law would take effect on July 1.

“This is a fiscally responsible approach to tax relief that will safeguard our state’s prestigious AAA bond rating and still ensure that there is sufficient revenue to make targeted investments in our core priorities,” said Senator Emmett W. Hanger, Jr. (R-Augusta), Co-Chairman of the Senate Finance Committee.