State Del. John Chilton McAuliff has introduced new legislation intended to assist small businesses by offering a state income tax credit to eligible new enterprises, as noted by the Virginia State House.
The measure, designated HB504, was filed on Jan. 14, 2026, for the 2026 regular session and formally titled: “Income tax, state; tax credit for certain small businesses.”
Here is a summary of the bill’s details, providing interpretation based on the official text to clarify its contents.
The bill establishes a one-time, nonrefundable $2,500 state income tax credit for certain small businesses in retail trade or accommodation and food services. Eligible recipients must start operations and secure a location in a recognized Virginia Main Street Community within the tax year. The tax credit applies to tax years from Jan. 1, 2026, through Dec. 31, 2030, is nonrefundable, and can be carried forward up to five years if it exceeds the taxpayer’s income tax liability. Total credits are capped at $5 million per year, distributed on a first-come, first-served basis, and the Tax Commissioner is instructed to provide implementation guidance outside the Administrative Process Act.
Rep. John Chilton McAuliff (Democrat-30th District) is the bill’s sole sponsor.
Since the current session began, McAuliff has also brought forward eight additional bills.
McAuliff earned his degree from the University of Richmond in 2014.
McAuliff, a Democrat, secured election to the Virginia State House in 2026, representing the state’s 30th House District and succeeding Geary Higgins.
In Virginia, the bill process starts with a proposal in the House of Delegates or the Senate, assignment to relevant committees for review and possible changes, and then moves to full chamber debate and voting. Approval in both chambers sends the legislation to the governor, who can sign, veto or let the measure become law without a signature. Each year, the Virginia General Assembly starts its regular session on the second Monday in January, with lawmakers introducing hundreds of bills, although not all are enacted.
| Patron(s) | Bill Number | Date Introduced | Short Description |
|---|---|---|---|
| John Chilton McAuliff | HB504 | 01/14/2026 | Income tax, state; tax credit for certain small businesses. |
| John Chilton McAuliff, Alfonso H. Lopez, David A. Reid, JJ Singh, Russet Perry, Atoosa R. Reaser, Gretchen M Bulova, Kannan Srinivasan, and Marty Martinez | HB500 | 01/14/2026 | New state park; Dept. of Conservation & Recreation to acquire prop. to establish in Loudoun County. |
| John Chilton McAuliff, Gretchen M Bulova, and JJ Singh | HB503 | 01/14/2026 | Electric utilities; cost recovery, costs substantially related to serving data center customers. |
| John Chilton McAuliff | HB505 | 01/14/2026 | Counties, cities, & towns; members of governing body, continuing personal interest in transactions. |
| John Chilton McAuliff, JJ Singh, Joshua E. Thomas, and Shelly A. Simonds | HB507 | 01/14/2026 | Data centers; permit requirements, emission limits for certain engine-generator sets. |
| John Chilton McAuliff, Amy J. Laufer, Irene Shin, Richard C. “Rip” Sullivan, Jr., Betsy B. Carr, Briana D. Sewell, Dan I. Helmer, Destiny LeVere Bolling, Elizabeth B. Bennett-Parker, JJ Singh, Karen Keys-Gamarra, Kathy K.L. Tran, Katrina Callsen, Nicole Cole, Rae Cousins, and Wren M. Williams | HB508 | 01/14/2026 | Small renewable energy projects; agrivoltaics definition. |
| John Chilton McAuliff | HB509 | 01/14/2026 | Zoning; agricultural operations, rental of accessory dwellings. |
| John Chilton McAuliff | HB510 | 01/14/2026 | Uniform Power of Attorney Act; agent’s duty of disclosure, execution of initial power of attorney. |
| John Chilton McAuliff, Jackie H. Glass, Karen R. “Kacey” Carnegie, and Virgil Thornton | HB693 | 01/14/2026 | Workforce development programs; apprenticeship program. |
