An Act to amend and reenact § 58.1-202.3 of the Code of Virginia and to repeal Chapter 535 of the Acts of Assembly of 2010, relating to Department of Taxation; free tax filing program for individuals.
HB1180 revises Virginia’s tax-filing framework by updating the existing fillable-forms statute and replacing the state’s current free filing arrangement with a new, state-run electronic filing service for individual taxpayers. The bill keeps the requirement that the Department of Taxation provide fillable state tax forms in PDF format on its website and clarifies that those forms do not replace or compete with the Virginia Free File program. It then repeals the 2010 law that created the prior Virginia Free File program based on the IRS Free File model.
The bill directs the Tax Commissioner to develop and offer a modern, no-cost electronic tax return filing program directly to Virginia individual taxpayers beginning with taxable years starting on or after January 1, 2028. In doing so, the commissioner must consider compatibility, security, and integration with the IRS Direct File source code as it existed during the 2025 filing season, consult with other states that have recently created similar free filing systems, and set eligibility rules that are less restrictive than the IRS Direct File program’s 2025 criteria. The program must also be updated as needed to remain compatible with any federal free direct e-file system.
HB1180 changes state tax administration law by repealing Chapter 535 of the Acts of Assembly of 2010 and replacing the prior Virginia Free File structure with a new statutory mandate for a state-developed, free direct e-filing service for individual taxpayers. It preserves the Department of Taxation’s obligation to provide fillable forms online, but adds a new long-term requirement for the Tax Commissioner to build and maintain a modern electronic filing platform for taxable years beginning in 2028. The bill affects the Department of Taxation, the Tax Commissioner, and Virginia individual taxpayers who may use the new no-cost filing system.
The available record suggests generally favorable sentiment toward simplifying tax filing and expanding free access to electronic filing services. The bill was enacted as Chapter 31, indicating it ultimately received sufficient support to pass. No committee transcript or vote detail is provided, so there is no direct evidence of floor debate, but the structure of the bill suggests a policy preference for a more accessible, state-operated filing option.
The main policy issue embedded in the bill is the shift away from the existing Virginia Free File program toward a new state-run direct filing system. Potential points of contention include the cost and administrative burden of building and maintaining a modern filing platform, the requirement to consider IRS Direct File source code and federal compatibility, and the decision to make eligibility criteria less restrictive than the federal program. Another possible point of debate is whether the state should operate its own filing service at all, rather than relying on private-sector or IRS-based free filing arrangements.