Michael Feggans Veteran Tax Relief Bill Stalls in House Appropriations

RICHMOND, Va. — A measure aimed at providing greater tax relief to military veterans and their families has met its end in the House Appropriations Committee during the 2026 Virginia General Assembly session. House Bill 137, introduced by Delegate Michael Feggans of Virginia Beach, sought to incrementally raise and eventually eliminate the $40,000 cap on military benefits that can be subtracted from an individual’s Virginia taxable income.

The legislation proposed a phased approach to expanding this subtraction. Beginning with taxable year 2028, the cap would increase to $60,000, followed by $80,000 in 2029, and full subtraction of all qualifying military benefits starting in 2030 and beyond. Qualifying benefits include military retirement income for service in the U.S. Armed Forces, certain qualified military benefits under federal tax code section 134, payments to surviving spouses under the Survivor Benefit Plan, and other military benefits paid to surviving spouses of veterans. This subtraction applies regardless of whether the taxpayer itemizes or takes the standard deduction, ensuring broad accessibility.

Virginia Beach, Feggans’ district, hosts significant naval installations, underscoring the bill’s relevance to communities with large veteran populations. Virginia consistently ranks among the top states for veteran residency, with hundreds of thousands of former service members calling the commonwealth home. Expanding tax subtractions on military benefits would directly benefit these individuals, many of whom rely on retirement pay as a primary income source post-service.

The bill garnered strong early momentum. Prefiled on January 4, 2026, and offered January 14, it was referred to the House Finance Committee. A fiscal impact statement from the Department of Taxation, issued January 18, projected negative General Fund revenue impacts escalating over time: $11.8 million for fiscal year 2027-28, $36.4 million in 2028-29, $57.2 million in 2029-30, $68.4 million in 2030-31, and $74.9 million in 2031-32. The department noted implementation as routine, requiring no additional funding or significant system changes.

In committee, HB137 advanced swiftly. On January 25, a subcommittee substitute was offered by H-FIN Subcommittee #1. The next day, January 26, the subcommittee recommended reporting with substitute and referral to Appropriations by a vote of 10-0. The full Finance Committee reported it out on January 28 by 18-0, reconsidered by voice vote, and then reported the committee substitute (26106178D-H1) by 22-0, sending it to Appropriations.

These unanimous votes highlighted the bill’s appeal across the aisle, reflecting widespread recognition of the need to support those who served. The committee substitutes refined the language, incorporating definitions and restrictions to prevent double-dipping with other subtractions or credits, such as those for Congressional Medal of Honor recipients.

Despite this support, the bill’s path ended abruptly. Referred to Appropriations on January 28 and further routed from Finance on January 29, it was left in committee on February 18 without a vote or further action. This outcome means the $40,000 cap remains in place for taxable year 2025 and beyond, unless adjusted otherwise.

Proponents argue that phasing out the cap honors commitments to military personnel, enabling Virginia to remain competitive in retaining veteran retirees who contribute economically through spending and property ownership. Military bases like Naval Station Norfolk, the world’s largest naval base, and others such as Quantico Marine Corps Base generate billions in economic activity annually, with retirees forming a stable part of that ecosystem.

The failure in Appropriations comes amid broader budget deliberations, where revenue considerations play a central role. Yet the bill’s targeted nature—benefiting only those with military benefits—in contrast to broad tax cuts, positions it as a precise way to reward service without widespread fiscal disruption. The Department of Taxation’s assurance of minimal administrative burden further bolsters its practicality.

As the session progresses, advocates for veterans may seek alternatives or reintroduction in future years. For now, HB137 joins dozens of measures left in committee, underscoring the rigorous scrutiny applied to tax policy changes. Virginia’s veterans continue to advocate for relief that matches their sacrifices, with this bill representing a concrete step toward that goal that found favor early but faltered at the budgetary hurdle.

The legislation’s journey illustrates the balance lawmakers strike between honoring service members and managing state finances. With projected losses peaking near $75 million annually by 2031-32, the Appropriations Committee’s decision reflects caution in an era of uncertain economic forecasts. Nonetheless, the unanimous Finance votes signal that expanding military tax relief enjoys significant legislative backing, potentially paving the way for renewed efforts.

Email the House of Delegates at:
Jessica Anderson: DelJAnderson@house.virginia.gov,
Bonita Anthony: DelBAnthony@house.virginia.gov,
Alex Askew: DelAAskew@house.virginia.gov,
Terry Austin: DelTAustin@house.virginia.gov,
Jason Ballard: DelJBallard@house.virginia.gov,
Robert Bloxom, Jr.: DelRBloxom@house.virginia.gov,
Gretchen Bulova: DelGBulova@house.virginia.gov,
Katrina Callsen: DelKCallsen@house.virginia.gov,
Karen Carnegie: DelKCarnegie@house.virginia.gov,
Betsy Carr: DelBCarr@house.virginia.gov,
Stacey Carroll: DelSCarroll@house.virginia.gov,
Mike Cherry: DelMCherry@house.virginia.gov,
Nadarius Clark: DelNClark@house.virginia.gov,
Laura Cohen: DelLJCohen@house.virginia.gov,
Joshua Cole: DelJCole@house.virginia.gov,
Nicole Cole: DelNCole@house.virginia.gov,
Kelly Convirs-Fowler: DelKConvirs-Fowler@house.virginia.gov,
Mitchell Cornett: DelMCornett@house.virginia.gov,
Rae Cousins: DelRCousins@house.virginia.gov,
Will Davis: DelWDavis@house.virginia.gov,
Karrie Delaney: DelKDelaney@house.virginia.gov,
Lindsey Dougherty: DelLDougherty@house.virginia.gov,
Mark Downey: DelMDowney@house.virginia.gov,
Michael Feggans: DelMFeggans@house.virginia.gov,
Hyland Fowler, Jr.: DelBFowler@house.virginia.gov,
Lily Franklin: DelLFranklin@house.virginia.gov,
Margaret Franklin: DelMFranklin@house.virginia.gov,
Debra Gardner: DelDGardner@house.virginia.gov,
Thomas Garrett, Jr.: DelTGarrett@house.virginia.gov,
Jackie Glass: DelJGlass@house.virginia.gov,
Timothy Griffin: DelTGriffin@house.virginia.gov,
Elizabeth Guzman: DelEGuzman@house.virginia.gov,
Karen Hamilton: DelKHamilton@house.virginia.gov,
Cliff Hayes, Jr.: DelCHayes@house.virginia.gov,
Dan Helmer: DelDHelmer@house.virginia.gov,
Rozia Henson, Jr.: DelRHenson@house.virginia.gov,
Phil Hernandez: DelPHernandez@house.virginia.gov,
Charniele Herring: DelCHerring@house.virginia.gov,
Keith Hodges: DelKHodges@house.virginia.gov,
Patrick Hope: DelPHope@house.virginia.gov,
Hillary Kent: DelHKent@house.virginia.gov,
Karen Keys-Gamarra: DelKKeys-Gamarra@house.virginia.gov,
Terry Kilgore: DelTKilgore@house.virginia.gov,
Paul Krizek: DelPKrizek@house.virginia.gov,
Amy Laufer: DelALaufer@house.virginia.gov,
Destiny LeVere Bolling: DelDLeVereBolling@house.virginia.gov,
Jay Leftwich, Jr.: DelJLeftwich@house.virginia.gov,
Alfonso Lopez: DelALopez@house.virginia.gov,
Fernando Martinez: DelMMartinez@house.virginia.gov,
John McAuliff: DelJMcAuliff@house.virginia.gov,
Adele McClure: DelAMcClure@house.virginia.gov,
Garrett McGuire: DelGMcGuire@house.virginia.gov,
Ellen McLaughlin: DelEMcLaughlin@house.virginia.gov,
Joseph McNamara: DelJMcNamara@house.virginia.gov,
Kirk McPike: DelKMcPike@house.virginia.gov,
Delores McQuinn: DelDMcQuinn@house.virginia.gov,
Leslie Mehta: DelLMehta@house.virginia.gov,
Will Morefield: DelJMorefield@house.virginia.gov,
May Nivar: DelMNivar@house.virginia.gov,
Israel O’Quinn: DeliOquinn@house.virginia.gov,
Delores Oates: DelDOates@house.virginia.gov,
Justin Pence: DelJPence@house.virginia.gov,
Eric Phillips: DelEPhillips@house.virginia.gov,
Kimberly Pope Adams: DelKPopeAdams@house.virginia.gov,
Cia Price: DelMPrice@house.virginia.gov,
Sam Rasoul: DelSRasoul@house.virginia.gov,
Atoosa Reaser: DelAReaser@house.virginia.gov,
David Reid: DelDReid@house.virginia.gov,
Andrew Rice: DelARice@house.virginia.gov,
Chris Runion: DelCRunion@house.virginia.gov,
Charles Schmidt, Jr.: DelCSchmidt@house.virginia.gov,
Don Scott: DelDScott@house.virginia.gov,
Phillip Scott: DelPScott@house.virginia.gov,
Holly Seibold: DelHSeibold@house.virginia.gov,
Briana Sewell: DelBSewell@house.virginia.gov,
Irene Shin: DelIShin@house.virginia.gov,
Marcus Simon: DelMSimon@house.virginia.gov,
Shelly Simonds: DelSSimonds@house.virginia.gov,
JJ Singh: DelJSingh@house.virginia.gov,
Rip Sullivan, Jr.: DelRSullivan@house.virginia.gov,
Anne Tata: DelAFTata@house.virginia.gov,
Josh Thomas: DelJThomas@house.virginia.gov,
Virgil Thornton, Sr.: DelVThornton@house.virginia.gov,
Luke Torian: DelLTorian@house.virginia.gov,
Kathy Tran: DelKTran@house.virginia.gov,
Howard Wachsmann, Jr.: DelOWachsmann@house.virginia.gov,
Wendell Walker: DelWWalker@house.virginia.gov,
Jeion Ward: DelJWard@house.virginia.gov,
Lee Ware: DelLWare@house.virginia.gov,
Vivian Watts: DelVWatts@house.virginia.gov,
Michael Webert: DelMWebert@house.virginia.gov,
Madison Whittle: DelMWhittle@house.virginia.gov,
Bill Wiley: DelBWiley@house.virginia.gov,
Rodney Willett: DelRWillett@house.virginia.gov,
Wren Williams: DelWWilliams@house.virginia.gov,
Tony Wilt: DelTWilt@house.virginia.gov,
Thomas Wright, Jr.: DelTWright@house.virginia.gov,
Scott Wyatt: DelSWyatt@house.virginia.gov,
Eric Zehr: DelEZehr@house.virginia.gov,

Email the Norfolk City Council:
Kenneth Alexander, mayor@norfolk.gov,
Martin Thomas, martin.thomas@norfolk.gov,
Courtney Doyle, courtney.doyle@norfolk.gov,
Mamie Johnson, mamie.johnson@norfolk.gov,
John Paige, john.paige@norfolk.gov,
Thomas Smigiel, thomas.smigiel@norfolk.gov,
Jeremy McGee, jeremy.mcgee@norfolk.gov,
Carlos Clanton, carlos.clanton@norfolk.gov,

Email the Norfolk School Board:
Tiffany Moore-Buffaloe, tiffany.buffaloe@nps.k12.va.us,
Sarah DiCalogero, sarah.dicalogero@nps.k12.va.us,
Tanya Bhasin, tbhasin@nps.k12.va.us,
Adale Martin, amartin@nps.k12.va.us,
Kenneth Paulson, ken.paulson@nps.k12.va.us,
Jodi Slaughter, jodi.slaughter@nps.k12.va.us,
Alfreda Thomas, alfreda.thomas@nps.k12.va.us,

Email the Richmond City Council:
Andrew Breton, andrew.breton@rva.gov,
Katherine Jordan, katherine.jordan@rva.gov,
Kenya Gibson, kenya.gibson@rva.gov,
Sarah Abubaker, sarah.abubaker@rva.gov,
Stephanie Lynch, stephanie.lynch@rva.gov,
Ellen Robertson, ellen.robertson@rva.gov,
Cynthia Newbille, cynthia.newbille@rva.gov,
Reva Trammell, reva.trammell@rva.gov,
Nicole Jones, nicole.jones@rva.gov,

Email the Richmond School Board:
Matthew Percival, mpercival@rvaschools.net,
Kathryn Ricard, kricard@rvaschools.net,
Ali Faruk, afaruk@rvaschools.net,
Wesley Hedgepeth, whedgepeth@rvaschools.net,
Stephanie Rizzi, srizzi@rvaschools.net,
Anne Holton, aholton@rvaschools.net,
Cheryl Burke, cburke2@rvaschools.net,
Emmett Jafari, ejafari@rvaschools.net,
Shavonda Fernandez, sdixon@rvaschools.net,

Virginia Beach City Council:
Robert Dyer, mayorsoffice@vbgov.com,
Michael Berlucchi, mberlucc@vbgov.com,
Stacy Cummings, stcummings@vbgov.com,
Barbara Henley, bhenley@vbgov.com,
David Hutcheson, dhutcheson@vbgov.com,
Cal Jackson-Green, cjacksongreen@vbgov.com,
Robert Remick, wremick@vbgov.com,
Amelia Ross-Hammond, arosshammond@vbgov.com,
Jennifer Rouse, jvrouse@vbgov.com,
Joashua Schulman, jschulman@vbgov.com,
Rosemary Wilson, rcwilson@vbgov.com,
Group email: CityCouncil@vbgov.com,

Virginia Beach School Board:
Kathleen Brown, Kathleen.Brown@vbcpsboard.com,
Carolyn Weems, Carolyn.Weems@vbcpsboard.com,
Mark Bohenstiel, Mark.Bohenstiel@vbcpsboard.com,
Michael Callan, Michael.Callan@vbcpsboard.com,
David Culpepper, David.Culpepper@vbcpsboard.com,
Matt Cummings, Matt.Cummings@vbcpsboard.com,
Rose Dwyer, Rose.Dwyer@vbcpsboard.com,
Sharon Felton, Sharon.Felton@vbcpsboard.com,
Alveta Green, Alveta.Green@vbcpsboard.com,
Kimberly Melnyk, Kimberly.Melnyk@vbcpsboard.com,
Melinda Rogers, Melinda.Rogers@vbcpsboard.com,
Group email: SchoolBoard@vbcpsboard.com,