VA Small Business Recovery Plan



NFIB’s Virginia Small Business Recovery Plan laid out four legislative principles to help ensure that the commonwealth’s small businesses continue to have the resources they need to move forward during this recovery.

NFIB’s plan included recommendations that will help the commonwealth’s smallest businesses by providing tax relief, providing regulatory relief, targeting financial assistance, and reforming unemployment insurance.

Governor Youngkin and legislators agreed on many of the most important issues, including full funding of Virginia’s unemployment insurance program which had been virtually depleted by the sharp increase in claims caused by the COVID-19 pandemic.

However, our members are disappointed that several key provisions were left on the table, including the suspension of Virginia’s fuel tax to help small businesses cope with rising costs across the board.


Provide tax relief for small businesses so they can recover faster, keep and hire employees, and bolster their communities. Recommendations included:

  • Continuing to exempt Paycheck Protection Program (PPP), Rebuild Virginia and other COVID-19 related loans from taxation. Extend the exemption from taxable year 2020 to taxable year 2021 as well as removing the cap of $100,000 in deductibility of business expenses so all loan proceeds used for qualifying business expenses are deductible
  • Increasing Virginia’s Standard Deduction to Federal Standard Deduction. Currently, Virginia small businesses, the majority of whom file individually, as well as working families are leaving money on the table when they claim the generous Federal Standard Deduction. Under a new law, the Virginia’s standard deduction for individuals increased from $4,500 to $8,000 for individuals and from $9,000 to $16,000 couples
  • Providing an Income Tax Holiday for Small Businesses. Jump start small business recovery with a one-time exemption of one’s first $250,000 in income from the state income tax
  • Approving a Gas Tax Holiday. Providing tax relief for small businesses by suspending the gas and diesel fuel tax amid the surging gas prices in the state

Repeal onerous regulations and mandates and when appropriate replace with reasonable policies; protect small businesses from additional regulatory requirements or expanding existing mandates. Recommendations included:

  • Repealing the permanent COVID-19 Workplace Safety Regulations with a more reasonable and temporary policy allowing businesses to comply with CDC guidelines
  • Freezing the minimum wage at its most recent level of $11 /per hour which begins January 1, 2022 and allow employers to include the total compensation such as health insurance benefits when calculating the hourly wage for an employee
  • Repealing changes made to Virginia’s Overtime Act which went beyond federal law such as not including all the exemptions and calculating overtime differently which has created confusion for employers on which to follow
  • Repealing the requirement of Project Labor Agreements on state and local construction projects
  • Approving the sale of paid family leave insurance policies in Virginia so businesses or individuals may purchase financial security
  • Opposing efforts to institute a complicated and burdensome 12-week paid family medical leave benefit program
  • Opposing efforts to require a determined amount of paid sick days

Target near-term and longer-term financial assistance programs for the small business with continuing financial needs, and address rising healthcare and energy costs. Recommendations included:

  • Allowing small businesses that continue to suffer clear economic losses due to COVID-19 to apply for a second Rebuild Virginia loan
  • Ensuring the current backlog of applicants is handled in a quick and efficient manner
  • Approving the creation of Association of Health Plans for small business groups to pool together their member employees into one health plan to reduce health insurance premiums
  • Removing Virginia from the Regional Greenhouse Gas Initiative
  • Repealing the Virginia Clean Energy Act which mandates 100% carbon-free power in the Commonwealth by 2045 for Dominion Energy and 2050 for Appalachian Power

Reform unemployment insurance and the agency’s processes so small businesses are not faced with higher payroll taxes and can quickly fill open positions and get the economy growing again. Recommendations included:

  • Replenishing the unemployment trust fund with unused Federal relief money to shield small businesses from significant payroll tax increases
  • Ensuring small businesses are not held liable for fraudulent payments or overpayments in benefits made by the Virginia Employment Commission which would increase the taxes small businesses pay
  • Opposing efforts to increase IU benefits beyond current levels



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