During the 1978 Session of the General Assembly, Senate Joint Resolution No. 21 was adopted requesting that the Senate and House Finance Committees study the structure of the Virginia individual income tax and present recommendations that would improve the inequities of the tax. (Appendix I.) Particular items designated in the resolution for study were the marriage penalty, the movement away from federal conformity, the increased use of credits at the federal level, the standard deduction and personal exemptions.

The chairman of the Senate Finance Committee appointed four members from his committee and the chairman of the House Finance Committee appointed four members from his committee, the eight members to compose a Joint Subcommittee for purposes of examining Senate Joint Resolution No. 21 and making recommendations respective thereto. The Joint Subcommittee elected Omer L. Hirst its chairman. The Division of Legislative Services served as staff. The Joint Subcommittee met numerous times in 1978 and 1979, and received information from its staff, various State agencies and professional interest groups.

Although the Joint Subcommittee has assimilated an abundant amount of material relating to inequities in the Virginia income tax structure, the Joint Subcommittee concluded that it was not yet in a posture to make a final recommendation on any of the topics being considered and that further study was needed. Therefore, the Joint Subcommittee recommended that an interim informational report be made to the 1979 General Assembly which would isolate and review tax inequities and possible approaches to the correction thereof. The Joint Subcommittee further recommends that the study be extended for an additional year to permit the members sufficient time to thoroughly discuss the issues and make prudent recommendations thereon. A copy of the proposed continuation resolution is included as Appendix II.