VA HB378

Imposes a new 3.8% net investment income tax on Virginia taxpayers beginning January 1, 2027, in addition to existing state taxes

Applies to the lesser of net investment income or federal modified adjusted gross income exceeding $500,000

Covers individuals, estates, and trusts subject to Virginia income tax, with proration for part-year residents based on Virginia-allocable investment income

Defines net investment income consistent with federal IRC Section 1411 but includes gains from qualified small business stock (Section 1202) and opportunity zone investments (Section 1400Z-2)

Specifically includes income from incomplete gift non-grantor trusts to prevent use of such trusts as tax avoidance vehicles