by Jonathan A. Nelson
New statutes in Virginia take effect on July 1 of each year, unless the legislature sets a different date. Among the updates this year is a limitation on local tax collection of wages.
Federal statute (15 U.S.C. § 1672) defines a garnishment as any legal or equitable procedure through which earnings are withheld for payment of a debt, and the next section (§ 1673) limits most garnishments to about 25% of wages, but exempts from this restriction collection of taxes due under state law. Virginia’s equivalent statute (Va. Code § 34-29) similarly defines garnishment and has the same exemption for tax collections.
The mechanism by which a local government treasurer can collect unpaid tax debts is set out in Va. Code § 58.1-3952. The General Assembly amended this section, effective July 1, 2026, in H.B. 1100. The revised version sets out limits for local treasurers’ liens on wages like in the current garnishment statute, more or less 25%.
At least one local jurisdiction is trying to beat the July 1 deadline and sending lien notices to employers. They incorrectly state this is not a garnishment, and wholly omit that this only applies to wages owed on or before June 30, 2026. An employer who withholds more than is allowable after that date is exposed to liability under federal and state law for failing to pay wages when due and potentially for minimum wage violations. If you receive such a notice and have any questions, please contact this office or your corporate counsel.
Virginia attorney Jonathan A. Nelson practices in estate planning, probate, trust administration, business formation, and estate and trust litigation, and brings nearly 20 years of experience resolving conflicts, negotiating settlements, vigorously advocating in the courtroom, and navigating compliance matters. He uses a personal touch and extensive legal knowledge to ensure that the particular needs and interests of each client are reflected in the legal services they receive.
The attorneys of Smith Pugh & Nelson, PLC, offer the experienced counsel, personal attention, and customized legal services needed to address the many complex issues surrounding estate planning, probate, and trust administration. Contact us at (703) 777-6084 to schedule a consultation.