Like most states, Virginia uses tax preferences to achieve specific
policy goals. Because tax preferences are not subject to the State
budgetary process, they often remain in effect, sometimes indefinitely, without any evaluation of their effectiveness. Little information is available about tax preferences, including which ones should be continued because they are effective, and which ones could be revised to improve their effectiveness or eliminated altogether.

In response to these concerns, the 2010 General Assembly passed Senate Joint Resolution (SJR) 21, which directs the Joint Legislative Audit and Review Commission (JLARC) to study the effectiveness of Virginia tax preferences. In particular, the mandate requests that JLARC examine the use and fiscal impact of Virginia tax preferences, specific public policy goals for which they were established, and the extent to which these goals are achieved. Further, the mandate directs JLARC to propose mechanisms or processes for an ongoing evaluation of the effectiveness of Virginia tax preferences.