TAX CREDITS

Major Business Facility Job Tax Credit:  Businesses that expand in or relocate to Virginia may qualify for an income tax credit equal to $1,000 for each new job created above a threshold number of 50 jobs.  A company that is located in an enterprise zone or another economically distressed area is subject to a lower threshold of 25 new jobs.  To qualify for the credit, a business must exceed the job creation threshold of 50 jobs (25 jobs in targeted areas) within a 12-month period. The credit is taken in equal installments over 2 years.  Credits are non-refundable and non-transferable; however unused credits may be carried forward for up to 10 years.

Refundable Research and Development Expenses Tax Credit:  This program provides an as-of-right corporate income tax credit equal to 15% of the first $234,000 in Virginia qualified R&D expenditures.  If the qualified R&D was conducted in partnership with a Virginia college or university, the tax credit is increased to 20% of the first $234,000 in expenditures.  If the amount of credit that a business is entitled to claim exceeds its Virginia tax liability, the amount that exceeds the tax liability will be refunded to the company.  

SPECIAL ZONING

Enterprise Zone Job Creation Grants:  Qualified businesses that locate or expand in one of 57 Enterprise Zones may receive a cash grant if certain wage levels are met.  An annual grant of up to $800 per job may be provided for up to 5 years.  

Enterprise Zone Real Property Investment Grant: Businesses that make a qualified investment in an enterprise zone facility are eligible for a cash grant based on the excess above the minimum required investment ($100,000 to $500,000 depending on zone location).

GRANTS

Commonwealth’s Opportunity Fund (COF):  Discretionary “deal closing fund” incentive available to the Governor to secure a business location or expansion project for Virginia. Grants are awarded to localities on a local matching basis.

Virginia Investment Partnership Grant (VIP):  This performance-based grant is designed to encourage continued capital investment by manufacturers that have had business operations in Virginia for at least 3 years.  To qualify, a company must invest at least $25 million while at least maintaining stable employment levels.  The grant is disbursed 5 equal installments.

Major Eligible Employer Grant (MEE):  This discretionary performance incentive grant, designed to encourage significant capital investment and job creation, is available for companies that make a capital investment of at least $100 million and create at least 1,000 new jobs (a minimum of 400 jobs if the average pay is at least twice the area’s prevailing average wage).  The grant is disbursed in 5 equal installments.

Virginia Economic Development Incentive Grant (VEDIG):   This discretionary grant is available to businesses that meet one of the following criteria:  

  • Locate in a metropolitan area with at least 300,000 residents and create at least 400 new full-time jobs with average salaries that are at least 1.5 times the average local prevailing wage or create 300 new full-time jobs with average salaries that are at least 2.0 times the average local prevailing wage;
  • Locate in a metropolitan area with at least 300,000 residents and make a capital investment of at least $5 million or $6,500 per job, whichever is greater;
  • Locate elsewhere in Virginia and create at least 200 new full-time jobs with average salaries at least 1.5 times the average local prevailing wage
  • Locate elsewhere in Virginia and make a capital investment of at least $6,500 per job
JOB TRAINING

Worker Retraining Tax Credit:  Businesses are eligible to receive an income tax credit equal to 30% of employer expenditures made for worker retraining.  If courses are given at a private institution, the credit is equal to the cost per qualified employee, up to $200 annually, or $300 annually if the retraining is in a science, technology, engineering and math (STEM) or science, technology, engineering, arts, and mathematics (STEAM) discipline. 

Virginia New Jobs Program:  Businesses that create a minimum of 25 new jobs with a wage at least 1.35 times the federal minimum wage and an investment of at least $1,000,000 may be eligible to receive cash reimbursement for training new hires.

TAX EXEMPTIONS 

Sales & Use Tax Exemptions: All machinery, replacement parts, and materials used directly in the manufacturing process are exempt from sales tax.  Other items exempt from sales tax include purchases used directly and exclusively in research and development; semiconductor clean rooms and related equipment; and computer equipment associated with data centers.

 

Last updated: April 2016

 

 


 
BIGGINS LACY SHAPIRO & COMPANY
PRINCETON
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Princeton, NJ 08542
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