09.15.15 |
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VA’s Major Business Facility Job Credit Creates Opportunities for Area Businesses

US Virginia quarter dollar

The Commonwealth of is known for being a pro-business state. In the last ten years, manufacturing companies have invested more than $16 billion dollars and created over 70,000 new jobs, according to the Virginia Economic Development Partnership.1 Over $8 billion in investments have poured into the state from international companies during that same period.2

 The state’s pro-business environment is reflected in the wide range of incentives it offers to businesses as they try to grow and expand their services. The available incentives include financial assistance, infrastructure development grants, tax credits and exemptions, customized training and technical support programs.3

One of the tax credits offered is the Virginia Major Business Facility Job Credit, which is available to any business in the state other than retail establishments.  To be eligible to receive the credit, the taxpayer needs to create “new full time jobs in excess of the threshold amounts established for one of the two credit tiers.”4 The thresholds are outlined as follows:

  • Tier 1: “The qualifying threshold amount for Tier 1 is 100 new jobs for the establishment or expansion of a major business facility in Virginia. Please note that for taxpayers whose expansion year begins on or after January 1, 2010 the threshold has been reduced to 50 new jobs.” 5
  • Tier 2: “The qualifying threshold amount for Tier 2 is 50 new jobs for the establishment or expansion of a major business facility in a locality identified by the Virginia Economic Development Partnership as an economically distressed area or has been designated as an enterprise zone.. Please note that for taxpayers whose expansion year begins on or after January 1, 2010 the threshold has been reduced to 25 new jobs.”6

According to the 2014-2015 Virginia Guide to Business Incentives, “the $1,000 per job credit is available for all qualifying jobs in excess of the threshold and is taken in equal installments over three years ($333 per year).”7 Unused credits may be carried forward for 10 years.8

The credit may not exceed the company’s tax liability and Virginia taxpayers may only qualify for and claim a credit for one tier per facility.9 Furthermore, if employment decreases during the five years following the initial credit year then the credits will be recaptured proportionately.10

Businesses locating or expanding in an Enterprise Zone may claim both an Enterprise Zone Grant and a Major Business Facility Job Tax Credit, however, the grant and tax credit cannot be earned or claimed for the same job.11 In addition, the rules stipulate that the “taxpayer cannot claim the Major Business Facility Job Tax Credit with the Coalfield Employment Enhancement Tax Credit, the Clean Fuel Vehicle and Advanced Cellulosic Biofuels Job Credit or the Green Job Creation Tax Credit.”12

 

Filing requirements and the application form are available through the Virginia Department of Taxation’s Tax Credit Unit.

 

Learn More About ADP SmartCompliance® Tax Credits
 


 

1, 2Major Companies Consider Virginia the Ideal Location, Pro-Business Climate: Virginia is the Best State for Business – http://www.yesvirginia.org/ProBusiness

3Business Incentives: Investing in Each Other – http://www.yesvirginia.org/ProBusiness/BusinessIncentives

4, 5, 6, 8, 9, 10, 11, 12Tax Credits –Virginia Department of Taxation – http://www.tax.virginia.gov/content/tax-credits

7Virginia Guide to Incentives 2014-2015 – http://www.yesvirginia.org/Content/pdf/Library/2014-2015%20Guide%20to%20Incentives.pdf

 

 

 


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