A. For taxable years beginning on or after July 1, 2011, the Virginia taxableincome of a manufacturing company, excluding income allocable under §58.1-407, may be apportioned within and without the Commonwealth as providedin § 58.1-408 or as follows:
1. From July 1, 2011, until July 1, 2013, by multiplying such income by afraction, the numerator of which is the property factor plus the payrollfactor plus triple the sales factor and the denominator of which is five,except when the sales factor does not exist, the denominator of the fractionshall be the number of existing factors, and when the sales factor exists butthe payroll factor or property factor does not exist, the denominator of thefraction shall be the number of existing factors plus two;
2. From July 1, 2013, until July 1, 2014, by multiplying such income by afraction, the numerator of which is the property factor plus the payrollfactor plus quadruple the sales factor and the denominator of which is six,except when the sales factor does not exist, the denominator of the fractionshall be the number of existing factors, and when the sales factor exists butthe payroll factor or property factor does not exist, the denominator of thefraction shall be the number of existing factors plus three; and
3. From July 1, 2014, and thereafter, by multiplying such income by the salesfactor.
B. If the taxpayer makes one or more of the elections described insubdivision A 1, A 2, or A 3, the taxpayer may not revoke the election for aperiod of three taxable years.
In addition, the taxpayer shall certify to the Department that the averageweekly wage of its full-time employees is greater than the lower of the stateor local average weekly wages for the taxpayer's industry.
C. If the average annual number of full-time employees of a manufacturingcompany for the first three taxable years (in which the manufacturing companyused the alternative apportionment set forth in this section) is less thanthe base year employment, then the Department of Taxation shall assess themanufacturing company with additional taxes pursuant to this article computedas the difference between (i) the taxes that would have been due under theapportionment formula provided under § 58.1-408 for such three taxable years,minus (ii) the taxes due under the alternative apportionment provided underthis section for such three taxable years. In addition to such additionaltaxes, the Department shall assess the manufacturing company a penalty of 10percent of the amount of such additional taxes. Interest shall accrue andshall be assessed on such additional taxes at the rate prescribed under §58.1-15, with such interest accruing from the original due date for filing ofthe income tax return to the date of payment of such additional taxes.
Such additional taxes, penalty, and interest are hereby imposed onmanufacturing companies using the alternative apportionment set forth in thissection.
D. As used in this section, unless the context clearly shows otherwise, theterm or phrase:
"Base year employment" means the average number of full-time employeesemployed by the manufacturing company in the Commonwealth in the taxable yearthat ended immediately prior to the first taxable year in which themanufacturing company used the alternative apportionment set forth in thissection.
"Full-time employee" means an employee of a manufacturing company who isemployed for an indefinite duration in the Commonwealth for which thestandard fringe benefits are paid by the manufacturing company, for whichemployment requires a minimum of either (i) 35 hours of an employee's timeper week for the entire normal year of such manufacturing company'soperations, which "normal year" shall consist of at least 48 weeks, or (ii)1,680 hours per year.
"Manufacturing company" means a domestic or foreign corporation primarilyengaged in activities that, in accordance with the North American IndustrialClassification System (NAICS), United States Manual, United States Office ofManagement and Budget, 1997 Edition, would be included in Sector 11, 31, 32,or 33.
E. The General Assembly of Virginia finds that job creation is essential tothe continued fiscal health of the Commonwealth. In this modern economy,states often compete for quality manufacturing jobs. Accordingly, theprovisions of this section relating to manufacturing companies that increasetheir employment in Virginia are integral to the purpose of the electionallowed pursuant to this section. If any provision of this section is for anyreason held to be invalid or unconstitutional by the decision of a court ofcompetent jurisdiction, that provision shall not be deemed severable.
A. For taxable years beginning on or after July 1, 2011, the Virginia taxableincome of a manufacturing company, excluding income allocable under §58.1-407, may be apportioned within and without the Commonwealth as providedin § 58.1-408 or as follows:
1. From July 1, 2011, until July 1, 2013, by multiplying such income by afraction, the numerator of which is the property factor plus the payrollfactor plus triple the sales factor and the denominator of which is five,except when the sales factor does not exist, the denominator of the fractionshall be the number of existing factors, and when the sales factor exists butthe payroll factor or property factor does not exist, the denominator of thefraction shall be the number of existing factors plus two;
2. From July 1, 2013, until July 1, 2014, by multiplying such income by afraction, the numerator of which is the property factor plus the payrollfactor plus quadruple the sales factor and the denominator of which is six,except when the sales factor does not exist, the denominator of the fractionshall be the number of existing factors, and when the sales factor exists butthe payroll factor or property factor does not exist, the denominator of thefraction shall be the number of existing factors plus three; and
3. From July 1, 2014, and thereafter, by multiplying such income by the salesfactor.
B. If the taxpayer makes one or more of the elections described insubdivision A 1, A 2, or A 3, the taxpayer may not revoke the election for aperiod of three taxable years.
In addition, the taxpayer shall certify to the Department that the averageweekly wage of its full-time employees is greater than the lower of the stateor local average weekly wages for the taxpayer's industry.
C. If the average annual number of full-time employees of a manufacturingcompany for the first three taxable years (in which the manufacturing companyused the alternative apportionment set forth in this section) is less thanthe base year employment, then the Department of Taxation shall assess themanufacturing company with additional taxes pursuant to this article computedas the difference between (i) the taxes that would have been due under theapportionment formula provided under § 58.1-408 for such three taxable years,minus (ii) the taxes due under the alternative apportionment provided underthis section for such three taxable years. In addition to such additionaltaxes, the Department shall assess the manufacturing company a penalty of 10percent of the amount of such additional taxes. Interest shall accrue andshall be assessed on such additional taxes at the rate prescribed under §58.1-15, with such interest accruing from the original due date for filing ofthe income tax return to the date of payment of such additional taxes.
Such additional taxes, penalty, and interest are hereby imposed onmanufacturing companies using the alternative apportionment set forth in thissection.
D. As used in this section, unless the context clearly shows otherwise, theterm or phrase:
"Base year employment" means the average number of full-time employeesemployed by the manufacturing company in the Commonwealth in the taxable yearthat ended immediately prior to the first taxable year in which themanufacturing company used the alternative apportionment set forth in thissection.
"Full-time employee" means an employee of a manufacturing company who isemployed for an indefinite duration in the Commonwealth for which thestandard fringe benefits are paid by the manufacturing company, for whichemployment requires a minimum of either (i) 35 hours of an employee's timeper week for the entire normal year of such manufacturing company'soperations, which "normal year" shall consist of at least 48 weeks, or (ii)1,680 hours per year.
"Manufacturing company" means a domestic or foreign corporation primarilyengaged in activities that, in accordance with the North American IndustrialClassification System (NAICS), United States Manual, United States Office ofManagement and Budget, 1997 Edition, would be included in Sector 11, 31, 32,or 33.
E. The General Assembly of Virginia finds that job creation is essential tothe continued fiscal health of the Commonwealth. In this modern economy,states often compete for quality manufacturing jobs. Accordingly, theprovisions of this section relating to manufacturing companies that increasetheir employment in Virginia are integral to the purpose of the electionallowed pursuant to this section. If any provision of this section is for anyreason held to be invalid or unconstitutional by the decision of a court ofcompetent jurisdiction, that provision shall not be deemed severable.
A. For taxable years beginning on or after July 1, 2011, the Virginia taxableincome of a manufacturing company, excluding income allocable under §58.1-407, may be apportioned within and without the Commonwealth as providedin § 58.1-408 or as follows:
1. From July 1, 2011, until July 1, 2013, by multiplying such income by afraction, the numerator of which is the property factor plus the payrollfactor plus triple the sales factor and the denominator of which is five,except when the sales factor does not exist, the denominator of the fractionshall be the number of existing factors, and when the sales factor exists butthe payroll factor or property factor does not exist, the denominator of thefraction shall be the number of existing factors plus two;
2. From July 1, 2013, until July 1, 2014, by multiplying such income by afraction, the numerator of which is the property factor plus the payrollfactor plus quadruple the sales factor and the denominator of which is six,except when the sales factor does not exist, the denominator of the fractionshall be the number of existing factors, and when the sales factor exists butthe payroll factor or property factor does not exist, the denominator of thefraction shall be the number of existing factors plus three; and
3. From July 1, 2014, and thereafter, by multiplying such income by the salesfactor.
B. If the taxpayer makes one or more of the elections described insubdivision A 1, A 2, or A 3, the taxpayer may not revoke the election for aperiod of three taxable years.
In addition, the taxpayer shall certify to the Department that the averageweekly wage of its full-time employees is greater than the lower of the stateor local average weekly wages for the taxpayer's industry.
C. If the average annual number of full-time employees of a manufacturingcompany for the first three taxable years (in which the manufacturing companyused the alternative apportionment set forth in this section) is less thanthe base year employment, then the Department of Taxation shall assess themanufacturing company with additional taxes pursuant to this article computedas the difference between (i) the taxes that would have been due under theapportionment formula provided under § 58.1-408 for such three taxable years,minus (ii) the taxes due under the alternative apportionment provided underthis section for such three taxable years. In addition to such additionaltaxes, the Department shall assess the manufacturing company a penalty of 10percent of the amount of such additional taxes. Interest shall accrue andshall be assessed on such additional taxes at the rate prescribed under §58.1-15, with such interest accruing from the original due date for filing ofthe income tax return to the date of payment of such additional taxes.
Such additional taxes, penalty, and interest are hereby imposed onmanufacturing companies using the alternative apportionment set forth in thissection.
D. As used in this section, unless the context clearly shows otherwise, theterm or phrase:
"Base year employment" means the average number of full-time employeesemployed by the manufacturing company in the Commonwealth in the taxable yearthat ended immediately prior to the first taxable year in which themanufacturing company used the alternative apportionment set forth in thissection.
"Full-time employee" means an employee of a manufacturing company who isemployed for an indefinite duration in the Commonwealth for which thestandard fringe benefits are paid by the manufacturing company, for whichemployment requires a minimum of either (i) 35 hours of an employee's timeper week for the entire normal year of such manufacturing company'soperations, which "normal year" shall consist of at least 48 weeks, or (ii)1,680 hours per year.
"Manufacturing company" means a domestic or foreign corporation primarilyengaged in activities that, in accordance with the North American IndustrialClassification System (NAICS), United States Manual, United States Office ofManagement and Budget, 1997 Edition, would be included in Sector 11, 31, 32,or 33.
E. The General Assembly of Virginia finds that job creation is essential tothe continued fiscal health of the Commonwealth. In this modern economy,states often compete for quality manufacturing jobs. Accordingly, theprovisions of this section relating to manufacturing companies that increasetheir employment in Virginia are integral to the purpose of the electionallowed pursuant to this section. If any provision of this section is for anyreason held to be invalid or unconstitutional by the decision of a court ofcompetent jurisdiction, that provision shall not be deemed severable.
