"Business tax credit" means a credit against any tax due under Articles 2(§ 58.1-320 et seq.) and 10 (§ 58.1-400 et seq.) of Chapter 3, Chapter 12 (§58.1-1200 et seq.), Article 1 (§ 58.1-2500 et seq.) of Chapter 25, or Article2 (§ 58.1-2620 et seq.) of Chapter 26 of Title 58.1 due from a business firm.
"Large qualified business firm" means a qualified business firm makingqualified zone investments in excess of $15 million when such qualified zoneinvestments result in the creation of at least 50 permanent full-timepositions. "Qualified zone investment" and "permanent full-time position"shall have the meanings provided in subsection A of § 59.1-280.1.
"Small qualified business firm" means any qualified business firm otherthan a large qualified business firm.
B. The Department shall certify annually to the Commissioner of theDepartment of Taxation, or in the case of (i) business firms subject to taxunder Article 1 (§ 58.1-2500 et seq.) of Chapter 25 of Title 58.1 to theCommissioner of Insurance for the State Corporation Commission, or (ii)business firms subject to tax under Article 2 (§ 58.1-2620 et seq.) ofChapter 26 of Title 58.1 to the Director of Public Service Taxation for theState Corporation Commission, the applicability of the business tax creditprovided herein for a qualified business firm. Any certification by theDepartment pursuant to this section shall not impair the authority of theDepartment of Taxation or State Corporation Commission to deny in whole or inpart any claimed tax credit if the Department of Taxation or StateCorporation Commission determines that the qualified business firm is notentitled to such tax credit. The Department of Taxation or State CorporationCommission shall notify the Department in writing upon determining that abusiness firm is ineligible for such tax credit.
C. Small qualified business firms shall be allowed a business tax credit inan amount equal to 80 percent of the tax due to the Commonwealth for thefirst tax year and 60 percent of the tax due the Commonwealth for the secondtax year through the tenth tax year.
D. Large qualified business firms shall be allowed a business tax credit in apercentage amount determined by agreement between the Department and thelarge qualified business firm, provided such percentage amounts shall notexceed the percentages provided for small qualified business firms as setforth in subsection C.
E. Any business tax credit not usable may not be applied to future tax years.
F. When a partnership or a small business corporation making an electionpursuant to Subchapter S of the Internal Revenue Code is eligible for a taxcredit under this section, each partner or shareholder shall be eligible forthe tax credit provided for in this section on his individual income tax inproportion to the amount of income received by that partner from thepartnership, or shareholder from his corporation, respectively.
G. Tax credits provided for in this section shall only apply to taxableincome of a qualified business firm attributable to the conduct of businesswithin the enterprise zone. Any qualified business firm having taxable incomefrom business activity both within and without the enterprise zone shallallocate and apportion its Virginia taxable income attributable to theconduct of business as follows:
1. The portion of a qualified business firm's Virginia taxable incomeallocated and apportioned to business activities within an enterprise zoneshall be determined by multiplying its Virginia taxable income by a fraction,the numerator of which is the sum of the property factor and the payrollfactor, and the denominator of which is two.
a. The property factor is a fraction. The numerator is the average value ofreal and tangible personal property of the business firm which is used in theenterprise zone. The denominator is the average value of real and tangiblepersonal property of the business firm used everywhere in the Commonwealth.
b. The payroll factor is a fraction. The numerator is the total amount paidor accrued within the enterprise zone during the taxable period by thebusiness firm for compensation. The denominator is the total compensationpaid or accrued everywhere in the Commonwealth during the taxable period bythe business firm for compensation.
2. The property factor and the payroll factor shall be determined inaccordance with the procedures established in §§ 58.1-409 through 58.1-413for determining the Virginia taxable income of a corporation having incomefrom business activities which is taxable both within and without theCommonwealth, mutatis mutandis.
3. If a qualified business firm believes that the method of allocation andapportionment hereinbefore prescribed as administered has operated or willoperate to allocate or apportion to an enterprise zone a lesser portion ofits Virginia taxable income than is reasonably attributable to businessconducted within the enterprise zone, it shall be entitled to file with theDepartment of Taxation a statement of its objections and of such alternativemethod of allocation or apportionment as it believes to be appropriate underthe circumstances with such detail and proof and within such time as theDepartment of Taxation may reasonably prescribe. If the Department ofTaxation concludes that the method of allocation or apportionment employed isin fact inequitable or inapplicable, it shall redetermine the taxable incomeby such other method of allocation or apportionment as best seems calculatedto assign to an enterprise zone the portion of the qualified business firm'sVirginia taxable income reasonably attributable to business conducted withinthe enterprise zone.
H. Tax credits awarded under this section and under § 59.1-280.1 shall notexceed $7.5 million annually until the end of fiscal year 2019.
I. The provisions of this section shall apply only as follows:
1. To those qualified business firms that have initiated use of enterprisezone tax credits pursuant to this section on or before July 1, 2005;
2. To those small qualified business firms and large qualified business firmsthat have signed agreements with the Commonwealth regarding the use ofenterprise zone tax credits in accordance with this section on or before July1, 2005; provided that in the case of small qualified business firms, thesigned agreements must be based on proposals developed by the Commonwealthprior to November 1, 2004.
(1982, c. 275; 1983, c. 572; 1988, c. 236; 1992, c. 301; 1995, c. 792; 1996,c. 77; 1997, c. 517; 1998, c. 759; 2003, c. 676; 2005, cc. 863, 884; 2009,cc. 207, 271.)
"Business tax credit" means a credit against any tax due under Articles 2(§ 58.1-320 et seq.) and 10 (§ 58.1-400 et seq.) of Chapter 3, Chapter 12 (§58.1-1200 et seq.), Article 1 (§ 58.1-2500 et seq.) of Chapter 25, or Article2 (§ 58.1-2620 et seq.) of Chapter 26 of Title 58.1 due from a business firm.
"Large qualified business firm" means a qualified business firm makingqualified zone investments in excess of $15 million when such qualified zoneinvestments result in the creation of at least 50 permanent full-timepositions. "Qualified zone investment" and "permanent full-time position"shall have the meanings provided in subsection A of § 59.1-280.1.
"Small qualified business firm" means any qualified business firm otherthan a large qualified business firm.
B. The Department shall certify annually to the Commissioner of theDepartment of Taxation, or in the case of (i) business firms subject to taxunder Article 1 (§ 58.1-2500 et seq.) of Chapter 25 of Title 58.1 to theCommissioner of Insurance for the State Corporation Commission, or (ii)business firms subject to tax under Article 2 (§ 58.1-2620 et seq.) ofChapter 26 of Title 58.1 to the Director of Public Service Taxation for theState Corporation Commission, the applicability of the business tax creditprovided herein for a qualified business firm. Any certification by theDepartment pursuant to this section shall not impair the authority of theDepartment of Taxation or State Corporation Commission to deny in whole or inpart any claimed tax credit if the Department of Taxation or StateCorporation Commission determines that the qualified business firm is notentitled to such tax credit. The Department of Taxation or State CorporationCommission shall notify the Department in writing upon determining that abusiness firm is ineligible for such tax credit.
C. Small qualified business firms shall be allowed a business tax credit inan amount equal to 80 percent of the tax due to the Commonwealth for thefirst tax year and 60 percent of the tax due the Commonwealth for the secondtax year through the tenth tax year.
D. Large qualified business firms shall be allowed a business tax credit in apercentage amount determined by agreement between the Department and thelarge qualified business firm, provided such percentage amounts shall notexceed the percentages provided for small qualified business firms as setforth in subsection C.
E. Any business tax credit not usable may not be applied to future tax years.
F. When a partnership or a small business corporation making an electionpursuant to Subchapter S of the Internal Revenue Code is eligible for a taxcredit under this section, each partner or shareholder shall be eligible forthe tax credit provided for in this section on his individual income tax inproportion to the amount of income received by that partner from thepartnership, or shareholder from his corporation, respectively.
G. Tax credits provided for in this section shall only apply to taxableincome of a qualified business firm attributable to the conduct of businesswithin the enterprise zone. Any qualified business firm having taxable incomefrom business activity both within and without the enterprise zone shallallocate and apportion its Virginia taxable income attributable to theconduct of business as follows:
1. The portion of a qualified business firm's Virginia taxable incomeallocated and apportioned to business activities within an enterprise zoneshall be determined by multiplying its Virginia taxable income by a fraction,the numerator of which is the sum of the property factor and the payrollfactor, and the denominator of which is two.
a. The property factor is a fraction. The numerator is the average value ofreal and tangible personal property of the business firm which is used in theenterprise zone. The denominator is the average value of real and tangiblepersonal property of the business firm used everywhere in the Commonwealth.
b. The payroll factor is a fraction. The numerator is the total amount paidor accrued within the enterprise zone during the taxable period by thebusiness firm for compensation. The denominator is the total compensationpaid or accrued everywhere in the Commonwealth during the taxable period bythe business firm for compensation.
2. The property factor and the payroll factor shall be determined inaccordance with the procedures established in §§ 58.1-409 through 58.1-413for determining the Virginia taxable income of a corporation having incomefrom business activities which is taxable both within and without theCommonwealth, mutatis mutandis.
3. If a qualified business firm believes that the method of allocation andapportionment hereinbefore prescribed as administered has operated or willoperate to allocate or apportion to an enterprise zone a lesser portion ofits Virginia taxable income than is reasonably attributable to businessconducted within the enterprise zone, it shall be entitled to file with theDepartment of Taxation a statement of its objections and of such alternativemethod of allocation or apportionment as it believes to be appropriate underthe circumstances with such detail and proof and within such time as theDepartment of Taxation may reasonably prescribe. If the Department ofTaxation concludes that the method of allocation or apportionment employed isin fact inequitable or inapplicable, it shall redetermine the taxable incomeby such other method of allocation or apportionment as best seems calculatedto assign to an enterprise zone the portion of the qualified business firm'sVirginia taxable income reasonably attributable to business conducted withinthe enterprise zone.
H. Tax credits awarded under this section and under § 59.1-280.1 shall notexceed $7.5 million annually until the end of fiscal year 2019.
I. The provisions of this section shall apply only as follows:
1. To those qualified business firms that have initiated use of enterprisezone tax credits pursuant to this section on or before July 1, 2005;
2. To those small qualified business firms and large qualified business firmsthat have signed agreements with the Commonwealth regarding the use ofenterprise zone tax credits in accordance with this section on or before July1, 2005; provided that in the case of small qualified business firms, thesigned agreements must be based on proposals developed by the Commonwealthprior to November 1, 2004.
(1982, c. 275; 1983, c. 572; 1988, c. 236; 1992, c. 301; 1995, c. 792; 1996,c. 77; 1997, c. 517; 1998, c. 759; 2003, c. 676; 2005, cc. 863, 884; 2009,cc. 207, 271.)
"Business tax credit" means a credit against any tax due under Articles 2(§ 58.1-320 et seq.) and 10 (§ 58.1-400 et seq.) of Chapter 3, Chapter 12 (§58.1-1200 et seq.), Article 1 (§ 58.1-2500 et seq.) of Chapter 25, or Article2 (§ 58.1-2620 et seq.) of Chapter 26 of Title 58.1 due from a business firm.
"Large qualified business firm" means a qualified business firm makingqualified zone investments in excess of $15 million when such qualified zoneinvestments result in the creation of at least 50 permanent full-timepositions. "Qualified zone investment" and "permanent full-time position"shall have the meanings provided in subsection A of § 59.1-280.1.
"Small qualified business firm" means any qualified business firm otherthan a large qualified business firm.
B. The Department shall certify annually to the Commissioner of theDepartment of Taxation, or in the case of (i) business firms subject to taxunder Article 1 (§ 58.1-2500 et seq.) of Chapter 25 of Title 58.1 to theCommissioner of Insurance for the State Corporation Commission, or (ii)business firms subject to tax under Article 2 (§ 58.1-2620 et seq.) ofChapter 26 of Title 58.1 to the Director of Public Service Taxation for theState Corporation Commission, the applicability of the business tax creditprovided herein for a qualified business firm. Any certification by theDepartment pursuant to this section shall not impair the authority of theDepartment of Taxation or State Corporation Commission to deny in whole or inpart any claimed tax credit if the Department of Taxation or StateCorporation Commission determines that the qualified business firm is notentitled to such tax credit. The Department of Taxation or State CorporationCommission shall notify the Department in writing upon determining that abusiness firm is ineligible for such tax credit.
C. Small qualified business firms shall be allowed a business tax credit inan amount equal to 80 percent of the tax due to the Commonwealth for thefirst tax year and 60 percent of the tax due the Commonwealth for the secondtax year through the tenth tax year.
D. Large qualified business firms shall be allowed a business tax credit in apercentage amount determined by agreement between the Department and thelarge qualified business firm, provided such percentage amounts shall notexceed the percentages provided for small qualified business firms as setforth in subsection C.
E. Any business tax credit not usable may not be applied to future tax years.
F. When a partnership or a small business corporation making an electionpursuant to Subchapter S of the Internal Revenue Code is eligible for a taxcredit under this section, each partner or shareholder shall be eligible forthe tax credit provided for in this section on his individual income tax inproportion to the amount of income received by that partner from thepartnership, or shareholder from his corporation, respectively.
G. Tax credits provided for in this section shall only apply to taxableincome of a qualified business firm attributable to the conduct of businesswithin the enterprise zone. Any qualified business firm having taxable incomefrom business activity both within and without the enterprise zone shallallocate and apportion its Virginia taxable income attributable to theconduct of business as follows:
1. The portion of a qualified business firm's Virginia taxable incomeallocated and apportioned to business activities within an enterprise zoneshall be determined by multiplying its Virginia taxable income by a fraction,the numerator of which is the sum of the property factor and the payrollfactor, and the denominator of which is two.
a. The property factor is a fraction. The numerator is the average value ofreal and tangible personal property of the business firm which is used in theenterprise zone. The denominator is the average value of real and tangiblepersonal property of the business firm used everywhere in the Commonwealth.
b. The payroll factor is a fraction. The numerator is the total amount paidor accrued within the enterprise zone during the taxable period by thebusiness firm for compensation. The denominator is the total compensationpaid or accrued everywhere in the Commonwealth during the taxable period bythe business firm for compensation.
2. The property factor and the payroll factor shall be determined inaccordance with the procedures established in §§ 58.1-409 through 58.1-413for determining the Virginia taxable income of a corporation having incomefrom business activities which is taxable both within and without theCommonwealth, mutatis mutandis.
3. If a qualified business firm believes that the method of allocation andapportionment hereinbefore prescribed as administered has operated or willoperate to allocate or apportion to an enterprise zone a lesser portion ofits Virginia taxable income than is reasonably attributable to businessconducted within the enterprise zone, it shall be entitled to file with theDepartment of Taxation a statement of its objections and of such alternativemethod of allocation or apportionment as it believes to be appropriate underthe circumstances with such detail and proof and within such time as theDepartment of Taxation may reasonably prescribe. If the Department ofTaxation concludes that the method of allocation or apportionment employed isin fact inequitable or inapplicable, it shall redetermine the taxable incomeby such other method of allocation or apportionment as best seems calculatedto assign to an enterprise zone the portion of the qualified business firm'sVirginia taxable income reasonably attributable to business conducted withinthe enterprise zone.
H. Tax credits awarded under this section and under § 59.1-280.1 shall notexceed $7.5 million annually until the end of fiscal year 2019.
I. The provisions of this section shall apply only as follows:
1. To those qualified business firms that have initiated use of enterprisezone tax credits pursuant to this section on or before July 1, 2005;
2. To those small qualified business firms and large qualified business firmsthat have signed agreements with the Commonwealth regarding the use ofenterprise zone tax credits in accordance with this section on or before July1, 2005; provided that in the case of small qualified business firms, thesigned agreements must be based on proposals developed by the Commonwealthprior to November 1, 2004.
(1982, c. 275; 1983, c. 572; 1988, c. 236; 1992, c. 301; 1995, c. 792; 1996,c. 77; 1997, c. 517; 1998, c. 759; 2003, c. 676; 2005, cc. 863, 884; 2009,cc. 207, 271.)
