Defense Production Zones

Virginia’s cities, counties, and towns have the ability to establish, by ordinance, one or more defense production and support services zones to attract growth in national defense-related businesses. Each locality may grant incentives and provide certain regulatory flexibility in a defense production and support services zone. 

In established defense productions zones, local incentives may be provided to defense contractors or defense production businesses located in a defense production and support services zone for up to 20 years and may include, but not be limited to (i) reduction of permit fees, (ii) reduction of user fees, and (iii) reduction of any type of gross receipts tax. In addition, local governing bodies are authorized to enter into agreements for the payment of economic development incentive grants to defense contractors or defense production businesses located in defense production and support services zones with payment of the grants conditioned upon the businesses making certain real property or capital investments, creating and maintaining new jobs, or performing or meeting other economic development objectives.

Once a defense production zone has been established, incentives may be provided for up to 20 years. Each locality designs and administers its own program. 

Defense Production Zone Definitions:

“Defense contractor” means a business, other than a defense production business, that is primarily engaged in providing services in support of national defense, including but not limited to logistics and technical support.

“Defense production business” means a business engaged in the design, development, or production of materials, components, or equipment required to meet the needs of national defense. A locality may also include as a defense production business any business that performs functions ancillary to or in support of the design, development, or production of such materials, components, or equipment.

Each locality designs and administers its own program.

Companies interested in the benefits of locating in a defense production zone should contact the locality being considered for the expansion or location of new operations.

Currently, six localities have established a Defense Production Zone: 

• Fauquier County
• Greene County
• King George County
• City of Manassas Park
• City of Newport News
• Town of Warrenton 

In addition, Henrico County will create individual defense production zones based around individual projects on a case-by-case basis.

Code of Virginia

How long are incentives available in a defense production zone?

Local incentives may be provided for up to 20 years once a defense production zone has been established.