New Company Incentive Program
Eligible Companies looking to establish a new presence in Virginia are offered a modified state corporate income tax and potential access to a grant or loan from the Commonwealth’s Opportunity Fund (COF). Eligible companies in traded sector industries that have no payroll or property in Virginia prior to January 1, 2018 will pay zero percent (0%) corporate Virginia state income tax on the income associated with their new Virginia presence. To be eligible the company must on or after January 1, 2018, but before January 1, 2025, either (a) spend at least $5 million in new real property capital investment in a qualified locality and create at least 10 new jobs in a qualified locality, or (b) create at least 50 new jobs in a qualified locality. Each new job must pay at least 150% of the Virginia minimum wage. The tax benefits will be available to eligible companies for six years. Access to the COF will depend on a variety of factors when the business becomes an eligible company, including a return on investment analysis and the availability of funds in the COF, but will not exceed $2,000 per new job per year for six years, which funds must be split between the eligible company and its employees.
- The company must have no existing property or payroll in the Commonwealth of Virginia as of January 1, 2018.
- The company must derive more than 50 percent of its revenue from outside the Commonwealth.
- A Company must generate a positive fiscal impact, as determined by VEDP.
Statutory Minimum General Eligibility Thresholds:
$5 million new capital investment and 10 new jobs paid at least 150% of the Virginia Minimum Wage
50 new jobs paid at least 150% of the Virginia Minimum Wage
At the discretion of VEDP, jobs may include teleworking positions, held by Virginia residents, who are employees of the recipient company or its affiliates.
Qualified Localities and Qualified Development Site:
A Qualified Locality means a localities where companies can apply for the exemption, and are: County of Accomack, Alleghany, Amelia, Appomattox, Bland, Brunswick, Buchanan, Buckingham, Caroline, Carroll, Charlotte, Craig, Cumberland, Dickenson, Dinwiddie, Essex, Giles, Gloucester, Grayson, Halifax, Henry, King and Queen, King William, Lancaster, Lee, Lunenburg, Mathews, Mecklenburg, Middlesex, Northampton, Northumberland, Nottoway, Page, Patrick, Pittsylvania, Prince Edward, Richmond, Russell, Scott, Smyth, Tazewell, Washington, Westmoreland, Wise or Wythe; or the City of Bristol, Danville, Galax, Martinsville, Norton or Petersburg.
A Qualified Development Site means, real property that is in a locality adjacent to a Qualified Locality and, before January 1, 2018, either (i) was owned or partly owned by a qualified locality or an industrial development authority of which a qualified locality is a member or (ii) was owned or partly owned by a locality or industrial development authority, was leased to a private party, and was subject to a revenue-sharing agreement providing that a portion of the revenues from the lease would be distributed to a qualified locality.
Expectations for Companies Receiving Benefits:
Companies receiving benefits from the New Company Incentive Program are expected to distribute, or expend at the direct benefit of employees, at least 50% of the proceeds to employees.
- It is expected that the distribution to the employees will take place in the calendar year in which the COF Grant proceeds were received by the Company.
- The Company has latitude to determine how, when and in what manner to make the distribution to the employees. In each Company Application, the Company will indicate how, when and in what manner the distribution is to be made. In the next Company Application, following receipt of COF Grant proceeds by the Company, the Company will report to VEDP how, when and in what manner the distribution was made to the Company’s employees.
- A company may file with VEDP an application for certification or re-certification that the company is an eligible company.
- Applications will be accepted during the period beginning on January 1 and ending April 1 of the calendar year immediately following the taxable year for which certification is sought.
- To remain an eligible company for any taxable year, a company must obtain certification or re-certification annually.
The application is expected to include:
- The full legal name of the company and a description of whether the company is a corporation or pass-through entity.
- The name of the qualified locality or qualified localities in which the company is located.
- The history of the company including any activities, assets, or employees in Virginia prior to January 1, 2018.
- General corporate information including the names of officers, directors, owners, partners, or members as may be applicable.
- Either (i) the amount of total new capital investment by the company in a qualified locality or qualified localities on or after January 1, 2018, and a summary breakdown of new capital investment into categories such as land, purchase of existing building, or real property improvements, or (ii) in the case of re-certification, whether the capital investment has been substantially retained or the additional amount of new capital investment made since the company’s previous application.
- A copy of the company’s real estate tax record from the Commissioner of the Revenue, or equivalent official, in the applicable qualified locality or qualified localities where the company’s facility is located.
- If the company’s real estate tax record does not accurately reflect the new capital investment made, copies of invoices related to the new capital investment paid by or on behalf of the company accompanied by a summary of the invoices and a certification by the company that such copies are true, accurate, and complete.
- Either (i) the number of new jobs created in a qualified locality or qualified localities beginning on or after January 1, 2018, a list of the new jobs, and the wage associated with each such new job, or (ii) in the case of re-certification, whether the new jobs have been substantially maintained.
- A copy of the company’s four most recent Employer’s Quarterly Tax Report (Form FC-20) filed with the Virginia Employment Commission.
- A certification and evidence that the company is a traded-sector company.