Major Business Facility Job Tax Credit Report, Taxable Year 2022 (October 23, 2024)

Summary

This is a letter dated October 23, 2024 from the Virginia Department of Taxation to The Honorable L. Louise Lucas, The Honorable Luke E. Torian and The Honorable Vivian E. Watts. It says the report is required by House Bill 2003 (Chapter 699 of the Acts of Assembly), enacted during the 2019 Session, regarding the Major Business Facility Job Tax Credit. It says the credit amount is $1,000 per new job created in excess of the qualifying threshold, and that the Department issued a total of $718,000 in credits for Taxable Year 2022, accounting for 1,436 qualified full-time employees. The credit was issued to facilities located in five different localities, with four different NAICS codes. The copy line names Stephen E. Cummings, Secretary of Finance.

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“Major Business Facility Job Tax Credit Report, Taxable Year 2022 (October 23, 2024).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-rd672-46f742e4b6/, SHA-256 d978b0d41ea230fb791cb06a39030d19b3873b9cf78afc1709ed6930a192ac48.

Full text

COMMONWEALTH of VIRGINIA
Depart111e11t of Taxatio11

October 23, 2024

TO: The Honorable L. Louise Lucas
Chair, Senate Finance and Appropriations Committee

The Honorable Luke E. Torian
Chair, House Appropriations Committee

The Honorable Vivian E. Watts
Chair, House Finance Committee

Dear Chairmen:

During the 2019 Session, the General Assembly enacted House Bill 2003 (Chapter
699 of the Acts of Assembly), which required the Department of Taxation ("the Department")
to publish an annual report regarding the Major Business Facility Job Tax Credit. This report
must include the location of sites used for major business facilities for which a credit was
claimed; the North American Industry Classification System ("NAICS") codes used for the
major business facilities for which a credit was claimed; the number of qualified full-time
employees for whom a credit was claimed; and the total cost to the Commonwealth's
General Fund of the credits claimed. The report is to be published for taxable years
beginning on or after January 1, 2019, and must include information for the 12-month period
ending on the preceding December 31. The Department is publishing this report to provide
data pertaining to Taxable Year 2022 Major Business Facility Job Tax Credits.

Background Regarding the Major Business Facility Job Tax Credit

Under Va. Code § 58.1-439, Virginia allows individuals, estates, trusts and
corporations to claim the Major Business Facility Job Tax Credit against their Virginia
income tax. Taxpayers may also apply these credits against their Virginia bank franchise tax
and certain license taxes. The credit is available to businesses that establish a new facility,
or expand an existing facility in Virginia. The credit amount is $1,000 per new job created in
excess of the qualifying threshold amount. The threshold amount is generally 50 new jobs,
Major Business Facility Job Tax Credit Report
October23, 2024
Page2

but may be lowered to 25 new jobs if the new jobs are located in designated Enterprise
Zones, or areas the Virginia Economic Development Authority has identified as
economically distressed. The credit is earned over a two-year period and the employment
level must be maintained for a minimum of six years. The amount of credit allowed cannot
exceed the tax imposed in any taxable year. Any credit not used in the taxable year the
credit was allowed may be carried forward for the next ten succeeding taxable years.

Information Regarding Taxable Year 2022 Credits

The Department issued a total of $718,000 in Major Business Facility Tax Credits to
taxpayers for Taxable Year 2022. Because the credit is issued for a two-year period
beginning with the year after the establishment or expansion of a major business facility,
this amount includes credits for major business facilities established or expanded during
Taxable Years2020 and 2021.

The credits issued for Taxable Year 2022 accounted for 1,436 qualified full-time
employees. The credit was issued to facilities located in five different localities, and by
facilities with four different NAICS codes, as shown below:

Taxable Year 2021 Major Business Facility Job Tax Credits
Locations NAICS Codes
General Warehousing and Storage (493110)
Software Publishers (513210)

The City of Richmond and the counties of Offices of Administrative Services (561110)
Augusta, Fairfax, Goochland, Suffolk Telemarketing Bureaus and Other Contact
Centers (561422)

The General Fund revenue impact of the Major Business Facility Tax Credit for
credits claimed on Taxable Year 2022 returns processed during Calendar Year 2023 was
$496 ,231. This amount includes the amount of credit issued by the Department for Taxable
Year 2022 and also includes amounts carried over from prior taxable years under the Major
Business Facility Tax Credit's ten-year carryover. It does not include credits issued for
Taxable Year 2022 that could not be applied against tax liability on the Taxable Year 2022
return and, therefore, will be carried over to future taxable years. It also does not include
credits claimed on returns processed after Calendar Year 2023.
Major Business Facility Job Tax Credit Report
October 23, 2024
Page3

Please contact me if you have any questions.

Sincerely,

Ja-
Tax Commissioner
Commonwealth of Virginia

C: The Honorable Stephen E. Cummings, Secretary of Finance
Kristin Collins, Deputy Commissioner for Tax Policy

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