|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
| ||||||
|
VirginiaBusiness Incentives and Resources Tax Incentives Training Related Programs Financial Assistance Financing Programs Other Programs and Services The information summarized on the Virginia Incentives and Resources web page was obtained from the publication, A Guide to Business Incentives 2005-2006, which was developed by the Virginia Economic Development Partnership. The publication is posted as a PDF file, in its entirety, on our website, www.YesVirginia.org and contains detailed information on a variety of state tax incentives and training resources, as well as other organizations that provide services to the industry. SPI South has highlighted below some business incentives that the Commonwealth of Virginia offers, and other helpful services. If you would like additional information, please contact the Virginia Economic Development Partnership at (804) 545-5744. Corporate Income Tax Major Business Facility Job Tax Credit is for qualified companies locating or expanding in Virginia. These companies receive a $1,000 corporate income tax credit for each new full-time job created over a threshold number of jobs. Companies locating in Enterprise Zones or economically distressed areas are required to meet a 50-job threshold; all other locations have a 100-job threshold. The $1,000 credit is available for all qualifying jobs in excess of the threshold and is taken in equal installments over three years ($333 per year). Credits are available for taxable years beginning on or after January 1, 1995, but before January 1, 2010. Unused credits may be carried over for up to ten years. For more information, please see page 4 in our Guide to Business Incentives. Recycling Equipment Tax Credit is available to manufacturers for the purchase of certified machinery and equipment used for processing recyclable materials in taxable years beginning on or after January 1, 1999, but before January 1, 2007. The credit is equal to 10 percent of the total original capitalized cost of the equipment. In any taxable year, the amount of credit allowed cannot exceed 40 percent of the company's Virginia income tax liability before the credit. The unused amount of the credit may be carried over for ten years. The Virginia Department of Environmental Quality certifies that equipment to be credited is integral to the recycling process. For more information, please see page 4 in our Guide to Business Incentives. Day Care Facility Investment Tax Credit provides businesses with a tax credit equal to 25 percent of all expenditures incurred in the construction, renovation, planning, or acquisition of facilities for the purpose of providing day care for children of company employees. Any credit not usable for the taxable year may be carried over to the extent usable for the next three taxable years. The maximum credit is $25,000. The Virginia Tax Commissioner at the Department of Taxation approves applications for this program. For more information, please see page 4 in our Guide to Business Incentives. Worker Retraining Tax Credit gives existing Virginia companies a tax credit equal to 30 percent of all expenditures made by the employer for eligible worker retraining. The credit has a spending cap of $2.5 million in any taxable year. Eligible worker retraining consists of courses at Virginia community colleges and private schools, certified by the Department of Business Assistance, or retraining programs through apprenticeship agreements approved by the Virginia Apprenticeship Council. For more information, please see page 4 in our Guide to Business Incentives. Sales and Use Tax Exemptions Virginia's sales and use tax remains among the lowest in the nation at 5 percent (4 percent state and 1 percent local). Some important exemptions include: manufacturers' purchases used directly in production, including machinery, tools, spare parts, industrial fuels and raw materials; items purchased for resale by distributors; certified pollution control equipment and facilities; custom computer software; utilities delivered through lines, pipes or mains; purchases used directly and exclusively in research and development; most film, video and audio production-related purchases; charges for Internet access, related communications services and sales of software via the Internet; and purchases used directly and exclusively in activities performed in cooperation with the Virginia Commercial Space Flight Authority. For more information, please see page 6 in our Guide to Business Incentives. Property Tax Incentives Virginia does not tax: Localities have the option to fully or partially exempt the following property from taxation: Localities may elect to tax the following tangible personal property at reduced rates: The Workforce Services Division of the Virginia Department of Business Assistance offers customized recruiting and training assistance to companies that are creating new jobs. In addition, Workforce Services offers assistance to companies that need to retrain existing employees. As a business development incentive supporting economic development efforts throughout Virginia, Workforce Services programs are designed to reduce the human resource development costs of new and expanding companies throughout the Commonwealth of Virginia. The Workforce Services Division of the Virginia Department of Business Assistance offers customized recruiting and training assistance to companies that are creating new jobs. In addition, Workforce Services offers assistance to companies that need to retrain existing employees. As a business development incentive supporting economic development efforts throughout Virginia, Workforce Services programs are designed to reduce the human resource development costs of new and expanding companies throughout the Commonwealth of Virginia. The Workforce Services program began in 1965 and is the second oldest economic development incentive in Virginia. Over the last five years, Workforce Services has worked with 1,950 companies to train more than 86,500 Virginians. For additional information, please see page 10 in our Guide to Business Incentives or visit www.dba.virginia.gov/workforce The Workforce Investment Act (WIA) created a new governance structure consisting of state and local workforce investment boards and a streamlined one-stop delivery system. The one-stop system directly delivers core employment and training services, such as:
The Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development (DHCD), assists with business development and expansion in specially targeted areas throughout the state, called Enterprise Zones. The Virginia Enterprise Zone Program offers two state incentives to qualified businesses located in a Virginia Enterprise Zone. Enterprise Zone Job Creation Grants provide qualified businesses located in an Enterprise Zone cash grants for permanent net new jobs created over a four-job threshold. Qualifying jobs must provide health benefits and meet certain wage criteria in order to be eligible for $500/$800 grants per position each year for up to five years. Positions in retail, local service or food and beverage service are not grant-eligible. Businesses must qualify for the grants annually. A business can receive grants for a maximum of 350 jobs annually above the four-job threshold. Real Property Investment Grants are cash grants paid to zone investors (businesses and individuals) making a qualified investment in real property located within an Enterprise Zone eligible for a cash grant. The grant is equal to 30 percent of the investment, up to a maximum of $125,000 for companies investing $2 million or less in real property investments. For companies investing over $2 million, the maximum grant is $250,000. Total grant awards may not exceed the maximum specified above within any five-year period for a specific building or facility. Investment in rehabilitation/expansion projects must equal $50,000. New construction projects must invest at least $250,000 in qualified improvements. Currently, 57 zones have been designated. In addition to state incentives, each zone community offers additional local incentives to qualified businesses. For more information, please see pages 7 in our Guide to Business Incentives. Technology Zones allow the locality in which they are located the ability to establish, by ordinance, one or more technology zones to attract growth in targeted industries. Qualified businesses locating or expanding operations in a zone may receive local permit and user fee waivers, local tax incentives, special zoning treatment or exemption from ordinances. Once a local technology zone has been established, incentives may be provided for up to 10 years. Each locality designs and administers its own program. For additional information, please see page 9 in our Guide to Business Incentives. Industrial Access Road Program
The maximum award for an industrial access road is $300,000. However, the state will fund an additional $150,000 if the amount is matched on a dollar-for-dollar basis from sources other than the Department of Transportation. For additional information, please see page 12 in our Guide to Business Incentives or visit www.virginiadot.org/business/local-assistance.asp The Rail Industrial Access Program provides funds to construct railroad tracks to new or substantially expanded industrial and commercial projects having a positive impact on economic development in Virginia. Financial assistance to any one county, city or town is limited to $450,000 in one fiscal year, and the locality may utilize the entire allocation for one project. The state program will provide a maximum of $300,000 in unmatched funds. Additional funds up to the annual limit must be matched on a dollar-for-dollar basis. Funds may be used to construct, reconstruct or improve part or all of the necessary tracks and related facilities on public or private property. Funds may not be used for mainline switch, right-of-way acquisition or adjustment of utilities. For more information, please see pages 12-13 in our Guide to Business Incentives or visit www.drpt.virginia.gov The Governor's Opportunity Fund (GOF) is designed as a "deal closing" fund to be employed at the Governor's discretion when necessary to secure a company location or expansion in Virginia. The GOF serves as a final resource for Virginia in the face of serious competition from other states or countries. Awards are made with the expectation that the grant to a locality will result in a favorable decision for the Commonwealth. For additional information, please call the Virginia Economic Development Partnership (804) 545-5744 or see page 16 in our Guide to Business Incentives. The Virginia Investment Partnership Grant Fund is a discretionary performance incentive designed to encourage continued investment by Virginia companies resulting in added capacity, modernization, increased productivity or the creation, development and utilization of advanced technology. The program is targeted to companies that have operated in Virginia for at least five years, undergo technological change, and meet certain investment and/or job creation requirements. The performance grant is determined by the Secretary of Commerce and Trade, based on the recommendation of the Virginia Economic Development Partnership (VEDP) and subject to the approval of the Governor. Companies are required to execute a performance agreement before receipt of the grant to ensure that performance expectations are met and the project must not be publicly announced prior to award of a grant. For additional information, including guidelines and application information, please contact the Virginia Economic Development Partnership at (804) 545-5744 or see page 17 in our Guide to Business Incentives. The Tobacco Region Opportunity Fund makes grants to localities in Virginia's tobacco-producing regions to assist with specific projects that result in the creation of new jobs and investment. Grants are made at the discretion of the Tobacco Indemnification and Community Revitalization Commission. The goal of the Fund is to attract competitive projects expected to have a regional impact due to the magnitude of new employment and investment, and the possibility of follow-on industry. No matching funds are required from the locality applying for the grant. Eligible projects must include a minimum new private capital investment of $1 million. For more information please see page 19 in our Guide to Business Incentives or visit www.vatobaccocommission.org. The Solar Photovoltaic Manufacturing Grant program is a performance-based incentive designed to encourage the product development and manufacture of a high-technology, renewable energy source in Virginia. Any manufacturer who sells solar photovoltaic panels manufactured in Virginia is entitled to receive an annual grant of up to 75 cents per watt of the rated capacity of panels sold. New companies beginning manufacturing of solar photovoltaic panels can receive an annual solar photovoltaic manufacturing incentive grant for six years. For years one and two, the rate is 75 cents per watt sold; for years three and four, the rate is 50 cents per watt sold; and for years five and six, the rate is 25 cents per watt sold. For more information, please visit www.dmme.virginia.gov. Industrial Development Bonds (IDB) are issued through the Virginia Small Business Financing Authority. IDBs can be used to finance new or expanding manufacturing facilities, 501c3 corporations and exempt projects such as solid-waste disposal facilities. Through IDBs, credit-worthy businesses and 501c3 corporations can finance up to 100 percent of the cost of acquiring, constructing and equipping a facility, including site preparation, at favorable interest rates. IDBs may also be used to allow manufacturers to lease facilities and equipment at tax-exempt rates. All projects financed with IDBs must meet federal tax code eligibility requirements. The maximum manufacturing facilities project size is $10 million; 501c3 corporations and exempt projects are not subject to this limitation. Projects under $1 million are generally not cost-effective due to the initial transaction costs associated with bond financing. For additional information, please visit www.dba.virginia.gov/financing. The Community Development Block Grants (CDBGs) are available to eligible cities, counties and towns to support local economic development activities. Funds may be used for off-site activities such as water and sewer line extensions or treatment facilities, and road and rail access. Funds may also be available as loans for on-site assistance that supports economic development, subject to underwriting. CDBG funds are available for micro-enterprise development and central business district revitalization. Funds are awarded to localities on a competitive basis during an annual application cycle. Funds are also awarded noncompetitively, provided certain thresholds are met. At least 51 percent of jobs created or retained by a project using CDBG funding must be held by or made available to low- and moderate-income persons. For more information, please visit www.dhcd.virginia.gov. The Virginia Coalfield Economic Development Authority (VCEDA) works to enhance the economic base of far southwestern Virginia. The Authority provides low-interest loans and/or grants to qualified new or expanding industries through its financing program. The loans may be used for real estate purchases, construction or expansion of buildings, the purchase of machinery and equipment, and workforce development and training. To be eligible for the VCEDA loans, private businesses must be basic employers who will bring new income to the area. For more information please see page 18 in our Guide to Business Incentives or visit www.vaceda.org. The Virginia Small Business Financing Authority (VSBFA), which is housed within the Virginia Department of Business Assistance, offers programs to provide businesses and communities with access to capital needed for economic growth and expansion. Industrial Development Bonds and the Umbrella Bond Program: The VSBFA issues both tax-exempt and taxable bonds to provide businesses and 501c3 corporations with access to long-term, fixed asset financing at favorable interest rates and terms. In addition, the VSBFA offers an Umbrella Bond Program, which provides a cost-efficient means for companies to sell their bonds in the public bond market, particularly for smaller projects with limited access to this market. The Virginia Economic Development Loan Fund facilitates capital investment in Virginia's eligible communities by providing eligible borrowers direct loans which fill the "gap" financing need not met by equity or conventional financing. Community eligibility is determined based on guidelines set by the federal Economic Development Administration. The Loan Guaranty Program is designed to reduce a bank's risk in making loans and, thereby, increase the availability of short-term capital for small businesses. The maximum guaranty under the program is 75 percent of the loan or line of credit up to a maximum guaranty of $500,000, and the guaranty is available for up to three years. Eligible businesses must meet the VSBFA definition of a "small" business.* Virginia Capital Access Program (VCAP) VCAP provides a form of loan portfolio insurance for participating banks through special loan loss reserve accounts. These accounts are funded by loan enrollment premiums paid by the borrower and then matched by the VSBFA. Southside Region Tobacco Capital Access Program (TCAP) operates like the VCAP except that it is available solely for businesses that are operating or plan to operate within the Tobacco Region of Southside Virginia. Small Business Environmental Compliance Assistance Fund (ECAF) is designed to provide Virginia businesses with financing for the purchase of 1.) equipment to comply with the federal Clean Air Act, 2.) equipment to implement voluntary pollution prevention measures, or 3.) equipment or structures to implement voluntary agricultural best management practices (BMP). These direct loans from the VSBFA can be up to $100,000 at a three percent fixed interest rate. Amortizations are typically tied to the useful life of the equipment purchased or the life of the BMP. Child Day Care Financing Program (CDC) program can provide direct low-interest-rate loans to regulated childcare providers for quality enhancement projects or to maintain childcare standards. Borrowers may be child day care centers ($50,000 maximum loan amount) or family home providers ($5,000 maximum loan amount). * VSBFA's definition of "small" business is $10 million or less in annual revenues over each of the last three years; or net worth of $2 million or less; or fewer than 250 employees. For additional information, please visit www.dba.virginia.gov/financing. Virginia's Center for Innovative Technology (CIT) is a state-chartered nonprofit corporation focused on accelerating Virginia's next generation of technology and technology companies. CIT's statewide business assistance programs and services emerge from its goal to make Virginia a global leader in the development of entrepreneurial technology ventures. Federal Funding: CIT leads Virginia's statewide program to support candidates seeking funding through the federal government's Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, as well as the Advanced Technology Program (ATP). CIT also operates a Procurement Technical Assistance Center, under contract with the Defense Logistics Agency, to help Central Virginia businesses market their products and services to government agencies. Venture Funding: Recognizing the role that private equity investment plays in the initiation and growth of high-tech enterprises, CIT's Capital Access Program and new Growth Acceleration Program (GAP) investment fund target companies with a high potential to benefit from early-stage financial investment. In addition to making up to $100,000 available for seed-stage technology investment, services include in-depth business plan review and guidance, market research, executive team development and mentoring, business plan development and strategic partnering assistance, and presentation coaching. Field Technology Service: CIT's nationally recognized field operations outreach program serves every part of the Commonwealth, providing specialized services for technology application, process and product development and commercialization. Field representatives offer confidential one-on-one consulting, technical data and information, one-stop access to expertise in the universities and federal labs and referrals to a statewide network of partners that target a specific industry or business size. Building on 18 years of experience assisting Virginia's small technology businesses, CIT's field operations team focuses on a select client portfolio, offering substantial depth of service. For additional information regarding CIT and its services, please visit the Web site at www.cit.org. Exporting Programs and Services The Global Market Research Program produces comprehensive, tailor-made export marketing plans for Virginia companies that want to enter new export markets. VEDP's Division of International Trade, in cooperation with a leading private sector market research firm, has assisted over 485 businesses ranging from small entrepreneurs to Fortune 500 firms since the inception of this program in 1988. Your company is served by in-country market researchers who collect market data, prepare the analysis and deliver recommendations for your company's product or service. Regular updates and a final presentation are part of the project. The reports include qualitative and statistical research, as well as identification of specific prospects and likely customers. For more information please see page 23 in our Guide to Business Incentives or visit www.exportvirginia.org. Foreign Trade Zones Nos. 20, 137, 185, 204, 207, 238 are six general-purpose foreign trade zones (FTZs) designated by the U.S. Department of Commerce. All zones provide space for storage, distribution and light assembly operations. Additionally, through these general-purpose zones, Virginia has the capacity and capability to provide companies with subzone designation. Foreign trade zones allow businesses to defer paying U.S. Customs duties on imported goods held within the zones until the goods enter the United States for domestic consumption. No duties are paid if goods are re-exported. Companies also receive the benefit of not having to pay duties on broken or wasted product. Businesses are allowed to store goods within foreign trade zones for an unlimited period of time. They also are allowed to manufacture products within zones and pay duties on either the foreign parts used or on the finished product, whichever is most advantageous to the company. For more information, please see pages 13-14 of the Guide to Business Incentives or visit www.naftz.org. Virginia Leaders in Export Trade (VALET) is an innovative new program that helps Virginia companies gain a profitable foothold in global markets. VALET combines three essential ingredients-planning, expertise and capital-to create new sales opportunities for Virginia businesses. Companies who participate will share a commitment to international success with VEDP and private sector service providers. Regularly scheduled planning sessions will identify new international market opportunities and needs. Capital investment by the participating company will be enhanced with matching resources from VEDP to meet identified needs. In addition, expert professionals will provide a match of valuable in-kind services in a concentrated team approach. Attorneys, CPAs, bankers, translators and freight forwarders, all with established international credentials, will contribute essential skills required for a successful launch free of charge in the critical start-up stage. Since its inception in January 2002, 60 companies representing a wide cross-section of industry have been accepted into the VALET program. For more information, please call (804) 545-5753 or see page 23 in our Guide to Business Incentives or visit www.exportvirginia.org. The Virginia's Small Business Development Center Network (VSBDC) provides professional business counseling, training and information resources to help grow and strengthen Virginia businesses. SBDC professionals assist with business planning, marketing, financial analysis, and access to capital and business start-up issues. For established firms, emerging companies or aspiring entrepreneurs, the SBDC is where business comes to talk business. The SBDC Network is the most extensive business development program in Virginia, with 29 local centers across the state. The Network is a partnership between the U.S. Small Business Administration, George Mason University and local sponsors including universities, community colleges, chambers of commerce, municipalities and economic development organizations. For more information, please call (703) 277-7700 or visit www.virginiasbdc.org.
[ Overview | Events
| Involvement | Regional
Reports | Service Awards | Links
]
© 2003 SPI Southern Regional Office |