Virginia Business Incentives
Virginia fosters a very pro-business environment that is reflected in all the communities within the state. To support business growth and encourage startups, Virginia offers qualifying businesses statewide incentives to supplement the incentives offered by each locality. Virginia business incentives include financial assistance, facilities development grants, tax credits and exemptions, and are offered in addition to localized incentive programs.
Southern Virginia is home to a diverse range of counties and cities, each offering attractive, localized incentives available to businesses in addition to the state-funded incentives. This provides businesses with competitive incentive packages to ensure they are well-supported from the start. Local Virginia business incentive packages and offerings vary by locality and are unique to the individual business and their needs.
STATE-FUNDED INCENTIVE PROGRAMS
Corporate Income Tax
The Virginia corporate income tax rate is a flat 6 percent; however, the sales factor in the state’s income apportionment formula is double weighted, benefiting companies with high payrolls and property in Virginia.
Property Tax Incentives
Virginia does not tax property at the state level. Real estate and tangible personal property are taxed at the local level. Items not taxed in Virginia include manufacturers’ inventory, intangible property and furniture/fixtures.
Sales and Use Tax Exemptions
Virginia has one of the lowest sales tax rates in the country at 6 percent; however, there are some exemptions that can lower this sales tax rate such as items purchased for resale or used in manufacturing, pollution control devices, purchases used in research and development, and charges for utilities and Internet access. Computer equipment purchased or leased for the processing, storage, retrieval, or communication of data in large data centers will also qualify for this tax exemption.
The Commonwealth's Opportunity Fund (COF)
The COF is a discretionary financial incentive established to support projects that create new jobs and investment in accordance with certain criteria established by state legislation. Grants are made to the community and may be used for such things as site acquisition and development, transportation access, public or private utility extension or capacity development, construction or build-out of publicly or privately-owned buildings, or training. Grants are made at the discretion of the Governor.
The Green Job Creation Tax Credit
This tax credit for “green” companies awards an annual tax credit of $500 for each salary that is $50,000 or more for up to 350 jobs. The credit is allowed in the first taxable year after the job has been filled for at least one year and in each of the four succeeding years. Green jobs are related to the field of renewable, alternative energies.
The Major Business Facility Job Tax Credit
Virginia Economic Development Incentive Grant (VEDIG)
The VEDIG is a discretionary performance incentive designed to assist and encourage companies to invest and create new employment opportunities by locating significant headquarters, administrative or service sector operations in Virginia.
Virginia Investment Partnership Grant (VIP)/Major Eligible Employer Grant (MEE)
Virginia Jobs Investment Program (VJIP)
Virginia Leaders in Export Trade (VALET)
Worker Retraining Tax Credit
LOCALLY-FUNDED INCENTIVE PROGRAMS
Foreign Trade Zones (FTZS)
FTZs allows 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.
Opportunity Zone and Opportunity Fund
The Opportunity Zones program provides a tax incentive for investors to re-invest their unrealized capital gains into Opportunity Funds that are dedicated to investing into designated census tracts or Opportunity Zones. Opportunity Zones are designated by the state and are typically located in economically-distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment.
Tobacco Region Opportunity Fund (TROF)
The TROF provides performance-based monetary grants and loans to localities in Virginia’s tobacco-producing regions. Many of the localities that Invest Southern Virginia represents are located in TROF territory.
Virginia Collaborative Economic Development Performance (CED) Grant
The CED Grant provides grants to localities that have entered into regional collaborative economic development initiatives to induce the location or expansion of companies meeting certain new job and capital investment requirements in the region.
Virginia Enterprise Zone - Job Creation Grant
The Virginia Enterprise Zone Job Creation Grant provides grants to businesses that create high-wage, full-time, permanent positions with health benefits in an Enterprise Zone that are net new jobs for Virginia.
Virginia Enterprise Zone - Real Property Investment Grant
The Virginia Enterprise Zone Real Property Investment Grant provides grants to investors that undertake rehabilitation, expansion or new construction projects within the boundaries of an Enterprise Zone.
There are many incentives available at the local, regional, and state level. Navigating the various programs and criteria can be confusing. We’re here to help.
To get connected to local economic developers within the Southern Virginia region, please contact Lauren Mathena at email@example.com.
To learn more about incentives available at a state level, visit the Virginia Economic Development Partnership at www.vedp.org/incentives.