{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/58.1-422.2.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/58.1-422.2.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/58.1-422.2.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/58.1-422.2.html"}],"law_id":61386,"edition_id":1,"section_id":61386,"structure_id":13460,"section_number":"58.1-422.2","catch_line":"Apportionment; taxpayers with enterprise data center operations","history":"2015, cc. 92, 237; 2018, cc. 801, 802.","full_text":"A\n\nFor taxable years beginning on or after July 1, 2016, the Virginia taxable income of taxpayers with enterprise data center operations, excluding income allocable under \u00a7 58.1-407, shall be apportioned within and without the Commonwealth as follows:1\n\nFrom July 1, 2016, until July 1, 2017, by multiplying such income by a fraction, the numerator of which is the property factor plus the payroll factor plus quadruple the sales factor and the denominator of which is six, except that when the sales factor does not exist, the denominator of the fraction shall be the number of existing factors, and when the sales factor exists but the payroll factor or property factor does not exist, the denominator of the fraction shall be the number of existing factors plus three; and2\n\nFrom July 1, 2017, and thereafter, by multiplying such income by the sales factor.B\n\nAs used in this section:\n\t\t\t“Enterprise data center operations” means operations that (i) physically house information technology equipment such as servers, switches, routers, data storage devices, or related equipment; (ii) manage and process digital data and information to provide application services or management for data processing, such as web hosting, Internet, intranet, telecommunication, and information technology; (iii) are developed and owned by the taxpayer; and (iv) are operated by the taxpayer or any of its affiliates substantially for their own use.C\n\nThe provisions of this section requiring an apportionment formula for taxpayers with enterprise data center operations shall apply only to taxpayers that have entered into a memorandum of understanding with the Virginia Economic Development Partnership Authority on or after July 1, 2015, to make a new capital investment of at least $150 million in an enterprise data center in the Commonwealth on or after such date. The apportionment formula under this section shall apply to such taxpayers beginning with the taxable year for which the Virginia Economic Development Partnership Authority provides a written certification to the taxpayer that the new capital investment has been completed.D\n\nThe General Assembly of Virginia finds that capital investment in data centers is essential to the continued fiscal health of the Commonwealth. In this modern economy, states often compete for quality data centers. Accordingly, the provisions of subsection C relating to capital investment in enterprise data centers are integral to the purpose of this section. If any provision of this section is for any reason held to be invalid or unconstitutional by the decision of a court of competent jurisdiction, that provision shall not be deemed severable.E\n\nAny eligible company, as defined in § 58.1-405.1, that apportions its income pursuant to this section may subtract the value of its sales in the Commonwealth during the taxable year from the numerator of the ratio in subdivision A 2. Such eligible company may make such modification for the taxable year in which it first becomes eligible and for the six subsequent, consecutive taxable years, except for any year in which the eligible company’s (i) total, cumulative new capital investment falls below the applicable initial threshold or (ii) number of new jobs falls below the applicable initial threshold.","order_by":null,"text":{"0":{"id":224238,"text":"For taxable years beginning on or after July 1, 2016, the Virginia taxable income of taxpayers with enterprise data center operations, excluding income allocable under \u00a7 58.1-407, shall be apportioned within and without the Commonwealth as follows:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":224239,"text":"From July 1, 2016, until July 1, 2017, by multiplying such income by a fraction, the numerator of which is the property factor plus the payroll factor plus quadruple the sales factor and the denominator of which is six, except that when the sales factor does not exist, the denominator of the fraction shall be the number of existing factors, and when the sales factor exists but the payroll factor or property factor does not exist, the denominator of the fraction shall be the number of existing factors plus three; and","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":224240,"text":"From July 1, 2017, and thereafter, by multiplying such income by the sales factor.","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"B"},"3":{"id":224241,"text":"As used in this section:\n\t\t\t“Enterprise data center operations” means operations that (i) physically house information technology equipment such as servers, switches, routers, data storage devices, or related equipment; (ii) manage and process digital data and information to provide application services or management for data processing, such as web hosting, Internet, intranet, telecommunication, and information technology; (iii) are developed and owned by the taxpayer; and (iv) are operated by the taxpayer or any of its affiliates substantially for their own use.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A2","next_prefix":"C"},"4":{"id":224242,"text":"The provisions of this section requiring an apportionment formula for taxpayers with enterprise data center operations shall apply only to taxpayers that have entered into a memorandum of understanding with the Virginia Economic Development Partnership Authority on or after July 1, 2015, to make a new capital investment of at least $150 million in an enterprise data center in the Commonwealth on or after such date. The apportionment formula under this section shall apply to such taxpayers beginning with the taxable year for which the Virginia Economic Development Partnership Authority provides a written certification to the taxpayer that the new capital investment has been completed.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"5":{"id":224243,"text":"The General Assembly of Virginia finds that capital investment in data centers is essential to the continued fiscal health of the Commonwealth. In this modern economy, states often compete for quality data centers. Accordingly, the provisions of subsection C relating to capital investment in enterprise data centers are integral to the purpose of this section. If any provision of this section is for any reason held to be invalid or unconstitutional by the decision of a court of competent jurisdiction, that provision shall not be deemed severable.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"6":{"id":224244,"text":"Any eligible company, as defined in § 58.1-405.1, that apportions its income pursuant to this section may subtract the value of its sales in the Commonwealth during the taxable year from the numerator of the ratio in subdivision A 2. Such eligible company may make such modification for the taxable year in which it first becomes eligible and for the six subsequent, consecutive taxable years, except for any year in which the eligible company’s (i) total, cumulative new capital investment falls below the applicable initial threshold or (ii) number of new jobs falls below the applicable initial threshold.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D"}},"ancestry":[{"id":13460,"edition_id":1,"name":"Taxation of Corporations","identifier":"10","label":"article","depth":4,"order_by":1,"parent_id":13152,"metadata":{},"date_created":"2026-06-26 03:44:56","date_modified":"2026-06-26 03:44:56","permalink":{"id":253359,"object_type":"structure","relational_id":13460,"identifier":"10","token":"58.1\/I\/3\/10","url":"\/58.1\/I\/3\/10\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13152,"edition_id":1,"name":"Income Tax","identifier":"3","label":"chapter","depth":3,"order_by":1,"parent_id":12837,"metadata":{},"date_created":"2026-06-26 03:44:21","date_modified":"2026-06-26 03:44:21","permalink":{"id":253267,"object_type":"structure","relational_id":13152,"identifier":"3","token":"58.1\/I\/3","url":"\/58.1\/I\/3\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12837,"edition_id":1,"name":"Taxes Administered by the Department of Taxation","identifier":"I","label":"subtitle","depth":2,"order_by":1,"parent_id":12703,"metadata":{},"date_created":"2026-06-26 03:43:55","date_modified":"2026-06-26 03:43:55","permalink":{"id":252075,"object_type":"structure","relational_id":12837,"identifier":"I","token":"58.1\/I","url":"\/58.1\/I\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12703,"edition_id":1,"name":"Taxation","identifier":"58.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":251959,"object_type":"structure","relational_id":12703,"identifier":"58.1","token":"58.1","url":"\/58.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":60955,"structure_id":13460,"section_number":"58.1-400","catch_line":"Imposition of tax","url":"\/58.1-400\/","token":"58.1\/I\/3\/10\/58.1-400","metadata":false},{"id":58533,"structure_id":13460,"section_number":"58.1-400.1","catch_line":"Minimum tax on telecommunications companies","url":"\/58.1-400.1\/","token":"58.1\/I\/3\/10\/58.1-400.1","metadata":false},{"id":77310,"structure_id":13460,"section_number":"58.1-400.2","catch_line":"Taxation of electric suppliers, pipeline distribution companies, gas utilities, and gas suppliers","url":"\/58.1-400.2\/","token":"58.1\/I\/3\/10\/58.1-400.2","metadata":false},{"id":79891,"structure_id":13460,"section_number":"58.1-400.3","catch_line":"Minimum tax on certain electric suppliers","url":"\/58.1-400.3\/","token":"58.1\/I\/3\/10\/58.1-400.3","metadata":false},{"id":85449,"structure_id":13460,"section_number":"58.1-400.4","catch_line":"Minimum tax on home service contract providers","url":"\/58.1-400.4\/","token":"58.1\/I\/3\/10\/58.1-400.4","metadata":false},{"id":75981,"structure_id":13460,"section_number":"58.1-401","catch_line":"Exemptions and exclusions","url":"\/58.1-401\/","token":"58.1\/I\/3\/10\/58.1-401","metadata":false},{"id":56970,"structure_id":13460,"section_number":"58.1-402","catch_line":"Virginia taxable income","url":"\/58.1-402\/","token":"58.1\/I\/3\/10\/58.1-402","metadata":false},{"id":65538,"structure_id":13460,"section_number":"58.1-403","catch_line":"Additional modifications to determine Virginia taxable income for certain corporations","url":"\/58.1-403\/","token":"58.1\/I\/3\/10\/58.1-403","metadata":false},{"id":61129,"structure_id":13460,"section_number":"58.1-404","catch_line":"Reserved","url":"\/58.1-404\/","token":"58.1\/I\/3\/10\/58.1-404","metadata":false},{"id":84403,"structure_id":13460,"section_number":"58.1-405","catch_line":"Corporations transacting or conducting entire business within this Commonwealth","url":"\/58.1-405\/","token":"58.1\/I\/3\/10\/58.1-405","metadata":false},{"id":56464,"structure_id":13460,"section_number":"58.1-405.1","catch_line":"Eligibility of companies for apportionment modification; certification by the Virginia Economic Development Partnership Authority","url":"\/58.1-405.1\/","token":"58.1\/I\/3\/10\/58.1-405.1","metadata":false},{"id":56080,"structure_id":13460,"section_number":"58.1-406","catch_line":"Allocation and apportionment of income","url":"\/58.1-406\/","token":"58.1\/I\/3\/10\/58.1-406","metadata":false},{"id":56963,"structure_id":13460,"section_number":"58.1-407","catch_line":"How dividends allocated","url":"\/58.1-407\/","token":"58.1\/I\/3\/10\/58.1-407","metadata":false},{"id":86858,"structure_id":13460,"section_number":"58.1-408","catch_line":"What income apportioned and how","url":"\/58.1-408\/","token":"58.1\/I\/3\/10\/58.1-408","metadata":false},{"id":76197,"structure_id":13460,"section_number":"58.1-409","catch_line":"Property factor","url":"\/58.1-409\/","token":"58.1\/I\/3\/10\/58.1-409","metadata":false},{"id":54428,"structure_id":13460,"section_number":"58.1-410","catch_line":"Valuation of property owned or rented","url":"\/58.1-410\/","token":"58.1\/I\/3\/10\/58.1-410","metadata":false},{"id":80735,"structure_id":13460,"section_number":"58.1-411","catch_line":"Average value of property","url":"\/58.1-411\/","token":"58.1\/I\/3\/10\/58.1-411","metadata":false},{"id":60991,"structure_id":13460,"section_number":"58.1-412","catch_line":"Payroll factor","url":"\/58.1-412\/","token":"58.1\/I\/3\/10\/58.1-412","metadata":false},{"id":65358,"structure_id":13460,"section_number":"58.1-413","catch_line":"When compensation deemed paid or accrued in this Commonwealth","url":"\/58.1-413\/","token":"58.1\/I\/3\/10\/58.1-413","metadata":false},{"id":74292,"structure_id":13460,"section_number":"58.1-414","catch_line":"Sales factor","url":"\/58.1-414\/","token":"58.1\/I\/3\/10\/58.1-414","metadata":false},{"id":78515,"structure_id":13460,"section_number":"58.1-415","catch_line":"When sales of tangible personal property deemed in the Commonwealth","url":"\/58.1-415\/","token":"58.1\/I\/3\/10\/58.1-415","metadata":false},{"id":55363,"structure_id":13460,"section_number":"58.1-416","catch_line":"(Contingent effective date \u2014 See Editor's note) When certain other sales deemed in the Commonwealth","url":"\/58.1-416\/","token":"58.1\/I\/3\/10\/58.1-416","metadata":false},{"id":86205,"structure_id":13460,"section_number":"58.1-417","catch_line":"Motor carriers; 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apportionment","url":"\/58.1-422.1\/","token":"58.1\/I\/3\/10\/58.1-422.1","metadata":false},{"id":61386,"structure_id":13460,"section_number":"58.1-422.2","catch_line":"Apportionment; taxpayers with enterprise data center operations","url":"\/58.1-422.2\/","token":"58.1\/I\/3\/10\/58.1-422.2","metadata":false},{"id":54726,"structure_id":13460,"section_number":"58.1-422.3","catch_line":"Debt buyers; apportionment","url":"\/58.1-422.3\/","token":"58.1\/I\/3\/10\/58.1-422.3","metadata":false},{"id":84482,"structure_id":13460,"section_number":"58.1-422.4","catch_line":"Property information and analytics firms","url":"\/58.1-422.4\/","token":"58.1\/I\/3\/10\/58.1-422.4","metadata":false},{"id":76648,"structure_id":13460,"section_number":"58.1-422.5","catch_line":"(Contingent effective date \u2014 See Editor's note) Internet root infrastructure providers","url":"\/58.1-422.5\/","token":"58.1\/I\/3\/10\/58.1-422.5","metadata":false},{"id":63840,"structure_id":13460,"section_number":"58.1-423","catch_line":"Income tax paid by commercial spaceflight entities","url":"\/58.1-423\/","token":"58.1\/I\/3\/10\/58.1-423","metadata":false}],"previous_section":{"id":56837,"structure_id":13460,"section_number":"58.1-422.1","catch_line":"Retail companies; apportionment","url":"\/58.1-422.1\/","token":"58.1\/I\/3\/10\/58.1-422.1","metadata":false},"next_section":{"id":54726,"structure_id":13460,"section_number":"58.1-422.3","catch_line":"Debt buyers; apportionment","url":"\/58.1-422.3\/","token":"58.1\/I\/3\/10\/58.1-422.3","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/58.1-422.2\/","history_text":"

This law was first created in 2015. The record of its establishment is cataloged in chapters 92<\/a> and 237<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 1 time. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. That modification is as follows: in 2018, chapters 801<\/a> and 802<\/a>.<\/p>","references":[{"id":82086,"section_number":"55.1-306.1","catch_line":"Utility easements; expansion of broadband","order_by":null,"url":"\/55.1-306.1\/"},{"id":84403,"section_number":"58.1-405","catch_line":"Corporations transacting or conducting entire business within this Commonwealth","order_by":null,"url":"\/58.1-405\/"},{"id":56464,"section_number":"58.1-405.1","catch_line":"Eligibility of companies for apportionment modification; certification by the Virginia Economic Development Partnership Authority","order_by":null,"url":"\/58.1-405.1\/"},{"id":86858,"section_number":"58.1-408","catch_line":"What income apportioned and how","order_by":null,"url":"\/58.1-408\/"}],"refers_to":[{"id":56464,"section_number":"58.1-405.1","catch_line":"Eligibility of companies for apportionment modification; certification by the Virginia Economic Development Partnership Authority","order_by":null,"url":"\/58.1-405.1\/"},{"id":56963,"section_number":"58.1-407","catch_line":"How dividends allocated","order_by":null,"url":"\/58.1-407\/"}],"permalink":{"id":253477,"object_type":"law","relational_id":61386,"identifier":"58.1-422.2","token":"58.1\/I\/3\/10\/58.1-422.2","url":"\/58.1-422.2\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/58.1-422.2\/","token":"58.1\/I\/3\/10\/58.1-422.2","dublin_core":{"Title":"Apportionment; taxpayers with enterprise data center operations","Type":"Text","Format":"text\/html","Identifier":"\u00a7 58.1-422.2","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> For taxable years beginning on or after July 1, 2016, the Virginia taxable income of taxpayers<\/span> with enterprise data center operations<\/span>, excluding income allocable under \u00a7 58.1-407<\/a>, shall be apportioned within and without the Commonwealth as follows: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> From July 1, 2016, until July 1, 2017, by multiplying such income by a fraction, the numerator of which is the property factor plus the payroll factor plus quadruple the sales<\/span> factor and the denominator of which is six, except that when the sales<\/span> factor does not exist, the denominator of the fraction shall be the number of existing factors, and when the sales<\/span> factor exists but the payroll factor or property factor does not exist, the denominator of the fraction shall be the number of existing factors plus three; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> From July 1, 2017, and thereafter, by multiplying such income by the sales<\/span> factor. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> As used in this section:\n\t\t\t“Enterprise data center operations<\/span>” means operations that (i) physically house information technology equipment such as servers, switches, routers, data storage devices, or related equipment; (ii) manage and process digital data and information to provide application services or management for data processing, such as web hosting, Internet, intranet, telecommunication, and information technology; (iii) are developed and owned by the taxpayer<\/span>; and (iv) are operated by the taxpayer<\/span> or any of its affiliates substantially for their own use. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The provisions of this section requiring an apportionment formula for taxpayers<\/span> with enterprise data center operations<\/span> shall apply only to taxpayers<\/span> that have entered into a memorandum<\/span> of understanding with the Virginia Economic Development Partnership Authority on or after July 1, 2015, to make a new capital investment of at least $150 million in an enterprise data center in the Commonwealth on or after such date. The apportionment formula under this section shall apply to such taxpayers<\/span> beginning with the taxable year for which the Virginia Economic Development Partnership Authority provides a written certification to the taxpayer<\/span> that the new capital investment has been completed. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The General Assembly of Virginia finds that capital investment in data centers is essential to the continued fiscal health of the Commonwealth. In this modern economy, states often compete for quality data centers. Accordingly, the provisions of subsection C relating to capital investment in enterprise data centers are integral to the purpose of this section. If any provision of this section is for any reason held to be invalid or unconstitutional by the decision of a court<\/span> of competent jurisdiction<\/span>, that provision shall not be deemed severable. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> Any eligible company, as defined in § 58.1-405.1<\/a>, that apportions its income pursuant to this section may subtract the value of its sales<\/span> in the Commonwealth during the taxable year from the numerator of the ratio in subdivision A 2. Such eligible company may make such modification for the taxable year in which it first becomes eligible and for the six subsequent, consecutive taxable years, except for any year in which the eligible company’s (i) total, cumulative new capital investment falls below the applicable initial threshold or (ii) number of new jobs falls below the applicable initial threshold. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nAPPORTIONMENT; TAXPAYERS WITH ENTERPRISE DATA CENTER OPERATIONS (\u00a7 58.1-422.2)\n\nA. For taxable years beginning on or after July 1, 2016, the Virginia taxable\nincome of taxpayers with enterprise data center operations, excluding income\nallocable under \u00a7 58.1-407, shall be apportioned within and without the\nCommonwealth as follows:\n\n 1. From July 1, 2016, until July 1, 2017, by multiplying such income by a\n fraction, the numerator of which is the property factor plus the payroll\n factor plus quadruple the sales factor and the denominator of which is six,\n except that when the sales factor does not exist, the denominator of the\n fraction shall be the number of existing factors, and when the sales factor\n exists but the payroll factor or property factor does not exist, the\n denominator of the fraction shall be the number of existing factors plus\n three; and\n\n 2. From July 1, 2017, and thereafter, by multiplying such income by the sales\n factor.\n\nB. As used in this section:\n\t\t\t“Enterprise data center operations” means operations that (i)\nphysically house information technology equipment such as servers, switches,\nrouters, data storage devices, or related equipment; (ii) manage and process\ndigital data and information to provide application services or management for\ndata processing, such as web hosting, Internet, intranet, telecommunication, and\ninformation technology; (iii) are developed and owned by the taxpayer; and (iv)\nare operated by the taxpayer or any of its affiliates substantially for their\nown use.\n\nC. The provisions of this section requiring an apportionment formula for\ntaxpayers with enterprise data center operations shall apply only to taxpayers\nthat have entered into a memorandum of understanding with the Virginia Economic\nDevelopment Partnership Authority on or after July 1, 2015, to make a new\ncapital investment of at least $150 million in an enterprise data center in the\nCommonwealth on or after such date. The apportionment formula under this section\nshall apply to such taxpayers beginning with the taxable year for which the\nVirginia Economic Development Partnership Authority provides a written\ncertification to the taxpayer that the new capital investment has been\ncompleted.\n\nD. The General Assembly of Virginia finds that capital investment in data\ncenters is essential to the continued fiscal health of the Commonwealth. In this\nmodern economy, states often compete for quality data centers. Accordingly, the\nprovisions of subsection C relating to capital investment in enterprise data\ncenters are integral to the purpose of this section. If any provision of this\nsection is for any reason held to be invalid or unconstitutional by the decision\nof a court of competent jurisdiction, that provision shall not be deemed\nseverable.\n\nE. Any eligible company, as defined in § 58.1-405.1, that apportions its\nincome pursuant to this section may subtract the value of its sales in the\nCommonwealth during the taxable year from the numerator of the ratio in\nsubdivision A 2. Such eligible company may make such modification for the\ntaxable year in which it first becomes eligible and for the six subsequent,\nconsecutive taxable years, except for any year in which the eligible\ncompany’s (i) total, cumulative new capital investment falls below the\napplicable initial threshold or (ii) number of new jobs falls below the\napplicable initial threshold.\n\nHISTORY: 2015, cc. 92, 237; 2018, cc. 801, 802.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}