{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/58.1-422.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/58.1-422.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/58.1-422.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/58.1-422.html"}],"law_id":75896,"edition_id":1,"section_id":75896,"structure_id":13460,"section_number":"58.1-422","catch_line":"Manufacturing companies; apportionment","history":"2009, c. 821; 2012, c. 427; 2018, cc. 801, 802.","full_text":"A\n\nFor taxable years beginning on or after July 1, 2011, the Virginia taxable income of a manufacturing company, excluding income allocable under \u00a7 58.1-407, may be apportioned within and without the Commonwealth as provided in \u00a7 58.1-408 or as follows:1\n\nFrom July 1, 2011, until July 1, 2013, by multiplying such income by a fraction, the numerator of which is the property factor plus the payroll factor plus triple the sales factor and the denominator of which is five, except 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 two;2\n\nFrom July 1, 2013, until July 1, 2014, 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 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; and3\n\nFrom July 1, 2014, and thereafter, by multiplying such income by the sales factor.B\n\nIf the taxpayer makes one or more of the elections described in subdivision A 1, A 2, or A 3, the taxpayer may not revoke the election for a period of three taxable years.\n\t\t\tIn addition, the taxpayer shall certify to the Department that the average weekly wage of its full-time employees is greater than the lower of the state or local average weekly wages for the taxpayer’s industry.C\n\nIf the average annual number of full-time employees of a manufacturing company for the first three taxable years (in which the manufacturing company used the alternative apportionment set forth in this section) is less than 90 percent of the base year employment, or the average wage of its full-time employees as certified by the taxpayer is not greater than the lower of the state or local average weekly wage, then the Department of Taxation shall assess the manufacturing company with additional taxes pursuant to this article computed as the difference between (i) the taxes that would have been due under the apportionment formula provided under § 58.1-408 for such three taxable years, minus (ii) the taxes due under the alternative apportionment provided under this section for such three taxable years. Interest shall accrue and shall be assessed on such additional taxes at the rate prescribed under § 58.1-15, with such interest accruing from the original due date for filing of the income tax return to the date of payment of such additional taxes.\n\t\t\tSuch additional taxes and interest are hereby imposed on manufacturing companies using the alternative apportionment set forth in this section.D\n\nAs used in this section, unless the context requires another meaning:\n\t\t\t“Base year employment” means the average number of full-time employees employed by the manufacturing company in the Commonwealth in the taxable year that ended immediately prior to the first taxable year in which the manufacturing company used the alternative apportionment set forth in this section.\n\t\t\t“Full-time employee” means an employee of a manufacturing company who is employed for an indefinite duration in the Commonwealth for which the standard fringe benefits are paid by the manufacturing company, for which employment requires a minimum of either (i) 35 hours of an employee’s time per week for the entire normal year of such manufacturing company’s operations, which “normal year” shall consist of at least 48 weeks, or (ii) 1,680 hours per year.\n\t\t\t“Manufacturing company” means a domestic or foreign corporation primarily engaged in activities that, in accordance with the North American Industrial Classification System (NAICS), United States Manual, United States Office of Management and Budget, 1997 Edition, would be included in Sector 11, 31, 32, or 33.E\n\nThe General Assembly of Virginia finds that job creation is essential to the continued fiscal health of the Commonwealth. In this modern economy, states often compete for quality manufacturing jobs. Accordingly, the provisions of this section relating to manufacturing companies that increase their employment in Virginia are integral to the purpose of the election allowed pursuant to 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.F\n\nAny eligible company, as defined in § 58.1-405.1, that elects to apportion its income pursuant to subsection A may subtract the value of its sales in the Commonwealth during the taxable year from the numerator of the ratio in subdivision A 3. 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":272495,"text":"For taxable years beginning on or after July 1, 2011, the Virginia taxable income of a manufacturing company, excluding income allocable under \u00a7 58.1-407, may be apportioned within and without the Commonwealth as provided in \u00a7 58.1-408 or as follows:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":272496,"text":"From July 1, 2011, until July 1, 2013, by multiplying such income by a fraction, the numerator of which is the property factor plus the payroll factor plus triple the sales factor and the denominator of which is five, except 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 two;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":272497,"text":"From July 1, 2013, until July 1, 2014, 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 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","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":272498,"text":"From July 1, 2014, and thereafter, by multiplying such income by the sales factor.","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"B"},"4":{"id":272499,"text":"If the taxpayer makes one or more of the elections described in subdivision A 1, A 2, or A 3, the taxpayer may not revoke the election for a period of three taxable years.\n\t\t\tIn addition, the taxpayer shall certify to the Department that the average weekly wage of its full-time employees is greater than the lower of the state or local average weekly wages for the taxpayer’s industry.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A3","next_prefix":"C"},"5":{"id":272500,"text":"If the average annual number of full-time employees of a manufacturing company for the first three taxable years (in which the manufacturing company used the alternative apportionment set forth in this section) is less than 90 percent of the base year employment, or the average wage of its full-time employees as certified by the taxpayer is not greater than the lower of the state or local average weekly wage, then the Department of Taxation shall assess the manufacturing company with additional taxes pursuant to this article computed as the difference between (i) the taxes that would have been due under the apportionment formula provided under § 58.1-408 for such three taxable years, minus (ii) the taxes due under the alternative apportionment provided under this section for such three taxable years. Interest shall accrue and shall be assessed on such additional taxes at the rate prescribed under § 58.1-15, with such interest accruing from the original due date for filing of the income tax return to the date of payment of such additional taxes.\n\t\t\tSuch additional taxes and interest are hereby imposed on manufacturing companies using the alternative apportionment set forth in this section.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"6":{"id":272501,"text":"As used in this section, unless the context requires another meaning:\n\t\t\t“Base year employment” means the average number of full-time employees employed by the manufacturing company in the Commonwealth in the taxable year that ended immediately prior to the first taxable year in which the manufacturing company used the alternative apportionment set forth in this section.\n\t\t\t“Full-time employee” means an employee of a manufacturing company who is employed for an indefinite duration in the Commonwealth for which the standard fringe benefits are paid by the manufacturing company, for which employment requires a minimum of either (i) 35 hours of an employee’s time per week for the entire normal year of such manufacturing company’s operations, which “normal year” shall consist of at least 48 weeks, or (ii) 1,680 hours per year.\n\t\t\t“Manufacturing company” means a domestic or foreign corporation primarily engaged in activities that, in accordance with the North American Industrial Classification System (NAICS), United States Manual, United States Office of Management and Budget, 1997 Edition, would be included in Sector 11, 31, 32, or 33.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"7":{"id":272502,"text":"The General Assembly of Virginia finds that job creation is essential to the continued fiscal health of the Commonwealth. In this modern economy, states often compete for quality manufacturing jobs. Accordingly, the provisions of this section relating to manufacturing companies that increase their employment in Virginia are integral to the purpose of the election allowed pursuant to 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":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"8":{"id":272503,"text":"Any eligible company, as defined in § 58.1-405.1, that elects to apportion its income pursuant to subsection A may subtract the value of its sales in the Commonwealth during the taxable year from the numerator of the ratio in subdivision A 3. 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":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E"}},"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; apportionment","url":"\/58.1-417\/","token":"58.1\/I\/3\/10\/58.1-417","metadata":false},{"id":71471,"structure_id":13460,"section_number":"58.1-418","catch_line":"Financial corporations; apportionment","url":"\/58.1-418\/","token":"58.1\/I\/3\/10\/58.1-418","metadata":false},{"id":87267,"structure_id":13460,"section_number":"58.1-419","catch_line":"Construction corporations; apportionment","url":"\/58.1-419\/","token":"58.1\/I\/3\/10\/58.1-419","metadata":false},{"id":61390,"structure_id":13460,"section_number":"58.1-420","catch_line":"Railway companies; apportionment","url":"\/58.1-420\/","token":"58.1\/I\/3\/10\/58.1-420","metadata":false},{"id":54421,"structure_id":13460,"section_number":"58.1-421","catch_line":"Alternative method of allocation","url":"\/58.1-421\/","token":"58.1\/I\/3\/10\/58.1-421","metadata":false},{"id":75896,"structure_id":13460,"section_number":"58.1-422","catch_line":"Manufacturing companies; apportionment","url":"\/58.1-422\/","token":"58.1\/I\/3\/10\/58.1-422","metadata":false},{"id":56837,"structure_id":13460,"section_number":"58.1-422.1","catch_line":"Retail companies; 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apportionment","url":"\/58.1-422.1\/","token":"58.1\/I\/3\/10\/58.1-422.1","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/58.1-422\/","history_text":"

This law was first created in 2009. The record of its establishment is cataloged in chapter 821<\/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 2 times. 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. Those modifications are as follows: in 2012, chapter 427<\/a>; in 2018, chapters 801<\/a> and 802<\/a>.<\/p>","references":[{"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":77006,"section_number":"58.1-15","catch_line":"Rate of interest","order_by":null,"url":"\/58.1-15\/"},{"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\/"},{"id":86858,"section_number":"58.1-408","catch_line":"What income apportioned and how","order_by":null,"url":"\/58.1-408\/"}],"permalink":{"id":253469,"object_type":"law","relational_id":75896,"identifier":"58.1-422","token":"58.1\/I\/3\/10\/58.1-422","url":"\/58.1-422\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/58.1-422\/","token":"58.1\/I\/3\/10\/58.1-422","dublin_core":{"Title":"Manufacturing companies; apportionment","Type":"Text","Format":"text\/html","Identifier":"\u00a7 58.1-422","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> For taxable years beginning on or after July 1, 2011, the Virginia taxable income of a manufacturing company<\/span>, excluding income allocable under \u00a7 58.1-407<\/a>, may be apportioned within and without the Commonwealth as provided in \u00a7 58.1-408<\/a> or as follows: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> From July 1, 2011, until July 1, 2013, by multiplying such income by a fraction, the numerator of which is the property factor plus the payroll factor plus triple the sales<\/span> factor and the denominator of which is five, except 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 two; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> From July 1, 2013, until July 1, 2014, 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 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

3.<\/span> From July 1, 2014, and thereafter, by multiplying such income by the sales<\/span> factor. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> If the taxpayer<\/span> makes one or more of the elections described in subdivision A 1, A 2, or A 3, the taxpayer<\/span> may not revoke the election for a period of three taxable years.\n\t\t\tIn addition, the taxpayer<\/span> shall certify to the Department<\/span> that the average weekly wage of its full-time employees<\/span> is greater than the lower of the state or local average weekly wages for the taxpayer<\/span>’s industry. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> If the average annual number of full-time employees<\/span> of a manufacturing company<\/span> for the first three taxable years (in which the manufacturing company<\/span> used the alternative apportionment set forth in this section) is less than 90 percent of the base year employment<\/span>, or the average wage of its full-time employees<\/span> as certified by the taxpayer<\/span> is not greater than the lower of the state or local average weekly wage, then the Department<\/span> of Taxation shall assess the manufacturing company<\/span> with additional taxes pursuant to this article computed as the difference between (i) the taxes that would have been due under the apportionment formula provided under § 58.1-408<\/a> for such three taxable years, minus (ii) the taxes due under the alternative apportionment provided under this section for such three taxable years. Interest shall accrue and shall be assessed on such additional taxes at the rate prescribed under § 58.1-15<\/a>, with such interest accruing from the original due date for filing of the income tax return to the date of payment of such additional taxes.\n\t\t\tSuch additional taxes and interest are hereby imposed on manufacturing companies using the alternative apportionment set forth in this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> As used in this section, unless the context requires another meaning:\n\t\t\t“Base year employment<\/span>” means the average number of full-time employees<\/span> employed by the manufacturing company<\/span> in the Commonwealth in the taxable year that ended immediately prior to the first taxable year in which the manufacturing company<\/span> used the alternative apportionment set forth in this section.\n\t\t\t“Full-time employee<\/span>” means an employee of a manufacturing company<\/span> who is employed for an indefinite duration in the Commonwealth for which the standard fringe benefits are paid by the manufacturing company<\/span>, for which employment requires a minimum of either (i) 35 hours of an employee’s time per week for the entire normal year<\/span> of such manufacturing company<\/span>’s operations, which “normal year<\/span>” shall consist of at least 48 weeks, or (ii) 1,680 hours per year.\n\t\t\t“Manufacturing company<\/span>” means a domestic or foreign corporation<\/span> primarily engaged in activities that, in accordance with the North American Industrial Classification System (NAICS), United States Manual, United States Office of Management and Budget, 1997 Edition, would be included in Sector 11, 31, 32, or 33. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The General Assembly of Virginia finds that job creation is essential to the continued fiscal health of the Commonwealth. In this modern economy, states often compete for quality manufacturing jobs. Accordingly, the provisions of this section relating to manufacturing companies that increase their employment in Virginia are integral to the purpose of the election allowed pursuant to 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

F.<\/span> Any eligible company, as defined in § 58.1-405.1<\/a>, that elects to apportion its income pursuant to subsection A may subtract the value of its sales<\/span> in the Commonwealth during the taxable year from the numerator of the ratio in subdivision A 3. 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\nMANUFACTURING COMPANIES; APPORTIONMENT (\u00a7 58.1-422)\n\nA. For taxable years beginning on or after July 1, 2011, the Virginia taxable\nincome of a manufacturing company, excluding income allocable under \u00a7 58.1-407,\nmay be apportioned within and without the Commonwealth as provided in \u00a7\n58.1-408 or as follows:\n\n 1. From July 1, 2011, until July 1, 2013, by multiplying such income by a\n fraction, the numerator of which is the property factor plus the payroll\n factor plus triple the sales factor and the denominator of which is five,\n except when the sales factor does not exist, the denominator of the fraction\n shall be the number of existing factors, and when the sales factor exists but\n the payroll factor or property factor does not exist, the denominator of the\n fraction shall be the number of existing factors plus two;\n\n 2. From July 1, 2013, until July 1, 2014, 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 when the sales factor does not exist, the denominator of the fraction\n shall be the number of existing factors, and when the sales factor exists but\n the payroll factor or property factor does not exist, the denominator of the\n fraction shall be the number of existing factors plus three; and\n\n 3. From July 1, 2014, and thereafter, by multiplying such income by the sales\n factor.\n\nB. If the taxpayer makes one or more of the elections described in subdivision A\n1, A 2, or A 3, the taxpayer may not revoke the election for a period of three\ntaxable years.\n\t\t\tIn addition, the taxpayer shall certify to the Department that the average\nweekly wage of its full-time employees is greater than the lower of the state or\nlocal average weekly wages for the taxpayer’s industry.\n\nC. If the average annual number of full-time employees of a manufacturing\ncompany for the first three taxable years (in which the manufacturing company\nused the alternative apportionment set forth in this section) is less than 90\npercent of the base year employment, or the average wage of its full-time\nemployees as certified by the taxpayer is not greater than the lower of the\nstate or local average weekly wage, then the Department of Taxation shall assess\nthe manufacturing company with additional taxes pursuant to this article\ncomputed as the difference between (i) the taxes that would have been due under\nthe apportionment formula provided under § 58.1-408 for such three taxable\nyears, minus (ii) the taxes due under the alternative apportionment provided\nunder this section for such three taxable years. Interest shall accrue and shall\nbe assessed on such additional taxes at the rate prescribed under §\n58.1-15, with such interest accruing from the original due date for filing of\nthe income tax return to the date of payment of such additional taxes.\n\t\t\tSuch additional taxes and interest are hereby imposed on manufacturing\ncompanies using the alternative apportionment set forth in this section.\n\nD. As used in this section, unless the context requires another meaning:\n\t\t\t“Base year employment” means the average number of full-time\nemployees employed by the manufacturing company in the Commonwealth in the\ntaxable year that ended immediately prior to the first taxable year in which the\nmanufacturing company used the alternative apportionment set forth in this\nsection.\n\t\t\t“Full-time employee” means an employee of a manufacturing company\nwho is employed for an indefinite duration in the Commonwealth for which the\nstandard fringe benefits are paid by the manufacturing company, for which\nemployment requires a minimum of either (i) 35 hours of an employee’s time\nper week for the entire normal year of such manufacturing company’s\noperations, which “normal year” shall consist of at least 48 weeks,\nor (ii) 1,680 hours per year.\n\t\t\t“Manufacturing company” means a domestic or foreign corporation\nprimarily engaged in activities that, in accordance with the North American\nIndustrial Classification System (NAICS), United States Manual, United States\nOffice of Management and Budget, 1997 Edition, would be included in Sector 11,\n31, 32, or 33.\n\nE. The General Assembly of Virginia finds that job creation is essential to the\ncontinued fiscal health of the Commonwealth. In this modern economy, states\noften compete for quality manufacturing jobs. Accordingly, the provisions of\nthis section relating to manufacturing companies that increase their employment\nin Virginia are integral to the purpose of the election allowed pursuant to this\nsection. If any provision of this section is for any reason held to be invalid\nor unconstitutional by the decision of a court of competent jurisdiction, that\nprovision shall not be deemed severable.\n\nF. Any eligible company, as defined in § 58.1-405.1, that elects to\napportion its income pursuant to subsection A may subtract the value of its\nsales in the Commonwealth during the taxable year from the numerator of the\nratio in subdivision A 3. Such eligible company may make such modification for\nthe taxable 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: 2009, c. 821; 2012, c. 427; 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}}