{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/58.1-439.12_06.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/58.1-439.12_06.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/58.1-439.12_06.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/58.1-439.12_06.html"}],"law_id":66012,"edition_id":1,"section_id":66012,"structure_id":13153,"section_number":"58.1-439.12:06","catch_line":"International trade facility tax credit","history":"2011, c. 49; 2012, cc. 846, 849; 2014, c. 423; 2016, c. 69; 2021, Sp. Sess. I, c. 373.","full_text":"A\n\nAs used in this section, unless the context requires a different meaning:\n\t\t\t“Affiliated companies” means two or more companies related to each other so that (i) one company owns at least 80 percent of the voting power of the other or others or (ii) the same interest owns at least 80 percent of the voting power of two or more companies.\n\t\t\t“Capital investment” means the amount properly chargeable to a capital account for improvements to rehabilitate or expand depreciable real property placed in service during the taxable year and the cost of machinery, tools, and equipment used in an international trade facility directly related to the movement of cargo. Capital investment includes expenditures associated with any exterior, structural, mechanical, or electrical improvements necessary to expand or rehabilitate a building for commercial or industrial use and excavations, grading, paving, driveways, roads, sidewalks, landscaping, or other land improvements. For purposes of this section, machinery, tools, and equipment shall be deemed to include only that property placed in service by the international trade facility on and after January 1, 2011. Machinery, tools, and equipment excludes property (i) for which a credit under this section was previously granted; (ii) placed in service by the taxpayer, a related party as defined in \u00a7 267(b) of the Internal Revenue Code, as amended, or by a trade or business under common control as defined in \u00a7 52(b) of the Internal Revenue Code, as amended; or (iii) previously in service in the Commonwealth that has a basis in the hands of the person acquiring it, determined in whole or in part by reference to the basis of such property in the hands of the person from whom acquired or \u00a7 1014(a) of the Internal Revenue Code, as amended.\n\t\t\t“Capital investment” shall not include:1\n\nThe cost of acquiring any real property or building;2\n\nThe cost of furnishings;3\n\nAny expenditure associated with appraisal, architectural, engineering, or interior design fees;4\n\nLoan fees, points, or capitalized interest;5\n\nLegal, accounting, realtor, sales and marketing, or other professional fees;6\n\nClosing costs, permit fees, user fees, zoning fees, impact fees, and inspection fees;7\n\nBids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities costs incurred during construction;8\n\nUtility hook-up or access fees;9\n\nOutbuildings; or10\n\nThe cost of any well or septic system.\n\t\t\t\t“Credit year” means the first taxable year following the taxable year in which the international trade facility commenced or expanded its operations. A separate credit year and a three-year allowance shall exist for each distinct international trade facility of a single taxpayer.\n\t\t\t\t“International trade facility” means a company that:1\n\nIs engaged in port-related activities, including, but not limited to, warehousing, distribution, freight forwarding and handling, and goods processing;2\n\nUses maritime port facilities located in the Commonwealth; and3\n\nTransports at least five percent more cargo through maritime port facilities in the Commonwealth during the taxable year than was transported by the company through such facilities during the preceding taxable year.\n\t\t\t\t“New, permanent full-time position” means a job of indefinite duration, created by the company after establishing or expanding an international trade facility in the Commonwealth, requiring a minimum of 35 hours of employment per week for each employee for the entire normal year of the company’s operations, or a position of indefinite duration that requires a minimum of 35 hours of employment per week for each employee for the portion of the taxable year in which the employee was initially hired for, or transferred to, the international trade facility in the Commonwealth. Seasonal or temporary positions, or a job created when a job function is shifted from an existing location in the Commonwealth to the international trade facility, and positions in building and grounds maintenance, security, and other such positions that are ancillary to the principal activities performed by the employees at the international trade facility shall not qualify as new, permanent full-time positions.\n\t\t\t\t“Normal year” means at least 48 weeks in a calendar year.\n\t\t\t\t“Qualified full-time employee” means an employee filling a new, permanent full-time position in an international trade facility in the Commonwealth.\n\t\t\t\t“Qualified trade activities” means the completed exportation or importation of at least (i) one International Organization for Standardization ocean container with a minimum 20-foot length, (ii) 16 tons of noncontainerized cargo, or (iii) one unit of roll-on\/roll-off cargo through any publicly or privately owned cargo facility located within the Commonwealth through which cargo is transported. Export cargo must be loaded on a barge or ocean-going vessel and import cargo must be discharged from a barge or ocean-going vessel at such facility.B\n\nFor taxable years beginning on and after January 1, 2011, but before January 1, 2025, a taxpayer satisfying the requirements of this section shall be allowed a credit against the taxes imposed by Articles 2 (§ 58.1-320 et seq.) and 10 (§ 58.1-400 et seq.). The amount of the credit earned pursuant to this section shall be equal to either (i) $3,500 per qualified full-time employee that results from increased qualified trade activities by the taxpayer or (ii) an amount equal to two percent of the capital investment made by the taxpayer to facilitate the increased qualified trade activities. The election of which tax credit amount to claim shall be the responsibility of the taxpayer. Both tax credits shall not be claimed for the same activities that occur in a calendar year. The portion of the $3,500 credit earned with respect to any qualified full-time employee who works in the Commonwealth for less than 12 full months during the credit year shall be determined by multiplying the credit amount by a fraction, the numerator of which is the number of full months such employee worked for the international trade facility in the Commonwealth during the credit year and the denominator of which is 12.C\n\nThe Tax Commissioner shall issue tax credits under this section, and in no case shall the Tax Commissioner issue more than $1,250,000 in tax credits pursuant to this section in any fiscal year of the Commonwealth. If the amount of tax credits requested under this section for any taxable year exceeds $1,250,000, such credits shall be allocated proportionately among all qualified taxpayers. The Tax Commissioner shall not issue tax credits under this section subsequent to the Commonwealth’s fiscal year ending on June 30, 2025. The taxpayer shall not be allowed to claim any tax credit under this section unless it has applied to the Department for the tax credit and the Department has approved the credit. The Department shall determine the credit amount allowable for the taxable year and shall provide a written certification to the taxpayer, which certification shall report the amount of the tax credit approved by the Department. The taxpayer shall attach the certification to the applicable income tax return.D\n\nThe amount of the credit allowed pursuant to this section shall not exceed 50 percent of the tax imposed for the taxable year. Any remaining credit amount may be carried forward for the next 10 taxable years. In the event a taxpayer who is subject to the limitation imposed pursuant to this subsection is allowed a different tax credit pursuant to another section of the Code, or has a credit carry forward from a preceding taxable year, such taxpayer shall be considered to have first utilized any credit that does not have a carry forward provision, and then any credit carried forward from a preceding taxable year, before using any of the credit allowed pursuant to this section.E\n\nNo credit shall be earned for any employee (i) for whom a credit under this section was previously earned by a related party as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; (ii) who was previously employed in the same job function in Virginia by a related party as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; (iii) whose job function was previously performed at a different location in Virginia by an employee of the taxpayer, by a related party as defined in § 267(b) of the Internal Revenue Code, as amended, or by a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; or (iv) whose job function previously qualified for a credit under this section at a different major business facility, as defined in subsection C of § 58.1-439, on behalf of the taxpayer, by a related party as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended.F\n\nFor purposes of this section, the amount of any credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company shall be allocated to the individual partners, shareholders, or members, respectively, in proportion to their ownership or interest in such business entities.G\n\nFor purposes of this section, two or more affiliated companies may elect to aggregate the number of jobs created for qualified full-time employees or the amounts of capital investments as the result of the establishment or expansion by the individual companies in order to qualify for the credit allowed herein.H\n\nRecapture of the credit amount, under the following circumstances, shall be accomplished by increasing the tax in any of the five years succeeding the taxable year in which a credit has been earned pursuant to this section if the number of qualified full-time employees falls below the average number of qualified full-time employees during the taxable year. The tax increase amount shall be determined by (i) recalculating the credit that would have been earned for the original taxable year using the decreased number of qualified full-time employees and (ii) subtracting the recalculated credit amount from the amount previously earned. In the event that the average number of qualified full-time employees employed at an international trade facility falls below the number employed by the taxpayer prior to claiming any credits pursuant to this section in any of the five taxable years succeeding the year in which the credits were earned, all credits earned with respect to the international trade facility shall be recaptured. No credit amount shall be recaptured more than once pursuant to this subsection. Any recapture pursuant to this subsection shall reduce credits earned but not yet allowed, and credits allowed but carried forward, before the taxpayer’s tax liability is increased.I\n\nNotwithstanding the provisions of § 58.1-3, the Department of Taxation shall annually provide information to the Virginia Port Authority related to tax credits issued pursuant to this section.J\n\nThe Tax Commissioner shall issue guidelines that are necessary and desirable to carry out the provisions of this section, including (i) the computation, carryover, and recapture of the credits provided under this section; (ii) the establishment of criteria for (a) international trade facilities, (b) qualified full-time employees at such facilities, and (c) capital investments; and (iii) the computation, carryover, recapture, and redemption of the credit by affiliated companies. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).","order_by":null,"text":{"0":{"id":239845,"text":"As used in this section, unless the context requires a different meaning:\n\t\t\t“Affiliated companies” means two or more companies related to each other so that (i) one company owns at least 80 percent of the voting power of the other or others or (ii) the same interest owns at least 80 percent of the voting power of two or more companies.\n\t\t\t“Capital investment” means the amount properly chargeable to a capital account for improvements to rehabilitate or expand depreciable real property placed in service during the taxable year and the cost of machinery, tools, and equipment used in an international trade facility directly related to the movement of cargo. Capital investment includes expenditures associated with any exterior, structural, mechanical, or electrical improvements necessary to expand or rehabilitate a building for commercial or industrial use and excavations, grading, paving, driveways, roads, sidewalks, landscaping, or other land improvements. For purposes of this section, machinery, tools, and equipment shall be deemed to include only that property placed in service by the international trade facility on and after January 1, 2011. Machinery, tools, and equipment excludes property (i) for which a credit under this section was previously granted; (ii) placed in service by the taxpayer, a related party as defined in \u00a7 267(b) of the Internal Revenue Code, as amended, or by a trade or business under common control as defined in \u00a7 52(b) of the Internal Revenue Code, as amended; or (iii) previously in service in the Commonwealth that has a basis in the hands of the person acquiring it, determined in whole or in part by reference to the basis of such property in the hands of the person from whom acquired or \u00a7 1014(a) of the Internal Revenue Code, as amended.\n\t\t\t“Capital investment” shall not include:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":239846,"text":"The cost of acquiring any real property or building;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":239847,"text":"The cost of furnishings;","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":239848,"text":"Any expenditure associated with appraisal, architectural, engineering, or interior design fees;","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"A4"},"4":{"id":239849,"text":"Loan fees, points, or capitalized interest;","type":"section","prefixes":["A","4"],"prefix":"4","entire_prefix":"A4","prefix_anchor":"A4","level":2,"prior_prefix":"A3","next_prefix":"A5"},"5":{"id":239850,"text":"Legal, accounting, realtor, sales and marketing, or other professional fees;","type":"section","prefixes":["A","5"],"prefix":"5","entire_prefix":"A5","prefix_anchor":"A5","level":2,"prior_prefix":"A4","next_prefix":"A6"},"6":{"id":239851,"text":"Closing costs, permit fees, user fees, zoning fees, impact fees, and inspection fees;","type":"section","prefixes":["A","6"],"prefix":"6","entire_prefix":"A6","prefix_anchor":"A6","level":2,"prior_prefix":"A5","next_prefix":"A7"},"7":{"id":239852,"text":"Bids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities costs incurred during construction;","type":"section","prefixes":["A","7"],"prefix":"7","entire_prefix":"A7","prefix_anchor":"A7","level":2,"prior_prefix":"A6","next_prefix":"A8"},"8":{"id":239853,"text":"Utility hook-up or access fees;","type":"section","prefixes":["A","8"],"prefix":"8","entire_prefix":"A8","prefix_anchor":"A8","level":2,"prior_prefix":"A7","next_prefix":"A9"},"9":{"id":239854,"text":"Outbuildings; or","type":"section","prefixes":["A","9"],"prefix":"9","entire_prefix":"A9","prefix_anchor":"A9","level":2,"prior_prefix":"A8","next_prefix":"A10"},"10":{"id":239855,"text":"The cost of any well or septic system.\n\t\t\t\t“Credit year” means the first taxable year following the taxable year in which the international trade facility commenced or expanded its operations. A separate credit year and a three-year allowance shall exist for each distinct international trade facility of a single taxpayer.\n\t\t\t\t“International trade facility” means a company that:","type":"section","prefixes":["A","10"],"prefix":"10","entire_prefix":"A10","prefix_anchor":"A10","level":2,"prior_prefix":"A9","next_prefix":"A1"},"11":{"id":239856,"text":"Is engaged in port-related activities, including, but not limited to, warehousing, distribution, freight forwarding and handling, and goods processing;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A10","next_prefix":"A2"},"12":{"id":239857,"text":"Uses maritime port facilities located in the Commonwealth; and","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"13":{"id":239858,"text":"Transports at least five percent more cargo through maritime port facilities in the Commonwealth during the taxable year than was transported by the company through such facilities during the preceding taxable year.\n\t\t\t\t“New, permanent full-time position” means a job of indefinite duration, created by the company after establishing or expanding an international trade facility in the Commonwealth, requiring a minimum of 35 hours of employment per week for each employee for the entire normal year of the company’s operations, or a position of indefinite duration that requires a minimum of 35 hours of employment per week for each employee for the portion of the taxable year in which the employee was initially hired for, or transferred to, the international trade facility in the Commonwealth. Seasonal or temporary positions, or a job created when a job function is shifted from an existing location in the Commonwealth to the international trade facility, and positions in building and grounds maintenance, security, and other such positions that are ancillary to the principal activities performed by the employees at the international trade facility shall not qualify as new, permanent full-time positions.\n\t\t\t\t“Normal year” means at least 48 weeks in a calendar year.\n\t\t\t\t“Qualified full-time employee” means an employee filling a new, permanent full-time position in an international trade facility in the Commonwealth.\n\t\t\t\t“Qualified trade activities” means the completed exportation or importation of at least (i) one International Organization for Standardization ocean container with a minimum 20-foot length, (ii) 16 tons of noncontainerized cargo, or (iii) one unit of roll-on\/roll-off cargo through any publicly or privately owned cargo facility located within the Commonwealth through which cargo is transported. Export cargo must be loaded on a barge or ocean-going vessel and import cargo must be discharged from a barge or ocean-going vessel at such facility.","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"B"},"14":{"id":239859,"text":"For taxable years beginning on and after January 1, 2011, but before January 1, 2025, a taxpayer satisfying the requirements of this section shall be allowed a credit against the taxes imposed by Articles 2 (§ 58.1-320 et seq.) and 10 (§ 58.1-400 et seq.). The amount of the credit earned pursuant to this section shall be equal to either (i) $3,500 per qualified full-time employee that results from increased qualified trade activities by the taxpayer or (ii) an amount equal to two percent of the capital investment made by the taxpayer to facilitate the increased qualified trade activities. The election of which tax credit amount to claim shall be the responsibility of the taxpayer. Both tax credits shall not be claimed for the same activities that occur in a calendar year. The portion of the $3,500 credit earned with respect to any qualified full-time employee who works in the Commonwealth for less than 12 full months during the credit year shall be determined by multiplying the credit amount by a fraction, the numerator of which is the number of full months such employee worked for the international trade facility in the Commonwealth during the credit year and the denominator of which is 12.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A3","next_prefix":"C"},"15":{"id":239860,"text":"The Tax Commissioner shall issue tax credits under this section, and in no case shall the Tax Commissioner issue more than $1,250,000 in tax credits pursuant to this section in any fiscal year of the Commonwealth. If the amount of tax credits requested under this section for any taxable year exceeds $1,250,000, such credits shall be allocated proportionately among all qualified taxpayers. The Tax Commissioner shall not issue tax credits under this section subsequent to the Commonwealth’s fiscal year ending on June 30, 2025. The taxpayer shall not be allowed to claim any tax credit under this section unless it has applied to the Department for the tax credit and the Department has approved the credit. The Department shall determine the credit amount allowable for the taxable year and shall provide a written certification to the taxpayer, which certification shall report the amount of the tax credit approved by the Department. The taxpayer shall attach the certification to the applicable income tax return.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"16":{"id":239861,"text":"The amount of the credit allowed pursuant to this section shall not exceed 50 percent of the tax imposed for the taxable year. Any remaining credit amount may be carried forward for the next 10 taxable years. In the event a taxpayer who is subject to the limitation imposed pursuant to this subsection is allowed a different tax credit pursuant to another section of the Code, or has a credit carry forward from a preceding taxable year, such taxpayer shall be considered to have first utilized any credit that does not have a carry forward provision, and then any credit carried forward from a preceding taxable year, before using any of the credit allowed pursuant to this section.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"17":{"id":239862,"text":"No credit shall be earned for any employee (i) for whom a credit under this section was previously earned by a related party as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; (ii) who was previously employed in the same job function in Virginia by a related party as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; (iii) whose job function was previously performed at a different location in Virginia by an employee of the taxpayer, by a related party as defined in § 267(b) of the Internal Revenue Code, as amended, or by a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; or (iv) whose job function previously qualified for a credit under this section at a different major business facility, as defined in subsection C of § 58.1-439, on behalf of the taxpayer, by a related party as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"18":{"id":239863,"text":"For purposes of this section, the amount of any credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company shall be allocated to the individual partners, shareholders, or members, respectively, in proportion to their ownership or interest in such business entities.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"19":{"id":239864,"text":"For purposes of this section, two or more affiliated companies may elect to aggregate the number of jobs created for qualified full-time employees or the amounts of capital investments as the result of the establishment or expansion by the individual companies in order to qualify for the credit allowed herein.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"20":{"id":239865,"text":"Recapture of the credit amount, under the following circumstances, shall be accomplished by increasing the tax in any of the five years succeeding the taxable year in which a credit has been earned pursuant to this section if the number of qualified full-time employees falls below the average number of qualified full-time employees during the taxable year. The tax increase amount shall be determined by (i) recalculating the credit that would have been earned for the original taxable year using the decreased number of qualified full-time employees and (ii) subtracting the recalculated credit amount from the amount previously earned. In the event that the average number of qualified full-time employees employed at an international trade facility falls below the number employed by the taxpayer prior to claiming any credits pursuant to this section in any of the five taxable years succeeding the year in which the credits were earned, all credits earned with respect to the international trade facility shall be recaptured. No credit amount shall be recaptured more than once pursuant to this subsection. Any recapture pursuant to this subsection shall reduce credits earned but not yet allowed, and credits allowed but carried forward, before the taxpayer’s tax liability is increased.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G","next_prefix":"I"},"21":{"id":239866,"text":"Notwithstanding the provisions of § 58.1-3, the Department of Taxation shall annually provide information to the Virginia Port Authority related to tax credits issued pursuant to this section.","type":"section","prefixes":["I"],"prefix":"I","entire_prefix":"I","prefix_anchor":"I","level":1,"prior_prefix":"H","next_prefix":"J"},"22":{"id":239867,"text":"The Tax Commissioner shall issue guidelines that are necessary and desirable to carry out the provisions of this section, including (i) the computation, carryover, and recapture of the credits provided under this section; (ii) the establishment of criteria for (a) international trade facilities, (b) qualified full-time employees at such facilities, and (c) capital investments; and (iii) the computation, carryover, recapture, and redemption of the credit by affiliated companies. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).","type":"section","prefixes":["J"],"prefix":"J","entire_prefix":"J","prefix_anchor":"J","level":1,"prior_prefix":"I"}},"ancestry":[{"id":13153,"edition_id":1,"name":"Tax Credits for Corporations","identifier":"13","label":"article","depth":4,"order_by":1,"parent_id":13152,"metadata":{},"date_created":"2026-06-26 03:44:21","date_modified":"2026-06-26 03:44:21","permalink":{"id":253497,"object_type":"structure","relational_id":13153,"identifier":"13","token":"58.1\/I\/3\/13","url":"\/58.1\/I\/3\/13\/","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":59349,"structure_id":13153,"section_number":"58.1-430","catch_line":"Repealed","url":"\/58.1-430\/","token":"58.1\/I\/3\/13\/58.1-430","metadata":false},{"id":79747,"structure_id":13153,"section_number":"58.1-431","catch_line":"Repealed","url":"\/58.1-431\/","token":"58.1\/I\/3\/13\/58.1-431","metadata":false},{"id":87213,"structure_id":13153,"section_number":"58.1-432","catch_line":"Tax credit for purchase of conservation tillage equipment","url":"\/58.1-432\/","token":"58.1\/I\/3\/13\/58.1-432","metadata":false},{"id":78377,"structure_id":13153,"section_number":"58.1-433","catch_line":"Expired","url":"\/58.1-433\/","token":"58.1\/I\/3\/13\/58.1-433","metadata":false},{"id":84600,"structure_id":13153,"section_number":"58.1-433.1","catch_line":"Virginia Coal Employment and Production Incentive Tax Credit","url":"\/58.1-433.1\/","token":"58.1\/I\/3\/13\/58.1-433.1","metadata":false},{"id":72145,"structure_id":13153,"section_number":"58.1-434","catch_line":"Repealed","url":"\/58.1-434\/","token":"58.1\/I\/3\/13\/58.1-434","metadata":false},{"id":62315,"structure_id":13153,"section_number":"58.1-436","catch_line":"Tax credit for purchase of conservation tillage and precision agricultural application equipment","url":"\/58.1-436\/","token":"58.1\/I\/3\/13\/58.1-436","metadata":false},{"id":62397,"structure_id":13153,"section_number":"58.1-437","catch_line":"Repealed","url":"\/58.1-437\/","token":"58.1\/I\/3\/13\/58.1-437","metadata":false},{"id":83316,"structure_id":13153,"section_number":"58.1-438","catch_line":"Not effective","url":"\/58.1-438\/","token":"58.1\/I\/3\/13\/58.1-438","metadata":false},{"id":56216,"structure_id":13153,"section_number":"58.1-438.1","catch_line":"Tax credit for vehicle emissions testing equipment, clean-fuel vehicles and certain refueling property","url":"\/58.1-438.1\/","token":"58.1\/I\/3\/13\/58.1-438.1","metadata":false},{"id":62311,"structure_id":13153,"section_number":"58.1-439","catch_line":"Major business facility job tax credit","url":"\/58.1-439\/","token":"58.1\/I\/3\/13\/58.1-439","metadata":false},{"id":63680,"structure_id":13153,"section_number":"58.1-439.1","catch_line":"Repealed","url":"\/58.1-439.1\/","token":"58.1\/I\/3\/13\/58.1-439.1","metadata":false},{"id":76474,"structure_id":13153,"section_number":"58.1-439.10","catch_line":"Tax credit for purchase of waste motor oil burning equipment","url":"\/58.1-439.10\/","token":"58.1\/I\/3\/13\/58.1-439.10","metadata":false},{"id":85121,"structure_id":13153,"section_number":"58.1-439.11","catch_line":"Repealed","url":"\/58.1-439.11\/","token":"58.1\/I\/3\/13\/58.1-439.11","metadata":false},{"id":59921,"structure_id":13153,"section_number":"58.1-439.12","catch_line":"Riparian forest buffer protection for waterways tax credit","url":"\/58.1-439.12\/","token":"58.1\/I\/3\/13\/58.1-439.12","metadata":false},{"id":71239,"structure_id":13153,"section_number":"58.1-439.12:01","catch_line":"Credit for cigarettes manufactured and exported","url":"\/58.1-439.12_01\/","token":"58.1\/I\/3\/13\/58.1-439.12_01","metadata":false},{"id":80405,"structure_id":13153,"section_number":"58.1-439.12:02","catch_line":" Biodiesel and green diesel fuels producers tax credit","url":"\/58.1-439.12_02\/","token":"58.1\/I\/3\/13\/58.1-439.12_02","metadata":false},{"id":77683,"structure_id":13153,"section_number":"58.1-439.12:03","catch_line":"Motion picture production tax credit","url":"\/58.1-439.12_03\/","token":"58.1\/I\/3\/13\/58.1-439.12_03","metadata":false},{"id":82387,"structure_id":13153,"section_number":"58.1-439.12:04","catch_line":"Tax credit for participating landlords","url":"\/58.1-439.12_04\/","token":"58.1\/I\/3\/13\/58.1-439.12_04","metadata":false},{"id":57964,"structure_id":13153,"section_number":"58.1-439.12:05","catch_line":"Green and alternative energy job creation tax credit","url":"\/58.1-439.12_05\/","token":"58.1\/I\/3\/13\/58.1-439.12_05","metadata":false},{"id":66012,"structure_id":13153,"section_number":"58.1-439.12:06","catch_line":"International trade facility tax credit","url":"\/58.1-439.12_06\/","token":"58.1\/I\/3\/13\/58.1-439.12_06","metadata":false},{"id":58192,"structure_id":13153,"section_number":"58.1-439.12:07","catch_line":"Telework expenses tax credit","url":"\/58.1-439.12_07\/","token":"58.1\/I\/3\/13\/58.1-439.12_07","metadata":false},{"id":84261,"structure_id":13153,"section_number":"58.1-439.12:08","catch_line":"Research and development expenses tax credit","url":"\/58.1-439.12_08\/","token":"58.1\/I\/3\/13\/58.1-439.12_08","metadata":false},{"id":54175,"structure_id":13153,"section_number":"58.1-439.12:09","catch_line":"Barge and rail usage tax credit","url":"\/58.1-439.12_09\/","token":"58.1\/I\/3\/13\/58.1-439.12_09","metadata":false},{"id":78639,"structure_id":13153,"section_number":"58.1-439.12:10","catch_line":"Virginia port volume increase tax credit","url":"\/58.1-439.12_10\/","token":"58.1\/I\/3\/13\/58.1-439.12_10","metadata":false},{"id":85547,"structure_id":13153,"section_number":"58.1-439.12:11","catch_line":"Major research and development expenses tax credit","url":"\/58.1-439.12_11\/","token":"58.1\/I\/3\/13\/58.1-439.12_11","metadata":false},{"id":65654,"structure_id":13153,"section_number":"58.1-439.12:12","catch_line":"Food donation tax credit","url":"\/58.1-439.12_12\/","token":"58.1\/I\/3\/13\/58.1-439.12_12","metadata":false},{"id":54927,"structure_id":13153,"section_number":"58.1-439.2","catch_line":" Coalfield employment enhancement tax credit","url":"\/58.1-439.2\/","token":"58.1\/I\/3\/13\/58.1-439.2","metadata":false},{"id":63351,"structure_id":13153,"section_number":"58.1-439.3","catch_line":"Repealed","url":"\/58.1-439.3\/","token":"58.1\/I\/3\/13\/58.1-439.3","metadata":false},{"id":58298,"structure_id":13153,"section_number":"58.1-439.4","catch_line":"Day-care facility investment tax credit","url":"\/58.1-439.4\/","token":"58.1\/I\/3\/13\/58.1-439.4","metadata":false},{"id":66742,"structure_id":13153,"section_number":"58.1-439.5","catch_line":"Agricultural best management practices tax credit","url":"\/58.1-439.5\/","token":"58.1\/I\/3\/13\/58.1-439.5","metadata":false},{"id":81908,"structure_id":13153,"section_number":"58.1-439.6","catch_line":"Worker retraining tax credit","url":"\/58.1-439.6\/","token":"58.1\/I\/3\/13\/58.1-439.6","metadata":false},{"id":60296,"structure_id":13153,"section_number":"58.1-439.6:1","catch_line":"Worker training tax credit","url":"\/58.1-439.6_1\/","token":"58.1\/I\/3\/13\/58.1-439.6_1","metadata":false},{"id":55856,"structure_id":13153,"section_number":"58.1-439.7","catch_line":"Tax credit for purchase of machinery and equipment used for advanced recycling and processing recyclable materials","url":"\/58.1-439.7\/","token":"58.1\/I\/3\/13\/58.1-439.7","metadata":false},{"id":82497,"structure_id":13153,"section_number":"58.1-439.8","catch_line":"Repealed","url":"\/58.1-439.8\/","token":"58.1\/I\/3\/13\/58.1-439.8","metadata":false},{"id":66196,"structure_id":13153,"section_number":"58.1-439.9","catch_line":"Tax credit for certain employers hiring recipients of Temporary Assistance for Needy Families","url":"\/58.1-439.9\/","token":"58.1\/I\/3\/13\/58.1-439.9","metadata":false}],"previous_section":{"id":57964,"structure_id":13153,"section_number":"58.1-439.12:05","catch_line":"Green and alternative energy job creation tax credit","url":"\/58.1-439.12_05\/","token":"58.1\/I\/3\/13\/58.1-439.12_05","metadata":false},"next_section":{"id":58192,"structure_id":13153,"section_number":"58.1-439.12:07","catch_line":"Telework expenses tax credit","url":"\/58.1-439.12_07\/","token":"58.1\/I\/3\/13\/58.1-439.12_07","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/58.1-439.12:06\/","history_text":"

This law was first created in 2011. The record of its establishment is cataloged in chapter 49<\/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 3 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, chapters 846<\/a> and 849<\/a>; in 2014, chapter 423<\/a>; in 2016, chapter 69<\/a>.<\/p>","references":[{"id":74633,"section_number":"62.1-132.3:2","catch_line":"Port of Virginia Economic and Infrastructure Development Grant Fund and Program","order_by":null,"url":"\/62.1-132.3_2\/"},{"id":66782,"section_number":"62.1-132.3:2.2","catch_line":"Economic and Infrastructure Development Grant Program","order_by":null,"url":"\/62.1-132.3_2.2\/"},{"id":61424,"section_number":"62.1-132.3:2.3","catch_line":"International Trade Facility Grant Program","order_by":null,"url":"\/62.1-132.3_2.3\/"}],"refers_to":[{"id":86911,"section_number":"2.2-4000","catch_line":"Short title; purpose","order_by":null,"url":"\/2.2-4000\/"},{"id":57817,"section_number":"58.1-3","catch_line":"Secrecy of information; penalties","order_by":null,"url":"\/58.1-3\/"},{"id":62270,"section_number":"58.1-320","catch_line":"Imposition of tax","order_by":null,"url":"\/58.1-320\/"},{"id":60955,"section_number":"58.1-400","catch_line":"Imposition of tax","order_by":null,"url":"\/58.1-400\/"},{"id":62311,"section_number":"58.1-439","catch_line":"Major business facility job tax credit","order_by":null,"url":"\/58.1-439\/"}],"permalink":{"id":253579,"object_type":"law","relational_id":66012,"identifier":"58.1-439.12:06","token":"58.1\/I\/3\/13\/58.1-439.12_06","url":"\/58.1-439.12_06\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/58.1-439.12_06\/","token":"58.1\/I\/3\/13\/58.1-439.12_06","dublin_core":{"Title":"International trade facility tax credit","Type":"Text","Format":"text\/html","Identifier":"\u00a7 58.1-439.12:06","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> As used in this section, unless the context requires a different meaning:\n\t\t\t“Affiliated companies<\/span>” means two or more companies related to each other so that (i) one company owns at least 80 percent of the voting power of the other or others or (ii) the same interest owns at least 80 percent of the voting power of two or more companies.\n\t\t\t“Capital investment<\/span>” means the amount properly chargeable to a capital account for improvements to rehabilitate or expand depreciable real property placed in service during the taxable year and the cost of machinery, tools, and equipment used in an international trade facility<\/span> directly related to the movement of cargo. Capital investment<\/span> includes expenditures associated with any exterior, structural, mechanical, or electrical improvements necessary to expand or rehabilitate a building for commercial or industrial use and excavations, grading, paving, driveways, roads, sidewalks, landscaping, or other land improvements. For purposes of this section, machinery, tools, and equipment shall be deemed to include only that property placed in service by the international trade facility<\/span> on and after January 1, 2011. Machinery, tools, and equipment excludes property (i) for which a credit under this section was previously granted; (ii) placed in service by the taxpayer<\/span>, a related party<\/span> as defined in \u00a7 267(b) of the Internal Revenue Code, as amended, or by a trade or business under common control as defined in \u00a7 52(b) of the Internal Revenue Code, as amended; or (iii) previously in service in the Commonwealth that has a basis in the hands of the person acquiring it, determined in whole or in part by reference to the basis of such property in the hands of the person from whom acquired or \u00a7 1014(a) of the Internal Revenue Code, as amended.\n\t\t\t“Capital investment<\/span>” shall not include: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> The cost of acquiring any real property or building; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The cost of furnishings; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Any expenditure associated with appraisal, architectural, engineering, or interior design fees; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Loan fees, points, or capitalized interest; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Legal, accounting, realtor, sales<\/span> and marketing, or other professional fees; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> Closing costs, permit fees, user fees, zoning fees, impact fees, and inspection fees; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> Bids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities costs incurred during construction; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

8.<\/span> Utility hook-up or access fees; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

9.<\/span> Outbuildings; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

10.<\/span> The cost of any well or septic system.\n\t\t\t\t“Credit year<\/span>” means the first taxable year following the taxable year in which the international trade facility<\/span> commenced or expanded its operations. A separate credit year<\/span> and a three-year allowance shall exist for each distinct international trade facility<\/span> of a single taxpayer<\/span>.\n\t\t\t\t“International trade facility<\/span>” means a company that: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Is engaged in port-related activities, including, but not limited to, warehousing, distribution, freight forwarding and handling, and goods processing; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Uses maritime port facilities located in the Commonwealth; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Transports at least five percent more cargo through maritime port facilities in the Commonwealth during the taxable year than was transported by the company through such facilities during the preceding taxable year.\n\t\t\t\t“New, permanent full-time position<\/span>” means a job of indefinite duration, created by the company after establishing or expanding an international trade facility<\/span> in the Commonwealth, requiring a minimum of 35 hours of employment per week for each employee for the entire normal year<\/span> of the company’s operations, or a position of indefinite duration that requires a minimum of 35 hours of employment per week for each employee for the portion of the taxable year in which the employee was initially hired for, or transferred to, the international trade facility<\/span> in the Commonwealth. Seasonal or temporary positions, or a job created when a job function is shifted from an existing location in the Commonwealth to the international trade facility<\/span>, and positions in building and grounds maintenance, security, and other such positions that are ancillary to the principal activities performed by the employees at the international trade facility<\/span> shall not qualify as new, permanent full-time positions<\/span>.\n\t\t\t\t“Normal year<\/span>” means at least 48 weeks in a calendar year.\n\t\t\t\t“Qualified full-time employee<\/span>” means an employee filling a new, permanent full-time position<\/span> in an international trade facility<\/span> in the Commonwealth.\n\t\t\t\t“Qualified trade activities<\/span>” means the completed exportation or importation of at least (i) one International Organization for Standardization ocean container with a minimum 20-foot length, (ii) 16 tons of noncontainerized cargo, or (iii) one unit of roll-on\/roll-off cargo through any publicly or privately owned cargo facility located within the Commonwealth through which cargo is transported. Export cargo must be loaded on a barge or ocean-going vessel and import cargo must be discharged from a barge or ocean-going vessel at such facility. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> For taxable years beginning on and after January 1, 2011, but before January 1, 2025, a taxpayer<\/span> satisfying the requirements of this section shall be allowed a credit against the taxes imposed by Articles 2 (§ 58.1-320<\/a> et seq.) and 10 (§ 58.1-400<\/a> et seq.). The amount of the credit earned pursuant to this section shall be equal to either (i) $3,500 per qualified full-time employee<\/span> that results from increased qualified trade activities<\/span> by the taxpayer<\/span> or (ii) an amount equal to two percent of the capital investment<\/span> made by the taxpayer<\/span> to facilitate the increased qualified trade activities<\/span>. The election of which tax credit amount to claim shall be the responsibility of the taxpayer<\/span>. Both tax credits shall not be claimed for the same activities that occur in a calendar year. The portion of the $3,500 credit earned with respect to any qualified full-time employee<\/span> who works in the Commonwealth for less than 12 full months during the credit year<\/span> shall be determined by multiplying the credit amount by a fraction, the numerator of which is the number of full months such employee worked for the international trade facility<\/span> in the Commonwealth during the credit year<\/span> and the denominator of which is 12. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The Tax Commissioner<\/span> shall issue<\/span> tax credits under this section, and in no case shall the Tax Commissioner<\/span> issue<\/span> more than $1,250,000 in tax credits pursuant to this section in any fiscal year of the Commonwealth. If the amount of tax credits requested under this section for any taxable year exceeds $1,250,000, such credits shall be allocated proportionately among all qualified taxpayers<\/span>. The Tax Commissioner<\/span> shall not issue<\/span> tax credits under this section subsequent to the Commonwealth’s fiscal year ending on June 30, 2025. The taxpayer<\/span> shall not be allowed to claim any tax credit under this section unless it has applied to the Department<\/span> for the tax credit and the Department<\/span> has approved the credit. The Department<\/span> shall determine the credit amount allowable for the taxable year and shall provide a written certification to the taxpayer<\/span>, which certification shall report the amount of the tax credit approved by the Department<\/span>. The taxpayer<\/span> shall attach the certification to the applicable income tax return. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The amount of the credit allowed pursuant to this section shall not exceed 50 percent of the tax imposed for the taxable year. Any remaining credit amount may be carried forward for the next 10 taxable years. In the event a taxpayer<\/span> who is subject to the limitation imposed pursuant to this subsection is allowed a different tax credit pursuant to another section of the Code, or has a credit carry forward from a preceding taxable year, such taxpayer<\/span> shall be considered to have first utilized any credit that does not have a carry forward provision, and then any credit carried forward from a preceding taxable year, before using any of the credit allowed pursuant to this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> No credit shall be earned for any employee (i) for whom a credit under this section was previously earned by a related party<\/span> as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; (ii) who was previously employed in the same job function in Virginia by a related party<\/span> as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; (iii) whose job function was previously performed at a different location in Virginia by an employee of the taxpayer<\/span>, by a related party<\/span> as defined in § 267(b) of the Internal Revenue Code, as amended, or by a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended; or (iv) whose job function previously qualified for a credit under this section at a different major business facility, as defined in subsection C of § 58.1-439<\/a>, on behalf of the taxpayer<\/span>, by a related party<\/span> as defined in § 267(b) of the Internal Revenue Code, as amended, or a trade or business under common control as defined in § 52(b) of the Internal Revenue Code, as amended. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> For purposes of this section, the amount of any credit attributable to a partnership, electing small business corporation<\/span> (S corporation<\/span>), or limited liability company shall be allocated to the individual<\/span> partners, shareholders, or members, respectively, in proportion to their ownership or interest in such business entities. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> For purposes of this section, two or more affiliated companies<\/span> may elect to aggregate the number of jobs created for qualified full-time employees<\/span> or the amounts of capital investments<\/span> as the result of the establishment or expansion by the individual<\/span> companies in order<\/span> to qualify for the credit allowed herein. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> Recapture of the credit amount, under the following circumstances, shall be accomplished by increasing the tax in any of the five years succeeding the taxable year in which a credit has been earned pursuant to this section if the number of qualified full-time employees<\/span> falls below the average number of qualified full-time employees<\/span> during the taxable year. The tax increase amount shall be determined by (i) recalculating the credit that would have been earned for the original taxable year using the decreased number of qualified full-time employees<\/span> and (ii) subtracting the recalculated credit amount from the amount previously earned. In the event that the average number of qualified full-time employees<\/span> employed at an international trade facility<\/span> falls below the number employed by the taxpayer<\/span> prior to claiming any credits pursuant to this section in any of the five taxable years succeeding the year in which the credits were earned, all credits earned with respect to the international trade facility<\/span> shall be recaptured. No credit amount shall be recaptured more than once pursuant to this subsection. Any recapture pursuant to this subsection shall reduce credits earned but not yet allowed, and credits allowed but carried forward, before the taxpayer<\/span>’s tax liability is increased. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

I.<\/span> Notwithstanding the provisions of § 58.1-3<\/a>, the Department<\/span> of Taxation shall annually provide information to the Virginia Port Authority related to tax credits issued pursuant to this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

J.<\/span> The Tax Commissioner<\/span> shall issue<\/span> guidelines that are necessary and desirable to carry out the provisions of this section, including (i) the computation, carryover, and recapture of the credits provided under this section; (ii) the establishment of criteria for (a) international trade facilities, (b) qualified full-time employees<\/span> at such facilities, and (c) capital investments<\/span>; and (iii) the computation, carryover, recapture, and redemption<\/span> of the credit by affiliated companies<\/span>. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000<\/a> et seq.). <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nINTERNATIONAL TRADE FACILITY TAX CREDIT (\u00a7 58.1-439.12:06)\n\nA. As used in this section, unless the context requires a different meaning:\n\t\t\t“Affiliated companies” means two or more companies related to\neach other so that (i) one company owns at least 80 percent of the voting power\nof the other or others or (ii) the same interest owns at least 80 percent of the\nvoting power of two or more companies.\n\t\t\t“Capital investment” means the amount properly chargeable to a\ncapital account for improvements to rehabilitate or expand depreciable real\nproperty placed in service during the taxable year and the cost of machinery,\ntools, and equipment used in an international trade facility directly related to\nthe movement of cargo. Capital investment includes expenditures associated with\nany exterior, structural, mechanical, or electrical improvements necessary to\nexpand or rehabilitate a building for commercial or industrial use and\nexcavations, grading, paving, driveways, roads, sidewalks, landscaping, or other\nland improvements. For purposes of this section, machinery, tools, and equipment\nshall be deemed to include only that property placed in service by the\ninternational trade facility on and after January 1, 2011. Machinery, tools, and\nequipment excludes property (i) for which a credit under this section was\npreviously granted; (ii) placed in service by the taxpayer, a related party as\ndefined in \u00a7 267(b) of the Internal Revenue Code, as amended, or by a trade or\nbusiness under common control as defined in \u00a7 52(b) of the Internal Revenue\nCode, as amended; or (iii) previously in service in the Commonwealth that has a\nbasis in the hands of the person acquiring it, determined in whole or in part by\nreference to the basis of such property in the hands of the person from whom\nacquired or \u00a7 1014(a) of the Internal Revenue Code, as amended.\n\t\t\t“Capital investment” shall not include:\n\n 1. The cost of acquiring any real property or building;\n\n 2. The cost of furnishings;\n\n 3. Any expenditure associated with appraisal, architectural, engineering, or\n interior design fees;\n\n 4. Loan fees, points, or capitalized interest;\n\n 5. Legal, accounting, realtor, sales and marketing, or other professional\n fees;\n\n 6. Closing costs, permit fees, user fees, zoning fees, impact fees, and\n inspection fees;\n\n 7. Bids, insurance, signage, utilities, bonding, copying, rent loss, or\n temporary facilities costs incurred during construction;\n\n 8. Utility hook-up or access fees;\n\n 9. Outbuildings; or\n\n 10. The cost of any well or septic system.\n \t\t\t\t“Credit year” means the first taxable year following the\n taxable year in which the international trade facility commenced or expanded\n its operations. A separate credit year and a three-year allowance shall exist\n for each distinct international trade facility of a single taxpayer.\n \t\t\t\t“International trade facility” means a company that:\n\n 1. Is engaged in port-related activities, including, but not limited to,\n warehousing, distribution, freight forwarding and handling, and goods\n processing;\n\n 2. Uses maritime port facilities located in the Commonwealth; and\n\n 3. Transports at least five percent more cargo through maritime port\n facilities in the Commonwealth during the taxable year than was transported by\n the company through such facilities during the preceding taxable year.\n \t\t\t\t“New, permanent full-time position” means a job of indefinite\n duration, created by the company after establishing or expanding an\n international trade facility in the Commonwealth, requiring a minimum of 35\n hours of employment per week for each employee for the entire normal year of\n the company’s operations, or a position of indefinite duration that\n requires a minimum of 35 hours of employment per week for each employee for\n the portion of the taxable year in which the employee was initially hired for,\n or transferred to, the international trade facility in the Commonwealth.\n Seasonal or temporary positions, or a job created when a job function is\n shifted from an existing location in the Commonwealth to the international\n trade facility, and positions in building and grounds maintenance, security,\n and other such positions that are ancillary to the principal activities\n performed by the employees at the international trade facility shall not\n qualify as new, permanent full-time positions.\n \t\t\t\t“Normal year” means at least 48 weeks in a calendar year.\n \t\t\t\t“Qualified full-time employee” means an employee filling a\n new, permanent full-time position in an international trade facility in the\n Commonwealth.\n \t\t\t\t“Qualified trade activities” means the completed exportation\n or importation of at least (i) one International Organization for\n Standardization ocean container with a minimum 20-foot length, (ii) 16 tons of\n noncontainerized cargo, or (iii) one unit of roll-on\/roll-off cargo through\n any publicly or privately owned cargo facility located within the Commonwealth\n through which cargo is transported. Export cargo must be loaded on a barge or\n ocean-going vessel and import cargo must be discharged from a barge or\n ocean-going vessel at such facility.\n\nB. For taxable years beginning on and after January 1, 2011, but before January\n1, 2025, a taxpayer satisfying the requirements of this section shall be allowed\na credit against the taxes imposed by Articles 2 (§ 58.1-320 et seq.) and\n10 (§ 58.1-400 et seq.). The amount of the credit earned pursuant to this\nsection shall be equal to either (i) $3,500 per qualified full-time employee\nthat results from increased qualified trade activities by the taxpayer or (ii)\nan amount equal to two percent of the capital investment made by the taxpayer to\nfacilitate the increased qualified trade activities. The election of which tax\ncredit amount to claim shall be the responsibility of the taxpayer. Both tax\ncredits shall not be claimed for the same activities that occur in a calendar\nyear. The portion of the $3,500 credit earned with respect to any qualified\nfull-time employee who works in the Commonwealth for less than 12 full months\nduring the credit year shall be determined by multiplying the credit amount by a\nfraction, the numerator of which is the number of full months such employee\nworked for the international trade facility in the Commonwealth during the\ncredit year and the denominator of which is 12.\n\nC. The Tax Commissioner shall issue tax credits under this section, and in no\ncase shall the Tax Commissioner issue more than $1,250,000 in tax credits\npursuant to this section in any fiscal year of the Commonwealth. If the amount\nof tax credits requested under this section for any taxable year exceeds\n$1,250,000, such credits shall be allocated proportionately among all qualified\ntaxpayers. The Tax Commissioner shall not issue tax credits under this section\nsubsequent to the Commonwealth’s fiscal year ending on June 30, 2025. The\ntaxpayer shall not be allowed to claim any tax credit under this section unless\nit has applied to the Department for the tax credit and the Department has\napproved the credit. The Department shall determine the credit amount allowable\nfor the taxable year and shall provide a written certification to the taxpayer,\nwhich certification shall report the amount of the tax credit approved by the\nDepartment. The taxpayer shall attach the certification to the applicable income\ntax return.\n\nD. The amount of the credit allowed pursuant to this section shall not exceed 50\npercent of the tax imposed for the taxable year. Any remaining credit amount may\nbe carried forward for the next 10 taxable years. In the event a taxpayer who is\nsubject to the limitation imposed pursuant to this subsection is allowed a\ndifferent tax credit pursuant to another section of the Code, or has a credit\ncarry forward from a preceding taxable year, such taxpayer shall be considered\nto have first utilized any credit that does not have a carry forward provision,\nand then any credit carried forward from a preceding taxable year, before using\nany of the credit allowed pursuant to this section.\n\nE. No credit shall be earned for any employee (i) for whom a credit under this\nsection was previously earned by a related party as defined in § 267(b) of\nthe Internal Revenue Code, as amended, or a trade or business under common\ncontrol as defined in § 52(b) of the Internal Revenue Code, as amended;\n(ii) who was previously employed in the same job function in Virginia by a\nrelated party as defined in § 267(b) of the Internal Revenue Code, as\namended, or a trade or business under common control as defined in § 52(b)\nof the Internal Revenue Code, as amended; (iii) whose job function was\npreviously performed at a different location in Virginia by an employee of the\ntaxpayer, by a related party as defined in § 267(b) of the Internal Revenue\nCode, as amended, or by a trade or business under common control as defined in\n§ 52(b) of the Internal Revenue Code, as amended; or (iv) whose job\nfunction previously qualified for a credit under this section at a different\nmajor business facility, as defined in subsection C of § 58.1-439, on\nbehalf of the taxpayer, by a related party as defined in § 267(b) of the\nInternal Revenue Code, as amended, or a trade or business under common control\nas defined in § 52(b) of the Internal Revenue Code, as amended.\n\nF. For purposes of this section, the amount of any credit attributable to a\npartnership, electing small business corporation (S corporation), or limited\nliability company shall be allocated to the individual partners, shareholders,\nor members, respectively, in proportion to their ownership or interest in such\nbusiness entities.\n\nG. For purposes of this section, two or more affiliated companies may elect to\naggregate the number of jobs created for qualified full-time employees or the\namounts of capital investments as the result of the establishment or expansion\nby the individual companies in order to qualify for the credit allowed herein.\n\nH. Recapture of the credit amount, under the following circumstances, shall be\naccomplished by increasing the tax in any of the five years succeeding the\ntaxable year in which a credit has been earned pursuant to this section if the\nnumber of qualified full-time employees falls below the average number of\nqualified full-time employees during the taxable year. The tax increase amount\nshall be determined by (i) recalculating the credit that would have been earned\nfor the original taxable year using the decreased number of qualified full-time\nemployees and (ii) subtracting the recalculated credit amount from the amount\npreviously earned. In the event that the average number of qualified full-time\nemployees employed at an international trade facility falls below the number\nemployed by the taxpayer prior to claiming any credits pursuant to this section\nin any of the five taxable years succeeding the year in which the credits were\nearned, all credits earned with respect to the international trade facility\nshall be recaptured. No credit amount shall be recaptured more than once\npursuant to this subsection. Any recapture pursuant to this subsection shall\nreduce credits earned but not yet allowed, and credits allowed but carried\nforward, before the taxpayer’s tax liability is increased.\n\nI. Notwithstanding the provisions of § 58.1-3, the Department of Taxation\nshall annually provide information to the Virginia Port Authority related to tax\ncredits issued pursuant to this section.\n\nJ. The Tax Commissioner shall issue guidelines that are necessary and desirable\nto carry out the provisions of this section, including (i) the computation,\ncarryover, and recapture of the credits provided under this section; (ii) the\nestablishment of criteria for (a) international trade facilities, (b) qualified\nfull-time employees at such facilities, and (c) capital investments; and (iii)\nthe computation, carryover, recapture, and redemption of the credit by\naffiliated companies. Such guidelines shall be exempt from the provisions of the\nAdministrative Process Act (§ 2.2-4000 et seq.).\n\nHISTORY: 2011, c. 49; 2012, cc. 846, 849; 2014, c. 423; 2016, c. 69; 2021, Sp.\nSess. I, c. 373.","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}}