{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/58.1-439.7.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/58.1-439.7.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/58.1-439.7.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/58.1-439.7.html"}],"law_id":55856,"edition_id":1,"section_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","history":"1998, c. 253; 2001, c. 91; 2004, c. 611; 2007, cc. 529, 593; 2009, c. 34; 2015, cc. 49, 94; 2020, c. 789.","full_text":"A\n\n1. For taxable years beginning on and after January 1, 1999, but before January 1, 2025, a taxpayer shall be allowed a credit against the tax imposed pursuant to Articles 2 (\u00a7 58.1-320 et seq.) and 10 (\u00a7 58.1-400 et seq.) of Chapter 3 of this title, in an amount equal to 20 percent of the purchase price paid during the taxable year for (i) machinery and equipment used predominantly in or on the premises of manufacturing facilities or plant units which manufacture, process, compound, or produce items of tangible personal property from recyclable materials, within the Commonwealth, for sale and (ii) machinery and equipment used predominantly in or on the premises of facilities that are predominantly engaged in advanced recycling. For purposes of determining “purchase price paid” under this section, the taxpayer may use the original total capitalized cost of such machinery and equipment, less capitalized interest. For purposes of this section, “advanced recycling” means the operation of a single-stream or multi-stream recycling plant that converts waste materials into new materials for resale by processing them and breaking them down into their raw constituents. “Advanced recycling” includes the operation of a materials recovery facility or materials reclamation facility that receives, separates, and prepares recyclable materials for sale to end-user manufacturers.2\n\nThe Department of Environmental Quality shall certify that such machinery and equipment are integral to the recycling process before the taxpayer shall be allowed the tax credit under this section. The taxpayer shall also submit purchase receipts and invoices as may be necessary to confirm the taxpayer’s statement of purchase price paid, with the income tax return to verify the amount of purchase price paid for the recycling machinery and equipment.3\n\nNo taxpayer shall be denied the credit under this section based solely on another person’s use of the tangible personal property produced by the taxpayer, provided that the tangible personal property was sold by the taxpayer to an unaffiliated person in an arm’s-length sale.4\n\nNo credit shall be allowed under this section for machinery and equipment unless the machinery and equipment manufacture, process, compound, or produce items of tangible personal property from recyclable materials.B\n\nThe total credit allowed under this section in any taxable year shall not exceed 40 percent of the Virginia income tax liability of such taxpayer.C\n\nAny tax credit not used for the taxable year in which the purchase price on recycling machinery and equipment was paid may be carried over for credit against the taxpayer’s income taxes in the 10 succeeding taxable years until the total credit amount is used.D\n\nThe Department of Taxation shall administer the tax credits under this section. Beginning with credits allowable for taxable year 2015, in no case shall the Department issue more than $2 million in tax credits pursuant to this section in any fiscal year of the Commonwealth. A taxpayer shall not be allowed to claim any tax credit unless it has applied to the Department of Environmental Quality for certification as described in subdivision A 2 and the Department of Environmental Quality has issued a written certification stating that the machinery and equipment purchased are integral to the recycling process. If the amount of tax credits approved under this section by the Department of Taxation for any taxable year exceeds $2 million, the Department shall apportion the credits by dividing $2 million by the total amount of tax credits so approved, to determine the percentage of otherwise allowed tax credits each taxpayer shall receive.E\n\nIn the event a corporation converts to a partnership, limited liability company, or electing small business corporation (S corporation), such business entity shall be entitled to any unused credits of the corporation. Credits earned by a partnership, limited liability company, electing small business corporation (S corporation), or a predecessor corporation entitled to such credits, shall be allocated to the individual partners, members, or shareholders, respectively, in proportion to their ownership or interest in such business entities.","order_by":null,"text":{"0":{"id":204607,"text":"1. For taxable years beginning on and after January 1, 1999, but before January 1, 2025, a taxpayer shall be allowed a credit against the tax imposed pursuant to Articles 2 (\u00a7 58.1-320 et seq.) and 10 (\u00a7 58.1-400 et seq.) of Chapter 3 of this title, in an amount equal to 20 percent of the purchase price paid during the taxable year for (i) machinery and equipment used predominantly in or on the premises of manufacturing facilities or plant units which manufacture, process, compound, or produce items of tangible personal property from recyclable materials, within the Commonwealth, for sale and (ii) machinery and equipment used predominantly in or on the premises of facilities that are predominantly engaged in advanced recycling. For purposes of determining “purchase price paid” under this section, the taxpayer may use the original total capitalized cost of such machinery and equipment, less capitalized interest. For purposes of this section, “advanced recycling” means the operation of a single-stream or multi-stream recycling plant that converts waste materials into new materials for resale by processing them and breaking them down into their raw constituents. “Advanced recycling” includes the operation of a materials recovery facility or materials reclamation facility that receives, separates, and prepares recyclable materials for sale to end-user manufacturers.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A2"},"1":{"id":204608,"text":"The Department of Environmental Quality shall certify that such machinery and equipment are integral to the recycling process before the taxpayer shall be allowed the tax credit under this section. The taxpayer shall also submit purchase receipts and invoices as may be necessary to confirm the taxpayer’s statement of purchase price paid, with the income tax return to verify the amount of purchase price paid for the recycling machinery and equipment.","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A","next_prefix":"A3"},"2":{"id":204609,"text":"No taxpayer shall be denied the credit under this section based solely on another person’s use of the tangible personal property produced by the taxpayer, provided that the tangible personal property was sold by the taxpayer to an unaffiliated person in an arm’s-length sale.","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"A4"},"3":{"id":204610,"text":"No credit shall be allowed under this section for machinery and equipment unless the machinery and equipment manufacture, process, compound, or produce items of tangible personal property from recyclable materials.","type":"section","prefixes":["A","4"],"prefix":"4","entire_prefix":"A4","prefix_anchor":"A4","level":2,"prior_prefix":"A3","next_prefix":"B"},"4":{"id":204611,"text":"The total credit allowed under this section in any taxable year shall not exceed 40 percent of the Virginia income tax liability of such taxpayer.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A4","next_prefix":"C"},"5":{"id":204612,"text":"Any tax credit not used for the taxable year in which the purchase price on recycling machinery and equipment was paid may be carried over for credit against the taxpayer’s income taxes in the 10 succeeding taxable years until the total credit amount is used.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"6":{"id":204613,"text":"The Department of Taxation shall administer the tax credits under this section. Beginning with credits allowable for taxable year 2015, in no case shall the Department issue more than $2 million in tax credits pursuant to this section in any fiscal year of the Commonwealth. A taxpayer shall not be allowed to claim any tax credit unless it has applied to the Department of Environmental Quality for certification as described in subdivision A 2 and the Department of Environmental Quality has issued a written certification stating that the machinery and equipment purchased are integral to the recycling process. If the amount of tax credits approved under this section by the Department of Taxation for any taxable year exceeds $2 million, the Department shall apportion the credits by dividing $2 million by the total amount of tax credits so approved, to determine the percentage of otherwise allowed tax credits each taxpayer shall receive.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"7":{"id":204614,"text":"In the event a corporation converts to a partnership, limited liability company, or electing small business corporation (S corporation), such business entity shall be entitled to any unused credits of the corporation. Credits earned by a partnership, limited liability company, electing small business corporation (S corporation), or a predecessor corporation entitled to such credits, shall be allocated to the individual partners, members, or shareholders, respectively, in proportion to their ownership or interest in such business entities.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D"}},"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 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credit","url":"\/58.1-439.6_1\/","token":"58.1\/I\/3\/13\/58.1-439.6_1","metadata":false},"next_section":{"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},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/58.1-439.7\/","history_text":"

This law was first created in 1998. The record of its establishment is cataloged in chapter 253<\/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 6 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 2001, chapter 91<\/a>; in 2004, chapter 611<\/a>; in 2007, chapters 529<\/a> and 593<\/a>; in 2009, chapter 34<\/a>; in 2015, chapters 49<\/a> and 94<\/a>; in 2020, chapter 789<\/a>.<\/p>","references":[{"id":79478,"section_number":"58.1-3507","catch_line":"Certain machinery and tools segregated for local taxation only; notice prior to change in valuation, hearing","order_by":null,"url":"\/58.1-3507\/"},{"id":69050,"section_number":"58.1-609.3","catch_line":"Commercial and industrial exemptions","order_by":null,"url":"\/58.1-609.3\/"}],"refers_to":[{"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\/"}],"permalink":{"id":253631,"object_type":"law","relational_id":55856,"identifier":"58.1-439.7","token":"58.1\/I\/3\/13\/58.1-439.7","url":"\/58.1-439.7\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/58.1-439.7\/","token":"58.1\/I\/3\/13\/58.1-439.7","dublin_core":{"Title":"Tax credit for purchase of machinery and equipment used for advanced recycling and processing recyclable materials","Type":"Text","Format":"text\/html","Identifier":"\u00a7 58.1-439.7","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> 1. For taxable years beginning on and after January 1, 1999, but before January 1, 2025, a taxpayer<\/span> shall be allowed a credit against the tax imposed pursuant to Articles 2 (\u00a7 58.1-320<\/a> et seq.) and 10 (\u00a7 58.1-400<\/a> et seq.) of Chapter 3 of this title, in an amount equal to 20 percent of the purchase price paid<\/span> during the taxable year for (i) machinery and equipment used predominantly in or on the premises of manufacturing facilities or plant units which manufacture, process, compound, or produce items of tangible personal property from recyclable materials<\/span>, within the Commonwealth, for sale and (ii) machinery and equipment used predominantly in or on the premises of facilities that are predominantly engaged in advanced recycling<\/span>. For purposes of determining “purchase price paid<\/span>” under this section, the taxpayer<\/span> may use the original total capitalized cost of such machinery and equipment, less capitalized interest. For purposes of this section, “advanced recycling<\/span>” means the operation of a single-stream or multi-stream recycling plant that converts waste materials<\/span> into new materials<\/span> for resale by processing them and breaking them down into their raw constituents. “Advanced recycling<\/span>” includes the operation of a materials<\/span> recovery facility or materials<\/span> reclamation facility that receives, separates, and prepares recyclable materials<\/span> for sale to end-user manufacturers. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The Department<\/span> of Environmental Quality shall certify that such machinery and equipment are integral to the recycling process before the taxpayer<\/span> shall be allowed the tax credit under this section. The taxpayer<\/span> shall also submit purchase receipts and invoices as may be necessary to confirm the taxpayer<\/span>’s statement of purchase price paid<\/span>, with the income tax return to verify the amount of purchase price paid<\/span> for the recycling machinery and equipment. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> No taxpayer<\/span> shall be denied the credit under this section based solely on another person’s use of the tangible personal property produced by the taxpayer<\/span>, provided that the tangible personal property was sold by the taxpayer<\/span> to an unaffiliated person in an arm’s-length sale. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> No credit shall be allowed under this section for machinery and equipment unless the machinery and equipment manufacture, process, compound, or produce items of tangible personal property from recyclable materials<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> The total credit allowed under this section in any taxable year shall not exceed 40 percent of the Virginia income tax liability of such taxpayer<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Any tax credit not used for the taxable year in which the purchase price on recycling machinery and equipment was paid may be carried over for credit against the taxpayer<\/span>’s income taxes in the 10 succeeding taxable years until the total credit amount is used. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The Department<\/span> of Taxation shall administer the tax credits under this section. Beginning with credits allowable for taxable year 2015, in no case shall the Department<\/span> issue<\/span> more than $2 million in tax credits pursuant to this section in any fiscal year of the Commonwealth. A taxpayer<\/span> shall not be allowed to claim any tax credit unless it has applied to the Department<\/span> of Environmental Quality for certification as described in subdivision A 2 and the Department<\/span> of Environmental Quality has issued a written certification stating that the machinery and equipment purchased are integral to the recycling process. If the amount of tax credits approved under this section by the Department<\/span> of Taxation for any taxable year exceeds $2 million, the Department<\/span> shall apportion the credits by dividing $2 million by the total amount of tax credits so approved, to determine the percentage of otherwise allowed tax credits each taxpayer<\/span> shall receive. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> In the event a corporation<\/span> converts to a partnership, limited liability company, or electing small business corporation<\/span> (S corporation<\/span>), such business entity shall be entitled to any unused credits of the corporation<\/span>. Credits earned by a partnership, limited liability company, electing small business corporation<\/span> (S corporation<\/span>), or a predecessor corporation<\/span> entitled to such credits, shall be allocated to the individual<\/span> partners, members, or shareholders, respectively, in proportion to their ownership or interest in such business entities. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nTAX CREDIT FOR PURCHASE OF MACHINERY AND EQUIPMENT USED FOR ADVANCED RECYCLING\nAND PROCESSING RECYCLABLE MATERIALS (\u00a7 58.1-439.7)\n\nA. 1. For taxable years beginning on and after January 1, 1999, but before\nJanuary 1, 2025, a taxpayer shall be allowed a credit against the tax imposed\npursuant to Articles 2 (\u00a7 58.1-320 et seq.) and 10 (\u00a7 58.1-400 et seq.) of\nChapter 3 of this title, in an amount equal to 20 percent of the purchase price\npaid during the taxable year for (i) machinery and equipment used predominantly\nin or on the premises of manufacturing facilities or plant units which\nmanufacture, process, compound, or produce items of tangible personal property\nfrom recyclable materials, within the Commonwealth, for sale and (ii) machinery\nand equipment used predominantly in or on the premises of facilities that are\npredominantly engaged in advanced recycling. For purposes of determining\n“purchase price paid” under this section, the taxpayer may use the\noriginal total capitalized cost of such machinery and equipment, less\ncapitalized interest. For purposes of this section, “advanced\nrecycling” means the operation of a single-stream or multi-stream\nrecycling plant that converts waste materials into new materials for resale by\nprocessing them and breaking them down into their raw constituents.\n“Advanced recycling” includes the operation of a materials recovery\nfacility or materials reclamation facility that receives, separates, and\nprepares recyclable materials for sale to end-user manufacturers.\n\n 2. The Department of Environmental Quality shall certify that such machinery\n and equipment are integral to the recycling process before the taxpayer shall\n be allowed the tax credit under this section. The taxpayer shall also submit\n purchase receipts and invoices as may be necessary to confirm the\n taxpayer’s statement of purchase price paid, with the income tax return\n to verify the amount of purchase price paid for the recycling machinery and\n equipment.\n\n 3. No taxpayer shall be denied the credit under this section based solely on\n another person’s use of the tangible personal property produced by the\n taxpayer, provided that the tangible personal property was sold by the\n taxpayer to an unaffiliated person in an arm’s-length sale.\n\n 4. No credit shall be allowed under this section for machinery and equipment\n unless the machinery and equipment manufacture, process, compound, or produce\n items of tangible personal property from recyclable materials.\n\nB. The total credit allowed under this section in any taxable year shall not\nexceed 40 percent of the Virginia income tax liability of such taxpayer.\n\nC. Any tax credit not used for the taxable year in which the purchase price on\nrecycling machinery and equipment was paid may be carried over for credit\nagainst the taxpayer’s income taxes in the 10 succeeding taxable years\nuntil the total credit amount is used.\n\nD. The Department of Taxation shall administer the tax credits under this\nsection. Beginning with credits allowable for taxable year 2015, in no case\nshall the Department issue more than $2 million in tax credits pursuant to this\nsection in any fiscal year of the Commonwealth. A taxpayer shall not be allowed\nto claim any tax credit unless it has applied to the Department of Environmental\nQuality for certification as described in subdivision A 2 and the Department of\nEnvironmental Quality has issued a written certification stating that the\nmachinery and equipment purchased are integral to the recycling process. If the\namount of tax credits approved under this section by the Department of Taxation\nfor any taxable year exceeds $2 million, the Department shall apportion the\ncredits by dividing $2 million by the total amount of tax credits so approved,\nto determine the percentage of otherwise allowed tax credits each taxpayer shall\nreceive.\n\nE. In the event a corporation converts to a partnership, limited liability\ncompany, or electing small business corporation (S corporation), such business\nentity shall be entitled to any unused credits of the corporation. Credits\nearned by a partnership, limited liability company, electing small business\ncorporation (S corporation), or a predecessor corporation entitled to such\ncredits, shall be allocated to the individual partners, members, or\nshareholders, respectively, in proportion to their ownership or interest in such\nbusiness entities.\n\nHISTORY: 1998, c. 253; 2001, c. 91; 2004, c. 611; 2007, cc. 529, 593; 2009, c.\n34; 2015, cc. 49, 94; 2020, c. 789.","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}}