{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/58.1-439.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/58.1-439.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/58.1-439.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/58.1-439.html"}],"law_id":62311,"edition_id":1,"section_id":62311,"structure_id":13153,"section_number":"58.1-439","catch_line":"Major business facility job tax credit","history":"1994, cc. 750, 768; 1995, c. 365; 1996, c. 874; 1997, cc. 786, 852; 1998, c. 367; 2004, cc. 170, 619; 2005, cc. 863, 884; 2009, c. 753; 2010, cc. 363, 469; 2012, cc. 93, 445, 475; 2015, c. 451; 2019, c. 699; 2022, cc. 11, 203.","full_text":"A\n\nFor taxable years beginning on and after January 1, 1995, but before July 1, 2025, a taxpayer shall be allowed a credit against the taxes imposed by Articles 2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 et seq.), and 10 (§ 58.1-400 et seq.) of Chapter 3; Chapter 12 (§ 58.1-1200 et seq.); Article 1 (§ 58.1-2500 et seq.) of Chapter 25; or Article 2 (§ 58.1-2620 et seq.) of Chapter 26 as set forth in this section.B\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.C\n\nA “major business facility” is a company that satisfies the following criteria:1\n\nSubject to the provisions of subsections K or L, the establishment or expansion of the company shall result in the creation of at least 50 jobs for qualified full-time employees; the first such 50 jobs shall be referred to as the “threshold amount”; and2\n\nThe company is engaged in any business in the Commonwealth, except a retail trade business if such trade is the principal activity of an individual facility in the Commonwealth. Examples of types of major business facilities that are eligible for the credit provided under this section include, but are not limited to, a headquarters, or portion of such a facility, where company employees are physically employed, and where the majority of the company’s financial, personnel, legal or planning functions are handled either on a regional or national basis. A company primarily engaged in the Commonwealth in the business of manufacturing or mining; agriculture, forestry or fishing; transportation or communications; or a public utility subject to the corporation income tax shall be deemed to have established or expanded a major business facility in the Commonwealth if it meets the requirements of subdivision 1 during a single taxable year and such facilities are not retail establishments. A major business facility shall also include facilities that perform central management or administrative activities, whether operated as a separate trade or business, or as a separate support operation of another business. Central management or administrative activities include, but are not limited to, general management; accounting; computing; tabulating; purchasing; transportation or shipping; engineering and systems planning; advertising; technical sales and support operations; central administrative offices and warehouses; research, development and testing laboratories; computer-programming, data-processing and other computer-related services facilities; and legal, financial, insurance, and real estate services. The terms used in this subdivision to refer to various types of businesses shall have the same meanings as those terms are commonly defined in the Standard Industrial Classification Manual.D\n\nFor purposes of this section, the “credit year” is the first taxable year following the taxable year in which the major business facility commenced or expanded operations.E\n\nThe Department of Taxation shall make all determinations as to the classification of a major business facility in accordance with the provisions of this section.F\n\nA “qualified full-time employee” means an employee filling a new, permanent full-time position in a major business facility in the Commonwealth. A “new, permanent full-time position” is a job of an indefinite duration, created by the company as a result of the establishment or expansion of a major business facility in the Commonwealth, requiring a minimum of 35 hours of an employee’s time a week for the entire normal year of the company’s operations, which “normal year” shall consist of at least 48 weeks, or a position of indefinite duration which requires a minimum of 35 hours of an employee’s time a week for the portion of the taxable year in which the employee was initially hired for, or transferred to, the major business 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 new major business facility and positions in building and grounds maintenance, security, and other such positions which are ancillary to the principal activities performed by the employees at a major business facility shall not qualify as new, permanent full-time positions.G\n\nFor any major business facility, the amount of credit earned pursuant to this section shall be equal to $1,000 per qualified full-time employee, over the threshold amount, employed during the credit year. The credit shall be allowed ratably, with one-third of the credit amount allowed annually for three years beginning with the credit year. However, for taxable years beginning on or after January 1, 2009, one-half of the credit amount shall be allowed each year for two years. The portion of the $1,000 credit earned with respect to any qualified full-time employee who is employed in the Commonwealth for less than 12 full months during the credit year will be determined by multiplying the credit amount by a fraction, the numerator of which is the number of full months that the qualified full-time employee worked for the major business facility in the Commonwealth during the credit year, and the denominator of which is 12. A separate credit year and a three-year allowance period shall exist for each distinct major business facility of a single taxpayer, except for credits allowed for taxable years beginning on or after January 1, 2009, when a two-year allowance period shall exist for each distinct major business facility of a single taxpayer.H\n\nThe amount of credit allowed pursuant to this section shall not exceed the tax imposed for such taxable year. Any credit not usable for the taxable year the credit was allowed may be, to the extent usable, carried over for the next 10 succeeding taxable years. No credit shall be carried back to a preceding taxable year. In the event that a taxpayer who is subject to the tax limitation imposed pursuant to this subsection is allowed another credit pursuant to any other section of the Code of Virginia, or has a credit carryover from a preceding taxable year, such taxpayer shall be considered to have first utilized any credit allowed which does not have a carryover provision, and then any credit which is carried forward from a preceding taxable year, prior to the utilization of any credit allowed pursuant to this section.I\n\nNo credit shall be earned pursuant to this section for any employee (i) for whom a credit under this section was previously earned by a related party as defined by Internal Revenue Code § 267(b) or a trade or business under common control as defined by Internal Revenue Code § 52(b); (ii) who was previously employed in the same job function in Virginia by a related party as defined by Internal Revenue Code § 267(b) or a trade or business under common control as defined by Internal Revenue Code § 52(b); (iii) whose job function was previously performed at a different location in Virginia by an employee of the taxpayer, a related party as defined by Internal Revenue Code § 267(b), or a trade or business under common control as defined by Internal Revenue Code § 52(b); or (iv) whose job function previously qualified for a credit under this section at a different major business facility on behalf of the taxpayer, a related party as defined by Internal Revenue Code § 267(b), or a trade or business under common control as defined by Internal Revenue Code § 52(b).J\n\nSubject to the provisions of subsections K or L, recapture of this credit, 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 decreases below the average number of qualified full-time employees employed during the credit year. Such tax increase amount shall be determined by (i) recomputing the credit which would have been earned for the original credit year using the decreased number of qualified full-time employees and (ii) subtracting such recomputed credit from the amount of credit previously earned. In the event that the average number of qualifying full-time employees employed at a major business facility falls below the threshold amount in any of the five taxable years succeeding the credit year, all credits earned with respect to such major business facility shall be recaptured. No credit amount will be recaptured more than once pursuant to this subsection. Any recapture pursuant to this section shall reduce credits earned but not yet allowed, and credits allowed but carried forward, before the taxpayer’s tax liability may be increased.K\n\nIn the event that a major business facility is located in an economically distressed area or in an enterprise zone as defined in Chapter 49 (§ 59.1-538 et seq.) of Title 59.1 during a credit year, the threshold amount required to qualify for a credit pursuant to this section and to avoid full recapture shall be reduced from 50 to 25 for purposes of subdivision C 1 and subsection J. An area shall qualify as economically distressed if it is a city or county with an unemployment rate for the preceding year of at least 0.5 percent higher than the average statewide unemployment rate for such year. The Virginia Economic Development Partnership shall identify and publish a list of all economically distressed areas at least annually.L\n\nFor taxable years beginning on or after January 1, 2004, but before January 1, 2006, in the event that a major business facility is located in a severely economically distressed area, the threshold amount required to qualify for a credit pursuant to this section and to avoid full recapture shall be reduced from 100 to 25 for purposes of subdivision C 1 and subsection J. However, the total amount of credit allowable under this subsection shall not exceed $100,000 in aggregate. An area shall qualify as severely economically distressed if it is a city or county with an unemployment rate for the preceding year of at least twice the average statewide unemployment rate for such year. The Virginia Economic Development Partnership shall identify and publish a list of all severely economically distressed areas at least annually.M\n\nThe Tax Commissioner shall promulgate regulations, in accordance with the Administrative Process Act (§ 2.2-4000 et seq.), relating to (i) the computation, carryover, and recapture of the credit provided under this section; (ii) defining criteria for (a) a major business facility, (b) qualifying full-time employees at such facility, and (c) economically distressed areas; and (iii) the computation, carryover, recapture, and redemption of the credit by affiliated companies pursuant to subsection S.N\n\nThe provisions of this section shall apply only in instances where an announcement of intent to establish or expand a major business facility is made on or after January 1, 1994. An announcement of intent to establish or expand a major business facility includes, but is not limited to, a press conference or extensive press coverage, providing information with respect to the impact of the project on the economy of the area where the major business facility is to be established or expanded and the Commonwealth as a whole.O\n\nThe credit allowed pursuant to this section shall be granted to the person who pays taxes for the qualified full-time employees pursuant to Chapter 5 (§ 60.2-500 et seq.) of Title 60.2.P\n\nNo person shall claim a credit allowed pursuant to this section and the credit allowed pursuant to § 58.1-439.2. Any qualified business firm receiving an enterprise zone job creation grant under § 59.1-547 shall not be eligible to receive a major business facility job tax credit pursuant to this section for any job used to qualify for the enterprise zone job creation grant.Q\n\nNo person operating a business in the Commonwealth pursuant to Chapter 29 (§ 59.1-364 et seq.) of Title 59.1 shall claim a credit pursuant to this section.R\n\nNotwithstanding subsection O, a taxpayer may, for the purpose of determining the number of qualified full-time employees at a major business facility, include the employees of a contractor or a subcontractor if such employees are permanently assigned to the taxpayer’s major business facility. If the taxpayer includes the employees of a contractor or subcontractor in its total of qualified full-time employees, it shall enter into a contractual agreement with the contractor or subcontractor prohibiting the contractor or subcontractor from also claiming these employees in order to receive a credit given under this section. The taxpayer shall provide evidence satisfactory to the Department of Taxation that it has entered into such a contract.S\n\nFor purposes of satisfying the criteria of subdivision C 1, two or more affiliated companies may elect to aggregate the number of jobs created for qualified full-time employees as the result of the establishment or expansion by the individual companies in order to qualify for the credit allowed pursuant to this section. For purposes of this subsection, “affiliated companies” means two or more companies related to each other such that (i) one company owns at least 80 percent of the voting power of the other or others or (ii) at least 80 percent of the voting power of two or more companies is owned by the same interests.T\n\nThe General Assembly of Virginia finds that modern business infrastructure allows businesses to locate their administrative or manufacturing facilities with minimal regard to the location of markets or the transportation of raw materials and finished goods, and that the economic vitality of the Commonwealth would be enhanced if such facilities were established in Virginia. Accordingly, the provisions of this section targeting the credit to major business facilities and limiting the credit to those companies which establish a major business facility in Virginia are integral to the purpose of the credit earned pursuant to this section and shall not be deemed severable.U\n\nFor taxable years beginning on and after January 1, 2019, and notwithstanding the provisions of \u00a7 58.1-3 or any other provision of law, the Department of Taxation, in consultation with the Virginia Economic Development Partnership, shall publish the following information by November 1 of each year for the 12-month period ending on the preceding December 31:1\n\nThe location of sites used for major business facilities for which a credit was claimed;2\n\nThe North American Industry Classification System codes used for the major business facilities for which a credit was claimed;3\n\nThe number of qualified full time employees for whom a credit was claimed; and4\n\nThe total cost to the Commonwealth’s general fund of the credits claimed.\n\t\t\t\tSuch information shall be published by the Department, regardless of how few taxpayers claimed the tax credit, in a manner that prevents the identification of particular taxpayers, reports, returns, or items.","order_by":null,"text":{"0":{"id":227282,"text":"For taxable years beginning on and after January 1, 1995, but before July 1, 2025, a taxpayer shall be allowed a credit against the taxes imposed by Articles 2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 et seq.), and 10 (§ 58.1-400 et seq.) of Chapter 3; Chapter 12 (§ 58.1-1200 et seq.); Article 1 (§ 58.1-2500 et seq.) of Chapter 25; or Article 2 (§ 58.1-2620 et seq.) of Chapter 26 as set forth in this section.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":227283,"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":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":227284,"text":"A “major business facility” is a company that satisfies the following criteria:","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"C1"},"3":{"id":227285,"text":"Subject to the provisions of subsections K or L, the establishment or expansion of the company shall result in the creation of at least 50 jobs for qualified full-time employees; the first such 50 jobs shall be referred to as the “threshold amount”; and","type":"section","prefixes":["C","1"],"prefix":"1","entire_prefix":"C1","prefix_anchor":"C1","level":2,"prior_prefix":"C","next_prefix":"C2"},"4":{"id":227286,"text":"The company is engaged in any business in the Commonwealth, except a retail trade business if such trade is the principal activity of an individual facility in the Commonwealth. Examples of types of major business facilities that are eligible for the credit provided under this section include, but are not limited to, a headquarters, or portion of such a facility, where company employees are physically employed, and where the majority of the company’s financial, personnel, legal or planning functions are handled either on a regional or national basis. A company primarily engaged in the Commonwealth in the business of manufacturing or mining; agriculture, forestry or fishing; transportation or communications; or a public utility subject to the corporation income tax shall be deemed to have established or expanded a major business facility in the Commonwealth if it meets the requirements of subdivision 1 during a single taxable year and such facilities are not retail establishments. A major business facility shall also include facilities that perform central management or administrative activities, whether operated as a separate trade or business, or as a separate support operation of another business. Central management or administrative activities include, but are not limited to, general management; accounting; computing; tabulating; purchasing; transportation or shipping; engineering and systems planning; advertising; technical sales and support operations; central administrative offices and warehouses; research, development and testing laboratories; computer-programming, data-processing and other computer-related services facilities; and legal, financial, insurance, and real estate services. The terms used in this subdivision to refer to various types of businesses shall have the same meanings as those terms are commonly defined in the Standard Industrial Classification Manual.","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C1","next_prefix":"D"},"5":{"id":227287,"text":"For purposes of this section, the “credit year” is the first taxable year following the taxable year in which the major business facility commenced or expanded operations.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C2","next_prefix":"E"},"6":{"id":227288,"text":"The Department of Taxation shall make all determinations as to the classification of a major business facility in accordance with the provisions of this section.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"7":{"id":227289,"text":"A “qualified full-time employee” means an employee filling a new, permanent full-time position in a major business facility in the Commonwealth. A “new, permanent full-time position” is a job of an indefinite duration, created by the company as a result of the establishment or expansion of a major business facility in the Commonwealth, requiring a minimum of 35 hours of an employee’s time a week for the entire normal year of the company’s operations, which “normal year” shall consist of at least 48 weeks, or a position of indefinite duration which requires a minimum of 35 hours of an employee’s time a week for the portion of the taxable year in which the employee was initially hired for, or transferred to, the major business 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 new major business facility and positions in building and grounds maintenance, security, and other such positions which are ancillary to the principal activities performed by the employees at a major business facility shall not qualify as new, permanent full-time positions.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"8":{"id":227290,"text":"For any major business facility, the amount of credit earned pursuant to this section shall be equal to $1,000 per qualified full-time employee, over the threshold amount, employed during the credit year. The credit shall be allowed ratably, with one-third of the credit amount allowed annually for three years beginning with the credit year. However, for taxable years beginning on or after January 1, 2009, one-half of the credit amount shall be allowed each year for two years. The portion of the $1,000 credit earned with respect to any qualified full-time employee who is employed in the Commonwealth for less than 12 full months during the credit year will be determined by multiplying the credit amount by a fraction, the numerator of which is the number of full months that the qualified full-time employee worked for the major business facility in the Commonwealth during the credit year, and the denominator of which is 12. A separate credit year and a three-year allowance period shall exist for each distinct major business facility of a single taxpayer, except for credits allowed for taxable years beginning on or after January 1, 2009, when a two-year allowance period shall exist for each distinct major business facility of a single taxpayer.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"9":{"id":227291,"text":"The amount of credit allowed pursuant to this section shall not exceed the tax imposed for such taxable year. Any credit not usable for the taxable year the credit was allowed may be, to the extent usable, carried over for the next 10 succeeding taxable years. No credit shall be carried back to a preceding taxable year. In the event that a taxpayer who is subject to the tax limitation imposed pursuant to this subsection is allowed another credit pursuant to any other section of the Code of Virginia, or has a credit carryover from a preceding taxable year, such taxpayer shall be considered to have first utilized any credit allowed which does not have a carryover provision, and then any credit which is carried forward from a preceding taxable year, prior to the utilization of any credit allowed pursuant to this section.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G","next_prefix":"I"},"10":{"id":227292,"text":"No credit shall be earned pursuant to this section for any employee (i) for whom a credit under this section was previously earned by a related party as defined by Internal Revenue Code § 267(b) or a trade or business under common control as defined by Internal Revenue Code § 52(b); (ii) who was previously employed in the same job function in Virginia by a related party as defined by Internal Revenue Code § 267(b) or a trade or business under common control as defined by Internal Revenue Code § 52(b); (iii) whose job function was previously performed at a different location in Virginia by an employee of the taxpayer, a related party as defined by Internal Revenue Code § 267(b), or a trade or business under common control as defined by Internal Revenue Code § 52(b); or (iv) whose job function previously qualified for a credit under this section at a different major business facility on behalf of the taxpayer, a related party as defined by Internal Revenue Code § 267(b), or a trade or business under common control as defined by Internal Revenue Code § 52(b).","type":"section","prefixes":["I"],"prefix":"I","entire_prefix":"I","prefix_anchor":"I","level":1,"prior_prefix":"H","next_prefix":"J"},"11":{"id":227293,"text":"Subject to the provisions of subsections K or L, recapture of this credit, 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 decreases below the average number of qualified full-time employees employed during the credit year. Such tax increase amount shall be determined by (i) recomputing the credit which would have been earned for the original credit year using the decreased number of qualified full-time employees and (ii) subtracting such recomputed credit from the amount of credit previously earned. In the event that the average number of qualifying full-time employees employed at a major business facility falls below the threshold amount in any of the five taxable years succeeding the credit year, all credits earned with respect to such major business facility shall be recaptured. No credit amount will be recaptured more than once pursuant to this subsection. Any recapture pursuant to this section shall reduce credits earned but not yet allowed, and credits allowed but carried forward, before the taxpayer’s tax liability may be increased.","type":"section","prefixes":["J"],"prefix":"J","entire_prefix":"J","prefix_anchor":"J","level":1,"prior_prefix":"I","next_prefix":"K"},"12":{"id":227294,"text":"In the event that a major business facility is located in an economically distressed area or in an enterprise zone as defined in Chapter 49 (§ 59.1-538 et seq.) of Title 59.1 during a credit year, the threshold amount required to qualify for a credit pursuant to this section and to avoid full recapture shall be reduced from 50 to 25 for purposes of subdivision C 1 and subsection J. An area shall qualify as economically distressed if it is a city or county with an unemployment rate for the preceding year of at least 0.5 percent higher than the average statewide unemployment rate for such year. The Virginia Economic Development Partnership shall identify and publish a list of all economically distressed areas at least annually.","type":"section","prefixes":["K"],"prefix":"K","entire_prefix":"K","prefix_anchor":"K","level":1,"prior_prefix":"J","next_prefix":"L"},"13":{"id":227295,"text":"For taxable years beginning on or after January 1, 2004, but before January 1, 2006, in the event that a major business facility is located in a severely economically distressed area, the threshold amount required to qualify for a credit pursuant to this section and to avoid full recapture shall be reduced from 100 to 25 for purposes of subdivision C 1 and subsection J. However, the total amount of credit allowable under this subsection shall not exceed $100,000 in aggregate. An area shall qualify as severely economically distressed if it is a city or county with an unemployment rate for the preceding year of at least twice the average statewide unemployment rate for such year. The Virginia Economic Development Partnership shall identify and publish a list of all severely economically distressed areas at least annually.","type":"section","prefixes":["L"],"prefix":"L","entire_prefix":"L","prefix_anchor":"L","level":1,"prior_prefix":"K","next_prefix":"M"},"14":{"id":227296,"text":"The Tax Commissioner shall promulgate regulations, in accordance with the Administrative Process Act (§ 2.2-4000 et seq.), relating to (i) the computation, carryover, and recapture of the credit provided under this section; (ii) defining criteria for (a) a major business facility, (b) qualifying full-time employees at such facility, and (c) economically distressed areas; and (iii) the computation, carryover, recapture, and redemption of the credit by affiliated companies pursuant to subsection S.","type":"section","prefixes":["M"],"prefix":"M","entire_prefix":"M","prefix_anchor":"M","level":1,"prior_prefix":"L","next_prefix":"N"},"15":{"id":227297,"text":"The provisions of this section shall apply only in instances where an announcement of intent to establish or expand a major business facility is made on or after January 1, 1994. An announcement of intent to establish or expand a major business facility includes, but is not limited to, a press conference or extensive press coverage, providing information with respect to the impact of the project on the economy of the area where the major business facility is to be established or expanded and the Commonwealth as a whole.","type":"section","prefixes":["N"],"prefix":"N","entire_prefix":"N","prefix_anchor":"N","level":1,"prior_prefix":"M","next_prefix":"O"},"16":{"id":227298,"text":"The credit allowed pursuant to this section shall be granted to the person who pays taxes for the qualified full-time employees pursuant to Chapter 5 (§ 60.2-500 et seq.) of Title 60.2.","type":"section","prefixes":["O"],"prefix":"O","entire_prefix":"O","prefix_anchor":"O","level":1,"prior_prefix":"N","next_prefix":"P"},"17":{"id":227299,"text":"No person shall claim a credit allowed pursuant to this section and the credit allowed pursuant to § 58.1-439.2. Any qualified business firm receiving an enterprise zone job creation grant under § 59.1-547 shall not be eligible to receive a major business facility job tax credit pursuant to this section for any job used to qualify for the enterprise zone job creation grant.","type":"section","prefixes":["P"],"prefix":"P","entire_prefix":"P","prefix_anchor":"P","level":1,"prior_prefix":"O","next_prefix":"Q"},"18":{"id":227300,"text":"No person operating a business in the Commonwealth pursuant to Chapter 29 (§ 59.1-364 et seq.) of Title 59.1 shall claim a credit pursuant to this section.","type":"section","prefixes":["Q"],"prefix":"Q","entire_prefix":"Q","prefix_anchor":"Q","level":1,"prior_prefix":"P","next_prefix":"R"},"19":{"id":227301,"text":"Notwithstanding subsection O, a taxpayer may, for the purpose of determining the number of qualified full-time employees at a major business facility, include the employees of a contractor or a subcontractor if such employees are permanently assigned to the taxpayer’s major business facility. If the taxpayer includes the employees of a contractor or subcontractor in its total of qualified full-time employees, it shall enter into a contractual agreement with the contractor or subcontractor prohibiting the contractor or subcontractor from also claiming these employees in order to receive a credit given under this section. The taxpayer shall provide evidence satisfactory to the Department of Taxation that it has entered into such a contract.","type":"section","prefixes":["R"],"prefix":"R","entire_prefix":"R","prefix_anchor":"R","level":1,"prior_prefix":"Q","next_prefix":"S"},"20":{"id":227302,"text":"For purposes of satisfying the criteria of subdivision C 1, two or more affiliated companies may elect to aggregate the number of jobs created for qualified full-time employees as the result of the establishment or expansion by the individual companies in order to qualify for the credit allowed pursuant to this section. For purposes of this subsection, “affiliated companies” means two or more companies related to each other such that (i) one company owns at least 80 percent of the voting power of the other or others or (ii) at least 80 percent of the voting power of two or more companies is owned by the same interests.","type":"section","prefixes":["S"],"prefix":"S","entire_prefix":"S","prefix_anchor":"S","level":1,"prior_prefix":"R","next_prefix":"T"},"21":{"id":227303,"text":"The General Assembly of Virginia finds that modern business infrastructure allows businesses to locate their administrative or manufacturing facilities with minimal regard to the location of markets or the transportation of raw materials and finished goods, and that the economic vitality of the Commonwealth would be enhanced if such facilities were established in Virginia. Accordingly, the provisions of this section targeting the credit to major business facilities and limiting the credit to those companies which establish a major business facility in Virginia are integral to the purpose of the credit earned pursuant to this section and shall not be deemed severable.","type":"section","prefixes":["T"],"prefix":"T","entire_prefix":"T","prefix_anchor":"T","level":1,"prior_prefix":"S","next_prefix":"U"},"22":{"id":227304,"text":"For taxable years beginning on and after January 1, 2019, and notwithstanding the provisions of \u00a7 58.1-3 or any other provision of law, the Department of Taxation, in consultation with the Virginia Economic Development Partnership, shall publish the following information by November 1 of each year for the 12-month period ending on the preceding December 31:","type":"section","prefixes":["U"],"prefix":"U","entire_prefix":"U","prefix_anchor":"U","level":1,"prior_prefix":"T","next_prefix":"U1"},"23":{"id":227305,"text":"The location of sites used for major business facilities for which a credit was claimed;","type":"section","prefixes":["U","1"],"prefix":"1","entire_prefix":"U1","prefix_anchor":"U1","level":2,"prior_prefix":"U","next_prefix":"U2"},"24":{"id":227306,"text":"The North American Industry Classification System codes used for the major business facilities for which a credit was claimed;","type":"section","prefixes":["U","2"],"prefix":"2","entire_prefix":"U2","prefix_anchor":"U2","level":2,"prior_prefix":"U1","next_prefix":"U3"},"25":{"id":227307,"text":"The number of qualified full time employees for whom a credit was claimed; and","type":"section","prefixes":["U","3"],"prefix":"3","entire_prefix":"U3","prefix_anchor":"U3","level":2,"prior_prefix":"U2","next_prefix":"U4"},"26":{"id":227308,"text":"The total cost to the Commonwealth’s general fund of the credits claimed.\n\t\t\t\tSuch information shall be published by the Department, regardless of how few taxpayers claimed the tax credit, in a manner that prevents the identification of particular taxpayers, reports, returns, or items.","type":"section","prefixes":["U","4"],"prefix":"4","entire_prefix":"U4","prefix_anchor":"U4","level":2,"prior_prefix":"U3"}},"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 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This law was first created in 1994. The record of its establishment is cataloged in chapters 750<\/a> and 768<\/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 12 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 1995, chapter 365<\/a>; in 1996, chapter 874<\/a>; in 1997, chapters 786<\/a> and 852<\/a>; in 1998, chapter 367<\/a>; in 2004, chapters 170<\/a> and 619<\/a>; in 2005, chapters 863<\/a> and 884<\/a>; in 2009, chapter 753<\/a>; in 2010, chapters 363<\/a> and 469<\/a>; in 2012, chapters 93<\/a>, 445<\/a>, and 475<\/a>; in 2015, chapter 451<\/a>; in 2019, chapter 699<\/a>; in 2022, chapters 11<\/a> and 203<\/a>.<\/p>","references":[{"id":85768,"section_number":"2.2-2309","catch_line":"Creation, administration, and management of Virginia Export Fund","order_by":null,"url":"\/2.2-2309\/"},{"id":55867,"section_number":"58.1-202","catch_line":"General powers and duties of Tax Commissioner","order_by":null,"url":"\/58.1-202\/"},{"id":57964,"section_number":"58.1-439.12:05","catch_line":"Green and alternative energy job creation tax credit","order_by":null,"url":"\/58.1-439.12_05\/"},{"id":66012,"section_number":"58.1-439.12:06","catch_line":"International trade facility tax credit","order_by":null,"url":"\/58.1-439.12_06\/"},{"id":57313,"section_number":"59.1-547","catch_line":"Enterprise zone job creation grants","order_by":null,"url":"\/59.1-547\/"},{"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":54678,"section_number":"58.1-1200","catch_line":"Title","order_by":null,"url":"\/58.1-1200\/"},{"id":56221,"section_number":"58.1-2500","catch_line":"Definitions","order_by":null,"url":"\/58.1-2500\/"},{"id":54193,"section_number":"58.1-2620","catch_line":"Basis of tax","order_by":null,"url":"\/58.1-2620\/"},{"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":82371,"section_number":"58.1-360","catch_line":"Imposition of tax","order_by":null,"url":"\/58.1-360\/"},{"id":60955,"section_number":"58.1-400","catch_line":"Imposition of tax","order_by":null,"url":"\/58.1-400\/"},{"id":54927,"section_number":"58.1-439.2","catch_line":" Coalfield employment enhancement tax credit","order_by":null,"url":"\/58.1-439.2\/"},{"id":80702,"section_number":"59.1-364","catch_line":"Control of racing with pari-mutuel wagering","order_by":null,"url":"\/59.1-364\/"},{"id":85120,"section_number":"59.1-538","catch_line":"Short title","order_by":null,"url":"\/59.1-538\/"},{"id":57313,"section_number":"59.1-547","catch_line":"Enterprise zone job creation grants","order_by":null,"url":"\/59.1-547\/"},{"id":79987,"section_number":"60.2-500","catch_line":"Determination with respect to whether employing unit is employer; whether services constitute employment; or whether business transfer is illegal","order_by":null,"url":"\/60.2-500\/"}],"permalink":{"id":253539,"object_type":"law","relational_id":62311,"identifier":"58.1-439","token":"58.1\/I\/3\/13\/58.1-439","url":"\/58.1-439\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/58.1-439\/","token":"58.1\/I\/3\/13\/58.1-439","dublin_core":{"Title":"Major business facility job tax credit","Type":"Text","Format":"text\/html","Identifier":"\u00a7 58.1-439","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> For taxable years beginning on and after January 1, 1995, but before July 1, 2025, a taxpayer<\/span> shall be allowed a credit against the taxes imposed by Articles 2 (§ 58.1-320<\/a> et seq.), 6 (§ 58.1-360<\/a> et seq.), and 10 (§ 58.1-400<\/a> et seq.) of Chapter 3; Chapter 12 (§ 58.1-1200<\/a> et seq.); Article 1 (§ 58.1-2500<\/a> et seq.) of Chapter 25; or Article 2 (§ 58.1-2620<\/a> et seq.) of Chapter 26 as set forth in this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/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

C.<\/span> A “major business facility” is a company that satisfies the following criteria: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Subject to the provisions of subsections K or L, the establishment or expansion of the company shall result in the creation of at least 50 jobs for qualified full-time employees<\/span>; the first such 50 jobs shall be referred to as the “threshold amount”; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The company is engaged in any business in the Commonwealth, except a retail trade business if such trade is the principal activity of an individual<\/span> facility in the Commonwealth. Examples of types of major business facilities that are eligible for the credit provided under this section include, but are not limited to, a headquarters, or portion of such a facility, where company employees are physically employed, and where the majority of the company’s financial, personnel, legal or planning functions are handled either on a regional or national basis. A company primarily engaged in the Commonwealth in the business of manufacturing or mining; agriculture, forestry or fishing; transportation or communications; or a public utility subject to the corporation<\/span> income tax shall be deemed to have established or expanded a major business facility in the Commonwealth if it meets the requirements of subdivision 1 during a single taxable year and such facilities are not retail establishments. A major business facility shall also include facilities that perform central management or administrative activities, whether operated as a separate trade or business, or as a separate support operation of another business. Central management or administrative activities include, but are not limited to, general management; accounting; computing; tabulating; purchasing; transportation or shipping; engineering and systems planning; advertising; technical sales<\/span> and support operations; central administrative offices and warehouses; research, development and testing laboratories; computer-programming, data-processing and other computer-related services facilities; and legal, financial, insurance, and real estate<\/span> services. The terms used in this subdivision to refer to various types of businesses shall have the same meanings as those terms are commonly defined in the Standard Industrial Classification Manual. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> For purposes of this section, the “credit year” is the first taxable year following the taxable year in which the major business facility commenced or expanded operations. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The Department<\/span> of Taxation shall make all determinations as to the classification of a major business facility in accordance with the provisions of this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> A “qualified full-time employee<\/span>” means an employee filling a new, permanent full-time position<\/span> in a major business facility in the Commonwealth. A “new, permanent full-time position<\/span>” is a job of an indefinite duration, created by the company as a result of the establishment or expansion of a major business facility in the Commonwealth, requiring a minimum of 35 hours of an employee’s time a week for the entire normal year<\/span> of the company’s operations, which “normal year<\/span>” shall consist of at least 48 weeks, or a position of indefinite duration which requires a minimum of 35 hours of an employee’s time a week for the portion of the taxable year in which the employee was initially hired for, or transferred to, the major business 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 new major business facility and positions in building and grounds maintenance, security, and other such positions which are ancillary to the principal activities performed by the employees at a major business facility shall not qualify as new, permanent full-time positions<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> For any major business facility, the amount of credit earned pursuant to this section shall be equal to $1,000 per qualified full-time employee<\/span>, over the threshold amount, employed during the credit year. The credit shall be allowed ratably, with one-third of the credit amount allowed annually for three years beginning with the credit year. However, for taxable years beginning on or after January 1, 2009, one-half of the credit amount shall be allowed each year for two years. The portion of the $1,000 credit earned with respect to any qualified full-time employee<\/span> who is employed in the Commonwealth for less than 12 full months during the credit year will be determined by multiplying the credit amount by a fraction, the numerator of which is the number of full months that the qualified full-time employee<\/span> worked for the major business facility in the Commonwealth during the credit year, and the denominator of which is 12. A separate credit year and a three-year allowance period shall exist for each distinct major business facility of a single taxpayer<\/span>, except for credits allowed for taxable years beginning on or after January 1, 2009, when a two-year allowance period shall exist for each distinct major business facility of a single taxpayer<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> The amount of credit allowed pursuant to this section shall not exceed the tax imposed for such taxable year. Any credit not usable for the taxable year the credit was allowed may be, to the extent usable, carried over for the next 10 succeeding taxable years. No credit shall be carried back to a preceding taxable year. In the event that a taxpayer<\/span> who is subject to the tax limitation imposed pursuant to this subsection is allowed another credit pursuant to any other section of the Code of Virginia, or has a credit carryover from a preceding taxable year, such taxpayer<\/span> shall be considered to have first utilized any credit allowed which does not have a carryover provision, and then any credit which is carried forward from a preceding taxable year, prior to the utilization of any credit allowed pursuant to this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

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

J.<\/span> Subject to the provisions of subsections K or L, recapture of this credit, 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> decreases below the average number of qualified full-time employees<\/span> employed during the credit year. Such tax increase amount shall be determined by (i) recomputing the credit which would have been earned for the original credit year using the decreased number of qualified full-time employees<\/span> and (ii) subtracting such recomputed credit from the amount of credit previously earned. In the event that the average number of qualifying full-time employees employed at a major business facility falls below the threshold amount in any of the five taxable years succeeding the credit year, all credits earned with respect to such major business facility shall be recaptured. No credit amount will be recaptured more than once pursuant to this subsection. Any recapture pursuant to this section shall reduce credits earned but not yet allowed, and credits allowed but carried forward, before the taxpayer<\/span>’s tax liability may be increased. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

K.<\/span> In the event that a major business facility is located in an economically distressed area or in an enterprise zone as defined in Chapter 49 (§ 59.1-538<\/a> et seq.) of Title 59.1 during a credit year, the threshold amount required to qualify for a credit pursuant to this section and to avoid full recapture shall be reduced from 50 to 25 for purposes of subdivision C 1 and subsection J. An area shall qualify as economically distressed if it is a city or county with an unemployment rate for the preceding year of at least 0.5 percent higher than the average statewide unemployment rate for such year. The Virginia Economic Development Partnership shall identify and publish a list of all economically distressed areas at least annually. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

L.<\/span> For taxable years beginning on or after January 1, 2004, but before January 1, 2006, in the event that a major business facility is located in a severely economically distressed area, the threshold amount required to qualify for a credit pursuant to this section and to avoid full recapture shall be reduced from 100 to 25 for purposes of subdivision C 1 and subsection J. However, the total amount of credit allowable under this subsection shall not exceed $100,000 in aggregate. An area shall qualify as severely economically distressed if it is a city or county with an unemployment rate for the preceding year of at least twice the average statewide unemployment rate for such year. The Virginia Economic Development Partnership shall identify and publish a list of all severely economically distressed areas at least annually. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

M.<\/span> The Tax Commissioner<\/span> shall promulgate regulations, in accordance with the Administrative Process Act (§ 2.2-4000<\/a> et seq.), relating to (i) the computation, carryover, and recapture of the credit provided under this section; (ii) defining criteria for (a) a major business facility, (b) qualifying full-time employees at such facility, and (c) economically distressed areas; and (iii) the computation, carryover, recapture, and redemption<\/span> of the credit by affiliated companies<\/span> pursuant to subsection S. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

N.<\/span> The provisions of this section shall apply only in instances where an announcement of intent<\/span> to establish or expand a major business facility is made on or after January 1, 1994. An announcement of intent<\/span> to establish or expand a major business facility includes, but is not limited to, a press conference or extensive press coverage, providing information with respect to the impact of the project on the economy of the area where the major business facility is to be established or expanded and the Commonwealth as a whole. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

O.<\/span> The credit allowed pursuant to this section shall be granted to the person who pays taxes for the qualified full-time employees<\/span> pursuant to Chapter 5 (§ 60.2-500<\/a> et seq.) of Title 60.2. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

P.<\/span> No person shall claim a credit allowed pursuant to this section and the credit allowed pursuant to § 58.1-439.2<\/a>. Any qualified business firm receiving an enterprise zone job creation grant under § 59.1-547<\/a> shall not be eligible to receive a major business facility job tax credit pursuant to this section for any job used to qualify for the enterprise zone job creation grant. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

Q.<\/span> No person operating a business in the Commonwealth pursuant to Chapter 29 (§ 59.1-364<\/a> et seq.) of Title 59.1 shall claim a credit pursuant to this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

R.<\/span> Notwithstanding subsection O, a taxpayer<\/span> may, for the purpose of determining the number of qualified full-time employees<\/span> at a major business facility, include the employees of a contractor or a subcontractor if such employees are permanently assigned to the taxpayer<\/span>’s major business facility. If the taxpayer<\/span> includes the employees of a contractor or subcontractor in its total of qualified full-time employees<\/span>, it shall enter into a contractual agreement with the contractor or subcontractor prohibiting the contractor or subcontractor from also claiming these employees in order<\/span> to receive a credit given under this section. The taxpayer<\/span> shall provide evidence<\/span> satisfactory to the Department<\/span> of Taxation that it has entered into such a contract<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

S.<\/span> For purposes of satisfying the criteria of subdivision C 1, two or more affiliated companies<\/span> may elect to aggregate the number of jobs created for qualified full-time employees<\/span> as the result of the establishment or expansion by the individual<\/span> companies in order<\/span> to qualify for the credit allowed pursuant to this section. For purposes of this subsection, “affiliated companies<\/span>” means two or more companies related to each other such that (i) one company owns at least 80 percent of the voting power of the other or others or (ii) at least 80 percent of the voting power of two or more companies is owned by the same interests. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

T.<\/span> The General Assembly of Virginia finds that modern business infrastructure allows businesses to locate their administrative or manufacturing facilities with minimal regard to the location of markets or the transportation of raw materials<\/span> and finished goods, and that the economic vitality of the Commonwealth would be enhanced if such facilities were established in Virginia. Accordingly, the provisions of this section targeting the credit to major business facilities and limiting the credit to those companies which establish a major business facility in Virginia are integral to the purpose of the credit earned pursuant to this section and shall not be deemed severable. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

U.<\/span> For taxable years beginning on and after January 1, 2019, and notwithstanding the provisions of \u00a7 58.1-3<\/a> or any other provision of law<\/span>, the Department<\/span> of Taxation, in consultation with the Virginia Economic Development Partnership, shall publish the following information by November 1 of each year for the 12-month period ending on the preceding December 31: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> The location of sites used for major business facilities for which a credit was claimed; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The North American Industry Classification System codes used for the major business facilities for which a credit was claimed; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The number of qualified full time employees for whom a credit was claimed; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> The total cost to the Commonwealth’s general fund of the credits claimed.\n\t\t\t\tSuch information shall be published by the Department<\/span>, regardless of how few taxpayers<\/span> claimed the tax credit, in a manner that prevents the identification of particular taxpayers<\/span>, reports, returns, or items. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nMAJOR BUSINESS FACILITY JOB TAX CREDIT (\u00a7 58.1-439)\n\nA. For taxable years beginning on and after January 1, 1995, but before July 1,\n2025, a taxpayer shall be allowed a credit against the taxes imposed by Articles\n2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 et seq.), and 10 (§\n58.1-400 et seq.) of Chapter 3; Chapter 12 (§ 58.1-1200 et seq.); Article 1\n(§ 58.1-2500 et seq.) of Chapter 25; or Article 2 (§ 58.1-2620 et\nseq.) of Chapter 26 as set forth in this section.\n\nB. 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\nC. A “major business facility” is a company that satisfies the\nfollowing criteria:\n\n 1. Subject to the provisions of subsections K or L, the establishment or\n expansion of the company shall result in the creation of at least 50 jobs for\n qualified full-time employees; the first such 50 jobs shall be referred to as\n the “threshold amount”; and\n\n 2. The company is engaged in any business in the Commonwealth, except a retail\n trade business if such trade is the principal activity of an individual\n facility in the Commonwealth. Examples of types of major business facilities\n that are eligible for the credit provided under this section include, but are\n not limited to, a headquarters, or portion of such a facility, where company\n employees are physically employed, and where the majority of the\n company’s financial, personnel, legal or planning functions are handled\n either on a regional or national basis. A company primarily engaged in the\n Commonwealth in the business of manufacturing or mining; agriculture, forestry\n or fishing; transportation or communications; or a public utility subject to\n the corporation income tax shall be deemed to have established or expanded a\n major business facility in the Commonwealth if it meets the requirements of\n subdivision 1 during a single taxable year and such facilities are not retail\n establishments. A major business facility shall also include facilities that\n perform central management or administrative activities, whether operated as a\n separate trade or business, or as a separate support operation of another\n business. Central management or administrative activities include, but are not\n limited to, general management; accounting; computing; tabulating; purchasing;\n transportation or shipping; engineering and systems planning; advertising;\n technical sales and support operations; central administrative offices and\n warehouses; research, development and testing laboratories;\n computer-programming, data-processing and other computer-related services\n facilities; and legal, financial, insurance, and real estate services. The\n terms used in this subdivision to refer to various types of businesses shall\n have the same meanings as those terms are commonly defined in the Standard\n Industrial Classification Manual.\n\nD. For purposes of this section, the “credit year” is the first\ntaxable year following the taxable year in which the major business facility\ncommenced or expanded operations.\n\nE. The Department of Taxation shall make all determinations as to the\nclassification of a major business facility in accordance with the provisions of\nthis section.\n\nF. A “qualified full-time employee” means an employee filling a new,\npermanent full-time position in a major business facility in the Commonwealth. A\n“new, permanent full-time position” is a job of an indefinite\nduration, created by the company as a result of the establishment or expansion\nof a major business facility in the Commonwealth, requiring a minimum of 35\nhours of an employee’s time a week for the entire normal year of the\ncompany’s operations, which “normal year” shall consist of at\nleast 48 weeks, or a position of indefinite duration which requires a minimum of\n35 hours of an employee’s time a week for the portion of the taxable year\nin which the employee was initially hired for, or transferred to, the major\nbusiness facility in the Commonwealth. Seasonal or temporary positions, or a job\ncreated when a job function is shifted from an existing location in the\nCommonwealth to the new major business facility and positions in building and\ngrounds maintenance, security, and other such positions which are ancillary to\nthe principal activities performed by the employees at a major business facility\nshall not qualify as new, permanent full-time positions.\n\nG. For any major business facility, the amount of credit earned pursuant to this\nsection shall be equal to $1,000 per qualified full-time employee, over the\nthreshold amount, employed during the credit year. The credit shall be allowed\nratably, with one-third of the credit amount allowed annually for three years\nbeginning with the credit year. However, for taxable years beginning on or after\nJanuary 1, 2009, one-half of the credit amount shall be allowed each year for\ntwo years. The portion of the $1,000 credit earned with respect to any qualified\nfull-time employee who is employed in the Commonwealth for less than 12 full\nmonths during the credit year will be determined by multiplying the credit\namount by a fraction, the numerator of which is the number of full months that\nthe qualified full-time employee worked for the major business facility in the\nCommonwealth during the credit year, and the denominator of which is 12. A\nseparate credit year and a three-year allowance period shall exist for each\ndistinct major business facility of a single taxpayer, except for credits\nallowed for taxable years beginning on or after January 1, 2009, when a two-year\nallowance period shall exist for each distinct major business facility of a\nsingle taxpayer.\n\nH. The amount of credit allowed pursuant to this section shall not exceed the\ntax imposed for such taxable year. Any credit not usable for the taxable year\nthe credit was allowed may be, to the extent usable, carried over for the next\n10 succeeding taxable years. No credit shall be carried back to a preceding\ntaxable year. In the event that a taxpayer who is subject to the tax limitation\nimposed pursuant to this subsection is allowed another credit pursuant to any\nother section of the Code of Virginia, or has a credit carryover from a\npreceding taxable year, such taxpayer shall be considered to have first utilized\nany credit allowed which does not have a carryover provision, and then any\ncredit which is carried forward from a preceding taxable year, prior to the\nutilization of any credit allowed pursuant to this section.\n\nI. No credit shall be earned pursuant to this section for any employee (i) for\nwhom a credit under this section was previously earned by a related party as\ndefined by Internal Revenue Code § 267(b) or a trade or business under\ncommon control as defined by Internal Revenue Code § 52(b); (ii) who was\npreviously employed in the same job function in Virginia by a related party as\ndefined by Internal Revenue Code § 267(b) or a trade or business under\ncommon control as defined by Internal Revenue Code § 52(b); (iii) whose job\nfunction was previously performed at a different location in Virginia by an\nemployee of the taxpayer, a related party as defined by Internal Revenue Code\n§ 267(b), or a trade or business under common control as defined by\nInternal Revenue Code § 52(b); or (iv) whose job function previously\nqualified for a credit under this section at a different major business facility\non behalf of the taxpayer, a related party as defined by Internal Revenue Code\n§ 267(b), or a trade or business under common control as defined by\nInternal Revenue Code § 52(b).\n\nJ. Subject to the provisions of subsections K or L, recapture of this credit,\nunder the following circumstances, shall be accomplished by increasing the tax\nin any of the five years succeeding the taxable year in which a credit has been\nearned pursuant to this section if the number of qualified full-time employees\ndecreases below the average number of qualified full-time employees employed\nduring the credit year. Such tax increase amount shall be determined by (i)\nrecomputing the credit which would have been earned for the original credit year\nusing the decreased number of qualified full-time employees and (ii) subtracting\nsuch recomputed credit from the amount of credit previously earned. In the event\nthat the average number of qualifying full-time employees employed at a major\nbusiness facility falls below the threshold amount in any of the five taxable\nyears succeeding the credit year, all credits earned with respect to such major\nbusiness facility shall be recaptured. No credit amount will be recaptured more\nthan once pursuant to this subsection. Any recapture pursuant to this section\nshall reduce credits earned but not yet allowed, and credits allowed but carried\nforward, before the taxpayer’s tax liability may be increased.\n\nK. In the event that a major business facility is located in an economically\ndistressed area or in an enterprise zone as defined in Chapter 49 (§\n59.1-538 et seq.) of Title 59.1 during a credit year, the threshold amount\nrequired to qualify for a credit pursuant to this section and to avoid full\nrecapture shall be reduced from 50 to 25 for purposes of subdivision C 1 and\nsubsection J. An area shall qualify as economically distressed if it is a city\nor county with an unemployment rate for the preceding year of at least 0.5\npercent higher than the average statewide unemployment rate for such year. The\nVirginia Economic Development Partnership shall identify and publish a list of\nall economically distressed areas at least annually.\n\nL. For taxable years beginning on or after January 1, 2004, but before January\n1, 2006, in the event that a major business facility is located in a severely\neconomically distressed area, the threshold amount required to qualify for a\ncredit pursuant to this section and to avoid full recapture shall be reduced\nfrom 100 to 25 for purposes of subdivision C 1 and subsection J. However, the\ntotal amount of credit allowable under this subsection shall not exceed $100,000\nin aggregate. An area shall qualify as severely economically distressed if it is\na city or county with an unemployment rate for the preceding year of at least\ntwice the average statewide unemployment rate for such year. The Virginia\nEconomic Development Partnership shall identify and publish a list of all\nseverely economically distressed areas at least annually.\n\nM. The Tax Commissioner shall promulgate regulations, in accordance with the\nAdministrative Process Act (§ 2.2-4000 et seq.), relating to (i) the\ncomputation, carryover, and recapture of the credit provided under this section;\n(ii) defining criteria for (a) a major business facility, (b) qualifying\nfull-time employees at such facility, and (c) economically distressed areas; and\n(iii) the computation, carryover, recapture, and redemption of the credit by\naffiliated companies pursuant to subsection S.\n\nN. The provisions of this section shall apply only in instances where an\nannouncement of intent to establish or expand a major business facility is made\non or after January 1, 1994. An announcement of intent to establish or expand a\nmajor business facility includes, but is not limited to, a press conference or\nextensive press coverage, providing information with respect to the impact of\nthe project on the economy of the area where the major business facility is to\nbe established or expanded and the Commonwealth as a whole.\n\nO. The credit allowed pursuant to this section shall be granted to the person\nwho pays taxes for the qualified full-time employees pursuant to Chapter 5\n(§ 60.2-500 et seq.) of Title 60.2.\n\nP. No person shall claim a credit allowed pursuant to this section and the\ncredit allowed pursuant to § 58.1-439.2. Any qualified business firm\nreceiving an enterprise zone job creation grant under § 59.1-547 shall not\nbe eligible to receive a major business facility job tax credit pursuant to this\nsection for any job used to qualify for the enterprise zone job creation grant.\n\nQ. No person operating a business in the Commonwealth pursuant to Chapter 29\n(§ 59.1-364 et seq.) of Title 59.1 shall claim a credit pursuant to this\nsection.\n\nR. Notwithstanding subsection O, a taxpayer may, for the purpose of determining\nthe number of qualified full-time employees at a major business facility,\ninclude the employees of a contractor or a subcontractor if such employees are\npermanently assigned to the taxpayer’s major business facility. If the\ntaxpayer includes the employees of a contractor or subcontractor in its total of\nqualified full-time employees, it shall enter into a contractual agreement with\nthe contractor or subcontractor prohibiting the contractor or subcontractor from\nalso claiming these employees in order to receive a credit given under this\nsection. The taxpayer shall provide evidence satisfactory to the Department of\nTaxation that it has entered into such a contract.\n\nS. For purposes of satisfying the criteria of subdivision C 1, two or more\naffiliated companies may elect to aggregate the number of jobs created for\nqualified full-time employees as the result of the establishment or expansion by\nthe individual companies in order to qualify for the credit allowed pursuant to\nthis section. For purposes of this subsection, “affiliated\ncompanies” means two or more companies related to each other such that (i)\none company owns at least 80 percent of the voting power of the other or others\nor (ii) at least 80 percent of the voting power of two or more companies is\nowned by the same interests.\n\nT. The General Assembly of Virginia finds that modern business infrastructure\nallows businesses to locate their administrative or manufacturing facilities\nwith minimal regard to the location of markets or the transportation of raw\nmaterials and finished goods, and that the economic vitality of the Commonwealth\nwould be enhanced if such facilities were established in Virginia. Accordingly,\nthe provisions of this section targeting the credit to major business facilities\nand limiting the credit to those companies which establish a major business\nfacility in Virginia are integral to the purpose of the credit earned pursuant\nto this section and shall not be deemed severable.\n\nU. For taxable years beginning on and after January 1, 2019, and notwithstanding\nthe provisions of \u00a7 58.1-3 or any other provision of law, the Department of\nTaxation, in consultation with the Virginia Economic Development Partnership,\nshall publish the following information by November 1 of each year for the\n12-month period ending on the preceding December 31:\n\n 1. The location of sites used for major business facilities for which a credit\n was claimed;\n\n 2. The North American Industry Classification System codes used for the major\n business facilities for which a credit was claimed;\n\n 3. The number of qualified full time employees for whom a credit was claimed;\n and\n\n 4. The total cost to the Commonwealth’s general fund of the credits\n claimed.\n \t\t\t\tSuch information shall be published by the Department, regardless of how\n few taxpayers claimed the tax credit, in a manner that prevents the\n identification of particular taxpayers, reports, returns, or items.\n\nHISTORY: 1994, cc. 750, 768; 1995, c. 365; 1996, c. 874; 1997, cc. 786, 852;\n1998, c. 367; 2004, cc. 170, 619; 2005, cc. 863, 884; 2009, c. 753; 2010, cc.\n363, 469; 2012, cc. 93, 445, 475; 2015, c. 451; 2019, c. 699; 2022, cc. 11, 203.","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}}