{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/59.1-280.1.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/59.1-280.1.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/59.1-280.1.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/59.1-280.1.html"}],"law_id":73671,"edition_id":1,"section_id":73671,"structure_id":15244,"section_number":"59.1-280.1","catch_line":"Enterprise zone real property investment tax credit","history":"1995, c. 792; 1997, cc. 517, 634, 669; 1998, c. 759; 2005, cc. 863, 884; 2017, c. 451.","full_text":"A\n\nAs used in this section:\n\t\t\t“Large qualified zone resident” means a qualified zone resident making qualified zone investments in excess of $100 million when such qualified zone investments result in the creation of at least 200 permanent full-time positions.\n\t\t\t“Permanent full-time position” means a job of an indefinite duration at a business firm located within an enterprise zone requiring the employee to report for work within the enterprise zone, and requiring either (i) a minimum of 35 hours of an employee’s time a week for the entire normal year of the business firm’s operations, which “normal year” must consist of at least 48 weeks, (ii) 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 business firm, or (iii) a minimum of 1,680 hours per year if the standard fringe benefits are paid by the business firm for the employee. Seasonal or temporary positions, or a position created when a job function is shifted from an existing location in the Commonwealth to a business firm located within an enterprise zone shall not qualify as permanent full-time positions.\n\t\t\t“Qualified zone improvements” means the amount expended for improvements to rehabilitate or expand depreciable real property placed in service during the taxable year within an enterprise zone, provided that the total amount of such improvements equals or exceeds (i) $50,000 and (ii) the assessed value of the original facility immediately prior to the rehabilitation or expansion. “Qualified zone expenditures” includes any such expenditure regardless of whether it is considered properly chargeable to a capital account or deductible as a business expense under federal Treasury Regulations.\n\t\t\tQualified zone improvements include expenditures associated with any exterior, structural, mechanical, or electrical improvements necessary to expand or rehabilitate a building for commercial or industrial use and excavations, grading, paving, driveways, roads, sidewalks, landscaping, or other land improvements. Qualified zone improvements shall include, but not be limited to, costs associated with demolition, carpentry, sheetrock, plaster, painting, ceilings, fixtures, doors, windows, fire suppression systems, roofing and flashing, exterior repair, cleaning, and cleanup.\n\t\t\tQualified zone improvements shall not include:1\n\nThe cost of acquiring any real property or building; however, the cost of any newly constructed depreciable nonresidential real property (excluding land, land improvements, paving, grading, driveways, and interest) shall be considered to be a qualified zone improvement eligible for the credit if the total amount of such expenditure is at least $250,000 with respect to a single facility.2\n\n(i) The cost of furnishings; (ii) any expenditure associated with appraisal, architectural, engineering and interior design fees; (iii) loan fees, points, or capitalized interest; (iv) legal, accounting, realtor, sales and marketing, or other professional fees; (v) closing costs, permits, user fees, zoning fees, impact fees, and inspection fees; (vi) bids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities incurred during construction; (vii) utility hook-up or access fees; (viii) outbuildings; or (ix) the cost of any well or septic or sewer system.3\n\nThe basis of any property: (i) for which a credit under this section was previously granted; (ii) which was previously placed in service in Virginia by 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 (iii) which was previously in service in Virginia and has a basis in the hands of the person acquiring it, determined in whole or in part by reference to the basis of such property in the hands of the person from whom acquired or Internal Revenue Code § 1014 (a).\n\t\t\t\t“Qualified zone investments” means the sum of qualified zone improvements and the cost of machinery, tools and equipment used in manufacturing tangible personal property within an enterprise zone. For purposes of this section, machinery, tools and equipment shall only be deemed to include the cost of such property which is placed in service in the enterprise zone on or after July 1, 1995. Machinery, tools and equipment shall not include the basis of any property: (i) for which a credit under this section was previously granted; (ii) which was previously placed in service in Virginia by 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 (iii) which was previously in service in Virginia and has a basis in the hands of the person acquiring it, determined in whole or part by reference to the basis of such property in the hands of the person from whom acquired, or Internal Revenue Code § 1014 (a).\n\t\t\t\t“Qualified zone resident” means an owner or tenant of real property located in an enterprise zone who expands or rehabilitates such real property to facilitate the conduct of a trade or business within the enterprise zone.\n\t\t\t\t“Real property investment tax credit” means a credit against the taxes imposed by Articles 2 (§ 58.1-320 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 of Title 58.1.\n\t\t\t\t“Small qualified zone resident” means any qualified zone resident other than a large qualified zone resident.B\n\nFor all taxable years beginning on and after July 1, 1995, but before July 1, 2005, a qualified zone resident shall be allowed a real property investment tax credit as set forth in this section.C\n\nFor any small qualified zone resident, a real property investment tax credit shall be allowed in an amount equaling 30 percent of the qualified zone improvements. Any tax credit granted pursuant to this subsection is refundable; however, in no event shall the cumulative credit allowed to a small qualified zone resident pursuant to this subsection exceed $125,000 in any five-year period.D\n\nFor any large qualified zone resident, a real property investment tax credit shall be allowed in an amount of up to five percent of such qualified zone investments. The percentage amount of the real property investment tax credit granted to a large qualified zone resident shall be determined by agreement between the Department and the large qualified zone resident, provided such percentage amount shall not exceed five percent. The real property investment tax credit provided by this subsection shall not exceed the tax imposed for such taxable year, but any credit not usable for the taxable year generated may be carried over until the full amount of such credit has been utilized.E\n\nThe Department shall certify the nature and amount of qualified zone improvements and qualified zone investments eligible for a real property investment tax credit in any taxable year. Only qualified zone improvements and qualified zone investments that have been properly certified shall be eligible for the credit. Any form filed with the Department of Taxation or State Corporation Commission for the purpose of claiming the credit shall be accompanied by a copy of the certification furnished to the taxpayer by the Department. Any certification by the Department pursuant to this section shall not impair the authority of the Department of Taxation or State Corporation Commission to deny in whole or in part any claimed tax credit if the Department of Taxation or State Corporation Commission determines that the taxpayer is not entitled to such tax credit. The Department of Taxation or State Corporation Commission shall notify the Department in writing upon determining that a taxpayer is ineligible for such tax credit.F\n\nIn the case of a partnership, limited liability company or S corporation, the term “qualified zone resident” as used in this section means the partnership, limited liability company or S corporation. Credits granted to a partnership, limited liability company or S corporation shall be passed through to the partners, members or shareholders, respectively.G\n\nThe Tax Commissioner shall have the authority to issue regulations relating to the computation and carryover of the credit provided under this section.H\n\nIn the first taxable year only, the credit provided in this section shall be prorated equally against the taxpayer’s estimated payments made in the third and fourth quarters and the final payment, if such taxpayer is required to make quarterly payments.I\n\nTax credits awarded under this section and under § 59.1-280 shall not exceed $7.5 million annually until the end of fiscal year 2019.J\n\nThe provisions of this section shall apply only as follows:1\n\nTo those large qualified zone residents that have initiated use of enterprise zone tax credits pursuant to this section on or before July 1, 2005;2\n\nTo those large qualified zone residents that have signed agreements with the Commonwealth regarding the use of enterprise zone tax credits in accordance with this section on or before July 1, 2005.","order_by":null,"text":{"0":{"id":264948,"text":"As used in this section:\n\t\t\t“Large qualified zone resident” means a qualified zone resident making qualified zone investments in excess of $100 million when such qualified zone investments result in the creation of at least 200 permanent full-time positions.\n\t\t\t“Permanent full-time position” means a job of an indefinite duration at a business firm located within an enterprise zone requiring the employee to report for work within the enterprise zone, and requiring either (i) a minimum of 35 hours of an employee’s time a week for the entire normal year of the business firm’s operations, which “normal year” must consist of at least 48 weeks, (ii) 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 business firm, or (iii) a minimum of 1,680 hours per year if the standard fringe benefits are paid by the business firm for the employee. Seasonal or temporary positions, or a position created when a job function is shifted from an existing location in the Commonwealth to a business firm located within an enterprise zone shall not qualify as permanent full-time positions.\n\t\t\t“Qualified zone improvements” means the amount expended for improvements to rehabilitate or expand depreciable real property placed in service during the taxable year within an enterprise zone, provided that the total amount of such improvements equals or exceeds (i) $50,000 and (ii) the assessed value of the original facility immediately prior to the rehabilitation or expansion. “Qualified zone expenditures” includes any such expenditure regardless of whether it is considered properly chargeable to a capital account or deductible as a business expense under federal Treasury Regulations.\n\t\t\tQualified zone improvements include expenditures associated with any exterior, structural, mechanical, or electrical improvements necessary to expand or rehabilitate a building for commercial or industrial use and excavations, grading, paving, driveways, roads, sidewalks, landscaping, or other land improvements. Qualified zone improvements shall include, but not be limited to, costs associated with demolition, carpentry, sheetrock, plaster, painting, ceilings, fixtures, doors, windows, fire suppression systems, roofing and flashing, exterior repair, cleaning, and cleanup.\n\t\t\tQualified zone improvements shall not include:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":264949,"text":"The cost of acquiring any real property or building; however, the cost of any newly constructed depreciable nonresidential real property (excluding land, land improvements, paving, grading, driveways, and interest) shall be considered to be a qualified zone improvement eligible for the credit if the total amount of such expenditure is at least $250,000 with respect to a single facility.","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":264950,"text":"(i) The cost of furnishings; (ii) any expenditure associated with appraisal, architectural, engineering and interior design fees; (iii) loan fees, points, or capitalized interest; (iv) legal, accounting, realtor, sales and marketing, or other professional fees; (v) closing costs, permits, user fees, zoning fees, impact fees, and inspection fees; (vi) bids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities incurred during construction; (vii) utility hook-up or access fees; (viii) outbuildings; or (ix) the cost of any well or septic or sewer system.","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":264951,"text":"The basis of any property: (i) for which a credit under this section was previously granted; (ii) which was previously placed in service in Virginia by 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 (iii) which was previously in service in Virginia and has a basis in the hands of the person acquiring it, determined in whole or in part by reference to the basis of such property in the hands of the person from whom acquired or Internal Revenue Code § 1014 (a).\n\t\t\t\t“Qualified zone investments” means the sum of qualified zone improvements and the cost of machinery, tools and equipment used in manufacturing tangible personal property within an enterprise zone. For purposes of this section, machinery, tools and equipment shall only be deemed to include the cost of such property which is placed in service in the enterprise zone on or after July 1, 1995. Machinery, tools and equipment shall not include the basis of any property: (i) for which a credit under this section was previously granted; (ii) which was previously placed in service in Virginia by 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 (iii) which was previously in service in Virginia and has a basis in the hands of the person acquiring it, determined in whole or part by reference to the basis of such property in the hands of the person from whom acquired, or Internal Revenue Code § 1014 (a).\n\t\t\t\t“Qualified zone resident” means an owner or tenant of real property located in an enterprise zone who expands or rehabilitates such real property to facilitate the conduct of a trade or business within the enterprise zone.\n\t\t\t\t“Real property investment tax credit” means a credit against the taxes imposed by Articles 2 (§ 58.1-320 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 of Title 58.1.\n\t\t\t\t“Small qualified zone resident” means any qualified zone resident other than a large qualified zone resident.","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"B"},"4":{"id":264952,"text":"For all taxable years beginning on and after July 1, 1995, but before July 1, 2005, a qualified zone resident shall be allowed a real property investment tax credit as set forth in this section.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A3","next_prefix":"C"},"5":{"id":264953,"text":"For any small qualified zone resident, a real property investment tax credit shall be allowed in an amount equaling 30 percent of the qualified zone improvements. Any tax credit granted pursuant to this subsection is refundable; however, in no event shall the cumulative credit allowed to a small qualified zone resident pursuant to this subsection exceed $125,000 in any five-year period.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"6":{"id":264954,"text":"For any large qualified zone resident, a real property investment tax credit shall be allowed in an amount of up to five percent of such qualified zone investments. The percentage amount of the real property investment tax credit granted to a large qualified zone resident shall be determined by agreement between the Department and the large qualified zone resident, provided such percentage amount shall not exceed five percent. The real property investment tax credit provided by this subsection shall not exceed the tax imposed for such taxable year, but any credit not usable for the taxable year generated may be carried over until the full amount of such credit has been utilized.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"7":{"id":264955,"text":"The Department shall certify the nature and amount of qualified zone improvements and qualified zone investments eligible for a real property investment tax credit in any taxable year. Only qualified zone improvements and qualified zone investments that have been properly certified shall be eligible for the credit. Any form filed with the Department of Taxation or State Corporation Commission for the purpose of claiming the credit shall be accompanied by a copy of the certification furnished to the taxpayer by the Department. Any certification by the Department pursuant to this section shall not impair the authority of the Department of Taxation or State Corporation Commission to deny in whole or in part any claimed tax credit if the Department of Taxation or State Corporation Commission determines that the taxpayer is not entitled to such tax credit. The Department of Taxation or State Corporation Commission shall notify the Department in writing upon determining that a taxpayer is ineligible for such tax credit.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"8":{"id":264956,"text":"In the case of a partnership, limited liability company or S corporation, the term “qualified zone resident” as used in this section means the partnership, limited liability company or S corporation. Credits granted to a partnership, limited liability company or S corporation shall be passed through to the partners, members or shareholders, respectively.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"9":{"id":264957,"text":"The Tax Commissioner shall have the authority to issue regulations relating to the computation and carryover of the credit provided under this section.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"10":{"id":264958,"text":"In the first taxable year only, the credit provided in this section shall be prorated equally against the taxpayer’s estimated payments made in the third and fourth quarters and the final payment, if such taxpayer is required to make quarterly payments.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G","next_prefix":"I"},"11":{"id":264959,"text":"Tax credits awarded under this section and under § 59.1-280 shall not exceed $7.5 million annually until the end of fiscal year 2019.","type":"section","prefixes":["I"],"prefix":"I","entire_prefix":"I","prefix_anchor":"I","level":1,"prior_prefix":"H","next_prefix":"J"},"12":{"id":264960,"text":"The provisions of this section shall apply only as follows:","type":"section","prefixes":["J"],"prefix":"J","entire_prefix":"J","prefix_anchor":"J","level":1,"prior_prefix":"I","next_prefix":"J1"},"13":{"id":264961,"text":"To those large qualified zone residents that have initiated use of enterprise zone tax credits pursuant to this section on or before July 1, 2005;","type":"section","prefixes":["J","1"],"prefix":"1","entire_prefix":"J1","prefix_anchor":"J1","level":2,"prior_prefix":"J","next_prefix":"J2"},"14":{"id":264962,"text":"To those large qualified zone residents that have signed agreements with the Commonwealth regarding the use of enterprise zone tax credits in accordance with this section on or before July 1, 2005.","type":"section","prefixes":["J","2"],"prefix":"2","entire_prefix":"J2","prefix_anchor":"J2","level":2,"prior_prefix":"J1"}},"ancestry":[{"id":15244,"edition_id":1,"name":"Enterprise Zone Act","identifier":"22","label":"chapter","depth":2,"order_by":1,"parent_id":12809,"metadata":{},"date_created":"2026-06-26 03:53:15","date_modified":"2026-06-26 03:53:15","permalink":{"id":260313,"object_type":"structure","relational_id":15244,"identifier":"22","token":"59.1\/22","url":"\/59.1\/22\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12809,"edition_id":1,"name":"Trade and Commerce","identifier":"59.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:54","date_modified":"2026-06-26 03:43:54","permalink":{"id":259521,"object_type":"structure","relational_id":12809,"identifier":"59.1","token":"59.1","url":"\/59.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":80172,"structure_id":15244,"section_number":"59.1-270","catch_line":"Expired","url":"\/59.1-270\/","token":"59.1\/22\/59.1-270","metadata":false},{"id":61169,"structure_id":15244,"section_number":"59.1-272","catch_line":"Repealed","url":"\/59.1-272\/","token":"59.1\/22\/59.1-272","metadata":false},{"id":59601,"structure_id":15244,"section_number":"59.1-279","catch_line":"Eligibility","url":"\/59.1-279\/","token":"59.1\/22\/59.1-279","metadata":false},{"id":60023,"structure_id":15244,"section_number":"59.1-279.1","catch_line":"Repealed","url":"\/59.1-279.1\/","token":"59.1\/22\/59.1-279.1","metadata":false},{"id":73898,"structure_id":15244,"section_number":"59.1-280","catch_line":"Enterprise zone business tax credit","url":"\/59.1-280\/","token":"59.1\/22\/59.1-280","metadata":false},{"id":73671,"structure_id":15244,"section_number":"59.1-280.1","catch_line":"Enterprise zone real property investment tax credit","url":"\/59.1-280.1\/","token":"59.1\/22\/59.1-280.1","metadata":false},{"id":70752,"structure_id":15244,"section_number":"59.1-280.2","catch_line":"Repealed","url":"\/59.1-280.2\/","token":"59.1\/22\/59.1-280.2","metadata":false},{"id":70559,"structure_id":15244,"section_number":"59.1-281","catch_line":"Repealed","url":"\/59.1-281\/","token":"59.1\/22\/59.1-281","metadata":false},{"id":58020,"structure_id":15244,"section_number":"59.1-282","catch_line":"Repealed","url":"\/59.1-282\/","token":"59.1\/22\/59.1-282","metadata":false},{"id":62042,"structure_id":15244,"section_number":"59.1-282.1","catch_line":"Repealed","url":"\/59.1-282.1\/","token":"59.1\/22\/59.1-282.1","metadata":false},{"id":74599,"structure_id":15244,"section_number":"59.1-282.3","catch_line":"Repealed","url":"\/59.1-282.3\/","token":"59.1\/22\/59.1-282.3","metadata":false},{"id":79712,"structure_id":15244,"section_number":"59.1-284.01","catch_line":"Expiration of chapter; exceptions","url":"\/59.1-284.01\/","token":"59.1\/22\/59.1-284.01","metadata":false}],"previous_section":{"id":73898,"structure_id":15244,"section_number":"59.1-280","catch_line":"Enterprise zone business tax credit","url":"\/59.1-280\/","token":"59.1\/22\/59.1-280","metadata":false},"next_section":{"id":70752,"structure_id":15244,"section_number":"59.1-280.2","catch_line":"Repealed","url":"\/59.1-280.2\/","token":"59.1\/22\/59.1-280.2","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/59.1-280.1\/","history_text":"

This law was first created in 1995. The record of its establishment is cataloged in chapter 792<\/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 4 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 1997, chapters 517<\/a>, 634<\/a>, and 669<\/a>; in 1998, chapter 759<\/a>; in 2005, chapters 863<\/a> and 884<\/a>; in 2017, chapter 451<\/a>.<\/p>","references":[{"id":73898,"section_number":"59.1-280","catch_line":"Enterprise zone business tax credit","order_by":null,"url":"\/59.1-280\/"},{"id":79712,"section_number":"59.1-284.01","catch_line":"Expiration of chapter; exceptions","order_by":null,"url":"\/59.1-284.01\/"},{"id":70661,"section_number":"59.1-548","catch_line":"Enterprise zone real property investment grants","order_by":null,"url":"\/59.1-548\/"}],"refers_to":[{"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":62270,"section_number":"58.1-320","catch_line":"Imposition of tax","order_by":null,"url":"\/58.1-320\/"},{"id":60955,"section_number":"58.1-400","catch_line":"Imposition of tax","order_by":null,"url":"\/58.1-400\/"},{"id":73898,"section_number":"59.1-280","catch_line":"Enterprise zone business tax credit","order_by":null,"url":"\/59.1-280\/"}],"permalink":{"id":260335,"object_type":"law","relational_id":73671,"identifier":"59.1-280.1","token":"59.1\/22\/59.1-280.1","url":"\/59.1-280.1\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/59.1-280.1\/","token":"59.1\/22\/59.1-280.1","dublin_core":{"Title":"Enterprise zone real property investment tax credit","Type":"Text","Format":"text\/html","Identifier":"\u00a7 59.1-280.1","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> As used in this section:\n\t\t\t“Large qualified zone resident<\/span><\/span>” means a qualified zone resident<\/span> making qualified zone investments<\/span> in excess of $100 million when such qualified zone investments<\/span> result in the creation of at least 200 permanent full-time positions<\/span>.\n\t\t\t“Permanent full-time position<\/span>” means a job of an indefinite duration at a business firm located within an enterprise zone requiring the employee to report for work within the enterprise zone, and requiring either (i) a minimum of 35 hours of an employee’s time a week for the entire normal year<\/span> of the business firm’s operations, which “normal year<\/span>” must consist of at least 48 weeks, (ii) 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 business firm, or (iii) a minimum of 1,680 hours per year if the standard fringe benefits are paid by the business firm for the employee. Seasonal or temporary positions, or a position created when a job function is shifted from an existing location in the Commonwealth to a business firm located within an enterprise zone shall not qualify as permanent full-time positions<\/span>.\n\t\t\t“Qualified zone improvements<\/span>” means the amount expended for improvements to rehabilitate or expand depreciable real property placed in service during the taxable year within an enterprise zone, provided that the total amount of such improvements equals or exceeds (i) $50,000 and (ii) the assessed value of the original facility immediately prior to the rehabilitation or expansion. “Qualified zone expenditures<\/span>” includes any such expenditure regardless of whether it is considered properly chargeable to a capital account or deductible as a business expense under federal Treasury Regulations.\n\t\t\tQualified zone improvements<\/span> include expenditures associated with any exterior, structural, mechanical, or electrical improvements necessary to expand or rehabilitate a building for commercial or industrial use and excavations, grading, paving, driveways, roads, sidewalks, landscaping, or other land improvements. Qualified zone improvements<\/span> shall include, but not be limited to, costs associated with demolition, carpentry, sheetrock, plaster, painting, ceilings, fixtures, doors, windows, fire suppression systems, roofing and flashing, exterior repair, cleaning, and cleanup.\n\t\t\tQualified zone improvements<\/span> shall not include: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> The cost of acquiring any real property or building; however, the cost of any newly constructed depreciable nonresidential real property (excluding land, land improvements, paving, grading, driveways, and interest) shall be considered to be a qualified zone improvement eligible for the credit if the total amount of such expenditure is at least $250,000 with respect to a single facility. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> (i) The cost of furnishings; (ii) any expenditure associated with appraisal, architectural, engineering and interior design fees; (iii) loan fees, points, or capitalized interest; (iv) legal, accounting, realtor, sales and marketing, or other professional fees; (v) closing costs, permits, user fees, zoning fees, impact fees, and inspection fees; (vi) bids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities incurred during construction; (vii) utility hook-up or access fees; (viii) outbuildings; or (ix) the cost of any well or septic or sewer system. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The basis of any property: (i) for which a credit under this section was previously granted; (ii) which was previously placed in service in Virginia by the taxpayer, 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 (iii) which was previously in service in Virginia and has a basis in the hands of the person acquiring it, determined in whole or in part by reference to the basis of such property in the hands of the person from whom acquired or Internal Revenue Code § 1014 (a).\n\t\t\t\t“Qualified zone investments<\/span>” means the sum of qualified zone improvements<\/span> and the cost of machinery, tools and equipment used in manufacturing tangible personal property within an enterprise zone. For purposes of this section, machinery, tools and equipment shall only be deemed to include the cost of such property which is placed in service in the enterprise zone on or after July 1, 1995. Machinery, tools and equipment shall not include the basis of any property: (i) for which a credit under this section was previously granted; (ii) which was previously placed in service in Virginia by the taxpayer, 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 (iii) which was previously in service in Virginia and has a basis in the hands of the person acquiring it, determined in whole or part by reference to the basis of such property in the hands of the person from whom acquired, or Internal Revenue Code § 1014 (a).\n\t\t\t\t“Qualified zone resident<\/span>” means an owner or tenant of real property located in an enterprise zone who expands or rehabilitates such real property to facilitate the conduct of a trade or business within the enterprise zone.\n\t\t\t\t“Real property investment tax credit<\/span>” means a credit against the taxes imposed by Articles 2 (§ 58.1-320<\/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 of Title 58.1.\n\t\t\t\t“Small qualified zone resident<\/span><\/span>” means any qualified zone resident<\/span> other than a large qualified zone resident<\/span><\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> For all taxable years beginning on and after July 1, 1995, but before July 1, 2005, a qualified zone resident<\/span> shall be allowed a real property investment tax credit<\/span> as set forth in this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> For any small qualified zone resident<\/span><\/span>, a real property investment tax credit<\/span> shall be allowed in an amount equaling 30 percent of the qualified zone improvements<\/span>. Any tax credit granted pursuant to this subsection is refundable; however, in no event shall the cumulative credit allowed to a small qualified zone resident<\/span><\/span> pursuant to this subsection exceed $125,000 in any five-year period. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> For any large qualified zone resident<\/span><\/span>, a real property investment tax credit<\/span> shall be allowed in an amount of up to five percent of such qualified zone investments<\/span>. The percentage amount of the real property investment tax credit<\/span> granted to a large qualified zone resident<\/span><\/span> shall be determined by agreement between the Department and the large qualified zone resident<\/span><\/span>, provided such percentage amount shall not exceed five percent. The real property investment tax credit<\/span> provided by this subsection shall not exceed the tax imposed for such taxable year, but any credit not usable for the taxable year generated may be carried over until the full amount of such credit has been utilized. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The Department shall certify the nature and amount of qualified zone improvements<\/span> and qualified zone investments<\/span> eligible for a real property investment tax credit<\/span> in any taxable year. Only qualified zone improvements<\/span> and qualified zone investments<\/span> that have been properly certified shall be eligible for the credit. Any form filed with the Department of Taxation or State Corporation Commission for the purpose of claiming the credit shall be accompanied by a copy of the certification furnished to the taxpayer by the Department. Any certification by the Department pursuant to this section shall not impair the authority of the Department of Taxation or State Corporation Commission to deny in whole or in part any claimed tax credit if the Department of Taxation or State Corporation Commission determines that the taxpayer is not entitled to such tax credit. The Department of Taxation or State Corporation Commission shall notify the Department in writing upon determining that a taxpayer is ineligible for such tax credit. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> In the case of a partnership, limited liability company or S corporation, the term “qualified zone resident<\/span>” as used in this section means the partnership, limited liability company or S corporation. Credits granted to a partnership, limited liability company or S corporation shall be passed through to the partners, members or shareholders, respectively. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> The Tax Commissioner shall have the authority to issue<\/span> regulations relating to the computation and carryover of the credit provided under this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> In the first taxable year only, the credit provided in this section shall be prorated equally against the taxpayer’s estimated payments made in the third and fourth quarters and the final payment, if such taxpayer is required to make quarterly payments. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

I.<\/span> Tax credits awarded under this section and under § 59.1-280<\/a> shall not exceed $7.5 million annually until the end of fiscal year 2019. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

J.<\/span> The provisions of this section shall apply only as follows: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> To those large qualified zone residents<\/span><\/span> that have initiated use of enterprise zone tax credits pursuant to this section on or before July 1, 2005; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> To those large qualified zone residents<\/span><\/span> that have signed agreements with the Commonwealth regarding the use of enterprise zone tax credits in accordance with this section on or before July 1, 2005. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nENTERPRISE ZONE REAL PROPERTY INVESTMENT TAX CREDIT (\u00a7 59.1-280.1)\n\nA. As used in this section:\n\t\t\t“Large qualified zone resident” means a qualified zone resident\nmaking qualified zone investments in excess of $100 million when such qualified\nzone investments result in the creation of at least 200 permanent full-time\npositions.\n\t\t\t“Permanent full-time position” means a job of an indefinite\nduration at a business firm located within an enterprise zone requiring the\nemployee to report for work within the enterprise zone, and requiring either (i)\na minimum of 35 hours of an employee’s time a week for the entire normal\nyear of the business firm’s operations, which “normal year”\nmust consist of at least 48 weeks, (ii) a minimum of 35 hours of an\nemployee’s time a week for the portion of the taxable year in which the\nemployee was initially hired for, or transferred to, the business firm, or (iii)\na minimum of 1,680 hours per year if the standard fringe benefits are paid by\nthe business firm for the employee. Seasonal or temporary positions, or a\nposition created when a job function is shifted from an existing location in the\nCommonwealth to a business firm located within an enterprise zone shall not\nqualify as permanent full-time positions.\n\t\t\t“Qualified zone improvements” means the amount expended for\nimprovements to rehabilitate or expand depreciable real property placed in\nservice during the taxable year within an enterprise zone, provided that the\ntotal amount of such improvements equals or exceeds (i) $50,000 and (ii) the\nassessed value of the original facility immediately prior to the rehabilitation\nor expansion. “Qualified zone expenditures” includes any such\nexpenditure regardless of whether it is considered properly chargeable to a\ncapital account or deductible as a business expense under federal Treasury\nRegulations.\n\t\t\tQualified zone improvements include expenditures associated with any\nexterior, structural, mechanical, or electrical improvements necessary to expand\nor rehabilitate a building for commercial or industrial use and excavations,\ngrading, paving, driveways, roads, sidewalks, landscaping, or other land\nimprovements. Qualified zone improvements shall include, but not be limited to,\ncosts associated with demolition, carpentry, sheetrock, plaster, painting,\nceilings, fixtures, doors, windows, fire suppression systems, roofing and\nflashing, exterior repair, cleaning, and cleanup.\n\t\t\tQualified zone improvements shall not include:\n\n 1. The cost of acquiring any real property or building; however, the cost of\n any newly constructed depreciable nonresidential real property (excluding\n land, land improvements, paving, grading, driveways, and interest) shall be\n considered to be a qualified zone improvement eligible for the credit if the\n total amount of such expenditure is at least $250,000 with respect to a single\n facility.\n\n 2. (i) The cost of furnishings; (ii) any expenditure associated with\n appraisal, architectural, engineering and interior design fees; (iii) loan\n fees, points, or capitalized interest; (iv) legal, accounting, realtor, sales\n and marketing, or other professional fees; (v) closing costs, permits, user\n fees, zoning fees, impact fees, and inspection fees; (vi) bids, insurance,\n signage, utilities, bonding, copying, rent loss, or temporary facilities\n incurred during construction; (vii) utility hook-up or access fees; (viii)\n outbuildings; or (ix) the cost of any well or septic or sewer system.\n\n 3. The basis of any property: (i) for which a credit under this section was\n previously granted; (ii) which was previously placed in service in Virginia by\n the taxpayer, a related party as defined by Internal Revenue Code § 267\n (b), or a trade or business under common control as defined by Internal\n Revenue Code § 52 (b); or (iii) which was previously in service in\n Virginia and has a basis in the hands of the person acquiring it, determined\n in whole or in part by reference to the basis of such property in the hands of\n the person from whom acquired or Internal Revenue Code § 1014 (a).\n \t\t\t\t“Qualified zone investments” means the sum of qualified zone\n improvements and the cost of machinery, tools and equipment used in\n manufacturing tangible personal property within an enterprise zone. For\n purposes of this section, machinery, tools and equipment shall only be deemed\n to include the cost of such property which is placed in service in the\n enterprise zone on or after July 1, 1995. Machinery, tools and equipment shall\n not include the basis of any property: (i) for which a credit under this\n section was previously granted; (ii) which was previously placed in service in\n Virginia by 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\n Internal Revenue Code § 52 (b); or (iii) which was previously in service\n in Virginia and has a basis in the hands of the person acquiring it,\n determined in whole or part by reference to the basis of such property in the\n hands of the person from whom acquired, or Internal Revenue Code § 1014\n (a).\n \t\t\t\t“Qualified zone resident” means an owner or tenant of real\n property located in an enterprise zone who expands or rehabilitates such real\n property to facilitate the conduct of a trade or business within the\n enterprise zone.\n \t\t\t\t“Real property investment tax credit” means a credit against\n the taxes imposed by Articles 2 (§ 58.1-320 et seq.) and 10 (§\n 58.1-400 et seq.) of Chapter 3, Chapter 12 (§ 58.1-1200 et seq.), Article\n 1 (§ 58.1-2500 et seq.) of Chapter 25, or Article 2 (§ 58.1-2620 et\n seq.) of Chapter 26 of Title 58.1.\n \t\t\t\t“Small qualified zone resident” means any qualified zone\n resident other than a large qualified zone resident.\n\nB. For all taxable years beginning on and after July 1, 1995, but before July 1,\n2005, a qualified zone resident shall be allowed a real property investment tax\ncredit as set forth in this section.\n\nC. For any small qualified zone resident, a real property investment tax credit\nshall be allowed in an amount equaling 30 percent of the qualified zone\nimprovements. Any tax credit granted pursuant to this subsection is refundable;\nhowever, in no event shall the cumulative credit allowed to a small qualified\nzone resident pursuant to this subsection exceed $125,000 in any five-year\nperiod.\n\nD. For any large qualified zone resident, a real property investment tax credit\nshall be allowed in an amount of up to five percent of such qualified zone\ninvestments. The percentage amount of the real property investment tax credit\ngranted to a large qualified zone resident shall be determined by agreement\nbetween the Department and the large qualified zone resident, provided such\npercentage amount shall not exceed five percent. The real property investment\ntax credit provided by this subsection shall not exceed the tax imposed for such\ntaxable year, but any credit not usable for the taxable year generated may be\ncarried over until the full amount of such credit has been utilized.\n\nE. The Department shall certify the nature and amount of qualified zone\nimprovements and qualified zone investments eligible for a real property\ninvestment tax credit in any taxable year. Only qualified zone improvements and\nqualified zone investments that have been properly certified shall be eligible\nfor the credit. Any form filed with the Department of Taxation or State\nCorporation Commission for the purpose of claiming the credit shall be\naccompanied by a copy of the certification furnished to the taxpayer by the\nDepartment. Any certification by the Department pursuant to this section shall\nnot impair the authority of the Department of Taxation or State Corporation\nCommission to deny in whole or in part any claimed tax credit if the Department\nof Taxation or State Corporation Commission determines that the taxpayer is not\nentitled to such tax credit. The Department of Taxation or State Corporation\nCommission shall notify the Department in writing upon determining that a\ntaxpayer is ineligible for such tax credit.\n\nF. In the case of a partnership, limited liability company or S corporation, the\nterm “qualified zone resident” as used in this section means the\npartnership, limited liability company or S corporation. Credits granted to a\npartnership, limited liability company or S corporation shall be passed through\nto the partners, members or shareholders, respectively.\n\nG. The Tax Commissioner shall have the authority to issue regulations relating\nto the computation and carryover of the credit provided under this section.\n\nH. In the first taxable year only, the credit provided in this section shall be\nprorated equally against the taxpayer’s estimated payments made in the\nthird and fourth quarters and the final payment, if such taxpayer is required to\nmake quarterly payments.\n\nI. Tax credits awarded under this section and under § 59.1-280 shall not\nexceed $7.5 million annually until the end of fiscal year 2019.\n\nJ. The provisions of this section shall apply only as follows:\n\n 1. To those large qualified zone residents that have initiated use of\n enterprise zone tax credits pursuant to this section on or before July 1,\n 2005;\n\n 2. To those large qualified zone residents that have signed agreements with\n the Commonwealth regarding the use of enterprise zone tax credits in\n accordance with this section on or before July 1, 2005.\n\nHISTORY: 1995, c. 792; 1997, cc. 517, 634, 669; 1998, c. 759; 2005, cc. 863,\n884; 2017, c. 451.","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}}