                                 CODE OF VIRGINIA

REFORESTATION AND AFFORESTATION TAX CREDIT (§ 58.1-339.13)

A. For the purposes of this section, &#8220;eligible expenditures&#8221; means
direct expenses incurred by a taxpayer related to implementing beneficial
hardwood management practices pursuant to best practices developed by the
Department of Forestry.

B. In order to encourage the planting and sustainable growth of hardwood trees,
which take longer to reach maturity and thus take a longer time for a taxpayer
to recoup investment expenses, for taxable years beginning on and after January
1, 2022, but before January 1, 2025, a taxpayer shall be allowed a nonrefundable
credit against the tax levied pursuant to &#xA7; 58.1-320 for eligible
expenditures. The credit shall equal the lesser of the eligible expenditures
incurred by the taxpayer or $1,000.

C. The total amount of tax credits available under this section for a taxable
year shall not exceed $1 million. Approved applications for such credits shall
be administered and credits shall be allocated by the Department of Forestry on
a first-come, first-served basis. In order to claim the credit, the taxpayer
shall submit a forest management plan to the Department of Forestry for review.
After approval of the plan, and completion of the implementation of the plan,
the Department of Forestry shall certify the forest management plan contains
beneficial management practices as eligible for the credit. The taxpayer shall
forward the certification to the Department on forms provided by the Department.
Approval and implementation of a forest management plan shall be completed the
same year in which the credit is claimed.

D. The amount of the credit that may be claimed in any single taxable year shall
not exceed the taxpayer&#8217;s liability for taxes imposed by this chapter for
that taxable year. If the amount of the credit allowed under this section
exceeds the taxpayer&#8217;s tax liability for the taxable year in which the
eligible expenditures occurred, the amount that exceeds the tax liability may be
carried over for credit against the income taxes of the taxpayer in the next
five taxable years or until the total amount of the tax credit has been taken,
whichever is sooner.

E. To the extent that a taxpayer participates in the Hardwood Habitat Incentive
Program, the taxpayer may claim the credit under this section for any remaining
liability after such cost-share.

F. The Tax Commissioner, in coordination with the State Forester, shall develop
guidelines for claiming the credit provided by this section. Such guidelines
shall be exempt from the provisions of the Administrative Process Act (&#xA7;
2.2-4000 et seq.).

HISTORY: 2022, Sp. Sess. I, c. 18.