                                 CODE OF VIRGINIA

CREDIT FOR CIGARETTES MANUFACTURED AND EXPORTED (§ 58.1-439.12:01)

A. For purposes of this section:
			&#8220;Base year export volume&#8221; means the number of cigarettes
manufactured by a corporation, which cigarettes were also exported by such
manufacturer during its taxable year beginning in calendar year 2004.
			&#8220;Cigarette or cigarettes&#8221; means the same as that term is defined
in &#xA7; 58.1-1031.
			&#8220;Current year export volume&#8221; means the number of cigarettes
manufactured by a corporation, which cigarettes were also exported by such
manufacturer in the taxable year for which credit under this section is claimed.
The term shall only apply for taxable years beginning on and after January 1,
2006.
			&#8220;Exported&#8221; or &#8220;exports&#8221; means the shipment of
cigarettes to a foreign country.
			&#8220;Manufactured&#8221; or &#8220;manufactures&#8221; means manufactured
in Virginia.

B. For taxable years beginning on and after January 1, 2006, but before January
1, 2016, any corporation that manufactures cigarettes in Virginia, which
cigarettes are exported by such manufacturer, shall be allowed a credit against
the tax imposed by § 58.1-400 for such exported cigarettes as follows:

   1. If the current year export volume of the corporation is less than 50
   percent of the base year export volume for the corporation, no credit shall be
   allowed for the taxable year.

   2. If the current year export volume of the corporation is at least 50 percent
   but less than 60 percent of the base year export volume for the corporation,
   the credit allowed shall equal $0.20 per 1,000 cigarettes of the current year
   export volume.

   3. If the current year export volume of the corporation is at least 60 percent
   but less than 80 percent of the base year export volume for the corporation,
   the credit allowed shall equal $0.25 per 1,000 cigarettes of the current year
   export volume.

   4. If the current year export volume of the corporation is at least 80 percent
   but less than 100 percent of the base year export volume for the corporation,
   the credit allowed shall equal $0.30 per 1,000 cigarettes of the current year
   export volume.

   5. If the current year export volume of the corporation is at least 100
   percent but less than 120 percent of the base year export volume for the
   corporation, the credit allowed shall equal $0.35 per 1,000 cigarettes of the
   current year export volume.

   6. If the current year export volume of the corporation is at least 120
   percent of the base year export volume for the corporation, the credit allowed
   shall equal $0.40 per 1,000 cigarettes of the current year export volume.

C. In no event shall the credit allowed under this section for any taxable year
to any corporation exceed the lesser of $6 million or 50 percent of the
corporation&#8217;s income tax liability to the Commonwealth for such taxable
year.

D. The total amount of tax credits granted under this section for each fiscal
year of the Commonwealth shall not exceed $6 million. A corporation meeting the
requirements of this section shall be eligible to receive a tax credit to the
extent the corporation reserves such tax credit through the Department as
provided herein.
			The Department shall establish policies and procedures for the reservation of
tax credits by eligible corporations. Such policies and procedures shall provide
(i) requirements for applying for reservations of tax credits; (ii) a system for
allocating the available amount of tax credits among eligible corporations;
(iii) a method for the issuance of reservations to eligible corporations that
did not initially receive a reservation in any year, if the Department
determines that tax credit reservations were issued to other corporations that
did not use, or were determined to be wholly or partially ineligible for, a
reserved tax credit; and (iv) a procedure for the cancellation and reallocation
of tax credit reservations allocated to eligible corporations that, after
reserving tax credits, have been determined to be ineligible for all or a
portion of the tax credits reserved. In no case shall a corporation be allowed
to carry over any tax credit to be applied against any income tax for taxable
years subsequent to the taxable year of export.
			Actions of the Department relating to the approval or denial of applications
for reservations for tax credits pursuant to this section shall be exempt from
the provisions of the Administrative Process Act pursuant (&#xA7; 2.2-4000 et
seq.).

E. A corporation claiming the credit under this section for a taxable year shall
submit with its application for reservation of tax credits and its state income
tax return a written statement certifying its base year export volume and
current year export volume. It shall also submit with such application and
return a listing of its export volumes as reported on its monthly reports to the
Bureau of Alcohol, Tobacco and Firearms of the United States Department of the
Treasury for each month of the taxable year and a listing for each month of the
taxable year of its export volumes.

HISTORY: 2004, Sp. Sess. I, c. 4; 2005, c. 951; 2006, Sp. Sess. I, c. 2.