                                 CODE OF VIRGINIA

TELEWORK EXPENSES TAX CREDIT (§ 58.1-439.12:07)

A. As used in this section, unless the context requires a different meaning:
			&#8220;Eligible telework expenses&#8221; means expenses incurred during the
taxable year pursuant to a telework agreement, in an amount up to $1,200 for
each participating employee, that enable a participating employee to begin to
telework, which expenses are not otherwise the subject of a deduction from
income claimed by the employer in any tax year. Such expenses include, but are
not limited to, expenses paid or incurred to purchase computers,
computer-related hardware and software, modems, data processing equipment,
telecommunications equipment, high-speed Internet connectivity equipment,
computer security software and devices, and all related delivery, installation,
and maintenance fees. Such expenses do not include replacement costs for
computers, computer-related hardware and software, modems, data processing
equipment, telecommunications equipment, or computer security software and
devices at the principal place of business when that equipment is relocated to
the telework site. Eligible telework expenses may also include up to a maximum
of $20,000 for conducting a telework assessment on or after January 1, 2012.
Such costs shall be ineligible for this credit if they are otherwise taken as a
deduction by the employer from income in any taxable year. The costs included
and allowed to be taken as a credit include program planning costs, which may
include direct program development and training costs, raw labor costs, and
professional consulting fees. Such costs shall not include those for which a
credit is claimed under any other provision of this chapter. The credit for
conducting a telework assessment shall be allowed once for each employer meeting
the requirements herein.
			&#8220;Employer&#8221; means any employer subject to the income tax imposed
by this chapter.
			&#8220;Participating employee&#8221; means an employee who has entered into a
telework agreement with his employer on or after July 1, 2012, in accordance
with policies set by the Virginia Department of Rail and Public Transportation.
The term shall not include an individual who is self-employed or an individual
who ordinarily spends a majority of the workday at a location other than the
place where his duties are normally performed.
			&#8220;Telework&#8221; means the performance of normal and regular work
functions on a workday at a location different from the place where work
functions are normally performed and that is within or closer to the
participating employee&#8217;s residence. The term shall not include home-based
businesses, extensions of the workday, or work performed on a weekend or
holiday.
			&#8220;Telework agreement&#8221; means an agreement signed by the employer
and the participating employee, on or after July 1, 2012, but before January 1,
2019, that defines the terms of a telework arrangement, including the number of
days per month the participating employee will telework in order to qualify for
the credit, and any restrictions on the location from which the employee will
telework.
			&#8220;Telework assessment&#8221; means an optional assessment leading to the
development of policies and procedures necessary to implement a formal telework
program that would qualify the employer for the credit provided in this section,
including but not limited to a workforce profile; a telework program business
case and plan; a detailed accounting of the purpose, goals, and operating
procedures of the telework program; methodologies for measuring telework program
activities and success; and a deployment schedule for increasing telework
activity.

B. For taxable years beginning on or after January 1, 2012, but before January
1, 2019, an employer shall be allowed a credit against the taxes imposed
pursuant to Articles 2 (&#xA7; 58.1-320 et seq.) and 10 (&#xA7; 58.1-400 et
seq.) for eligible telework expenses incurred during the calendar year that ends
during the taxable year. The amount of the credit shall not exceed $50,000 per
employer for each calendar year.
			Such expenses may be incurred (i) only once per participating employee and
(ii) directly by the employer on behalf of the participating employee or
directly by the participating employee and reimbursed by the employer.

C. 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.

D. The amount of tax credits available to any employer under this section in any
taxable year shall not exceed the employer&#8217;s tax liability. No unused tax
credit shall be carried forward or carried back against the employer&#8217;s tax
liability. An employer shall be ineligible for a tax credit pursuant to this
section if such employer claims a credit based on the jobs, wages, or other
expenses for the same employee under any other provision of this chapter.

E. An employer seeking to claim a tax credit provided herein shall submit a
reservation application to the Tax Commissioner for tentative approval of the
credit between September 1 and October 31 of the year preceding the calendar
year in which the eligible telework expenses will be incurred. The Tax
Commissioner shall establish policies and procedures for the reservation of tax
credits by eligible employers. 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 employers; and
(iii) a procedure for the cancellation and reallocation of tax credit
reservations allocated to eligible employers that, after reserving tax credits,
have been determined to be ineligible for all or a portion of the tax credits
reserved. Such application shall certify that the employer would not have
incurred the eligible telework expenses for which the credit is sought but for
the availability of such credit. The Tax Commissioner shall provide tentative
approval of the applications no later than December 31 of the year in which the
applications are received. When the application and amount of tax credits have
been approved and the employer applicant notified, such employer may make
purchases approved for the tax credits during the immediately following taxable
year or lose the right to such credits.

F. In no event shall the aggregate amount of tax credits approved by the Tax
Commissioner exceed $1 million annually. In the event the credit amounts on the
applications filed with the Tax Commissioner exceed the maximum aggregate amount
of tax credits, then the tax credits shall be allocated on a pro rata basis
based on the amounts allowed by subsection B among the eligible employers who
filed timely applications.

G. Actions of the Tax Commissioner relating to the approval or denial of
applications for reservations of tax credits pursuant to this section shall be
exempt from the provisions of the Administrative Process Act (&#xA7; 2.2-4000 et
seq.).

HISTORY: 2011, cc. 409, 417; 2012, cc. 327, 341; 2017, cc. 177, 454; 2019, c.
21.