                                 CODE OF VIRGINIA

DAY-CARE FACILITY INVESTMENT TAX CREDIT (§ 58.1-439.4)

A. For taxable years beginning on and after January 1, 1997, any taxpayer shall
be allowed a credit against the taxes imposed by &#xA7; 58.1-320 or 58.1-400 in
an amount equal to 25 percent of all expenditures paid or incurred by such
taxpayer in such taxable year for planning, site preparation, construction,
renovation, or acquisition of facilities for the purpose of establishing a child
day-care facility to be used primarily by the children of such taxpayer&#8217;s
employees, and equipment installed for permanent use within or immediately
adjacent to such facility, including kitchen appliances, to the extent that such
equipment or appliances are necessary in the use of such facility for purposes
of child day-care; however, the amount of credit allowed to any taxpayer under
this section shall not exceed $25,000. If two or more taxpayers share in the
cost of establishing the child day-care facility for the children of their
employees, each such taxpayer shall be allowed such credit in relation to the
respective share paid or incurred by such taxpayer, of the total expenditures
for the facility in such taxable year.

B. The credits provided under this section shall be allowed only if (i) the
child day-care facility shall be operated under the authority of a license
issued by the Superintendent of Public Instruction pursuant to &#xA7;
22.1-289.011, (ii) an application for a building permit for the facility is made
after July 1, 1996, and (iii) the Tax Commissioner approves a taxpayer&#8217;s
application for a credit. Proper applications submitted to the Department for
the credit shall be approved in the order received. For each application
approved for credit it shall be assumed that the amount of the credit will be
$25,000, and the amount of the credit will be taken in the fiscal year in which
the application is approved and the following two fiscal years. Approval of
applications shall be limited to those that are assumed to result in no more
than $100,000 of credits in any fiscal year based on the assumptions set forth
in this subsection.

C. Any tax credit not usable for the taxable year may be carried over to the
extent usable for the next three taxable years; however, the balance of a credit
shall not be claimed for any succeeding taxable year in which the child day-care
facility is operated for purposes of child day-care for less than six months.

D. 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.

HISTORY: 1996, c. 497; 2020, cc. 860, 861.