                                 CODE OF VIRGINIA

AGRICULTURAL BEST MANAGEMENT PRACTICES TAX CREDIT (§ 58.1-439.5)

A. 1. As used in this section, &#8220;agricultural best management
practice&#8221; means a practice approved by the Virginia Soil and Water
Conservation Board that will provide a significant improvement to water quality
in the state&#8217;s streams and rivers and the Chesapeake Bay and is consistent
with other state and federal programs that address agricultural, nonpoint source
pollution management.
			A detailed list of the standards and criteria for agricultural best
management practices eligible for credit shall be found in the most recently
approved &#8220;Virginia Agricultural BMP Implementation Manual&#8221; published
by the Department of Conservation and Recreation.

   2. For all taxable years beginning on and after January 1, 1998, but before
   January 1, 2030, any corporation engaged in agricultural production for market
   that has in place a soil conservation plan approved by the local Soil and
   Water Conservation District (SWCD) shall be allowed a refundable credit
   against the tax imposed by &#xA7; 58.1-400 of an amount equaling 25 percent of
   the first $100,000 expended for agricultural best management practices by the
   corporation.

   3. For all taxable years beginning on and after January 1, 2021, but before
   January 1, 2030, any corporation that is engaged in agricultural production
   for market, or that has equines that create needs for agricultural best
   management practices to reduce nonpoint source pollutants, and has in place a
   resource management plan approved by the local SWCD, shall be allowed a
   refundable credit against the tax imposed by &#xA7; 58.1-400 in an amount
   equaling 50 percent of the first $100,000 expended for agricultural best
   management practices implemented by the corporation on the acreage included in
   the resource management plan.

B. 1. Any eligible practice approved by the local Soil and Water Conservation
District Board shall be completed within the taxable year in which the credit is
claimed. After the practice installation has been completed, the local SWCD
Board shall certify the practice as approved and completed, and eligible for
credit. The applicant shall forward the certification to the Department of
Taxation on forms provided by the Department. The credit shall be allowed only
for expenditures made by the taxpayer from funds of his own sources.

   2. To the extent that a taxpayer participates in the Virginia Agricultural
   Best Management Practices Cost-Share Program, the taxpayer may claim the
   credit under subdivision A 2 for any remaining liability after such
   cost-share, but may not claim the credit under subdivision A 3 for any such
   remaining liability, subject to the other provisions of this section. For
   purposes of this subdivision, &#8220;liability after such cost-share&#8221;
   means the limitation of the tax credits to the total costs incurred by the
   taxpayer for agricultural best management practices reduced by any funding
   received by participation in the Virginia Agricultural Best Management
   Practices Cost-Share Program.

C. 1. The aggregate amount of such credit claimed under subdivisions A 2 and 3
shall not exceed $75,000 or the total amount of the tax imposed by this chapter,
whichever is less, in the year the project was completed, as certified by the
Board. Any taxpayer claiming a tax credit under this section shall not claim a
credit under any similar Virginia law for costs related to the same eligible
practices. A taxpayer may not claim credit for the same practice in the same
management area under both subdivisions A 2 and A 3.

   2. If the amount of the credit exceeds the taxpayer&#8217;s liability for such
   taxable year, the excess shall be refunded by the Tax Commissioner. Tax
   credits shall be refunded by the Tax Commissioner on behalf of the
   Commonwealth for 100 percent of face value. Tax credits shall be refunded
   within 90 days after the filing date of the income tax return on which the
   taxpayer applies for the refund.

D. For purposes of this section, the amount of any credit attributable to
agricultural best management practices by a partnership or electing small
business corporation (S Corporation) shall be allocated to the individual
partners or shareholders in proportion to their ownership or interest in the
partnership or S Corporation.

HISTORY: 1996, c. 629; 2018, c. 556; 2021, Sp. Sess. I, cc. 39, 40; 2024, cc.
212, 233.