                                 CODE OF VIRGINIA

WORKER TRAINING TAX CREDIT (§ 58.1-439.6:1)

A. As used in this section, unless the context requires a different meaning:
			&#8220;Eligible worker training&#8221; means the training of a qualified
employee or non-highly compensated worker in the form of (i) credit or noncredit
courses at any institution recognized on the Eligible Training Provider List or
at any Virginia public institution of higher education, as such term is defined
in &#xA7; 23.1-100, or as described in &#xA7;&#xA7; 23.1-3111, 23.1-3115,
23.1-3120, and 23.1-3125, that results in the qualified employee or non-highly
compensated worker receiving a workforce credential or (ii) instruction or
training that is part of an apprenticeship agreement approved by the
Commissioner of Labor and Industry.
			&#8220;Industry-recognized&#8221; means demonstrating competency or
proficiency in the technical and occupational skills identified as necessary for
performing functions of an occupation based on standards developed or endorsed
by employers or industry organizations.
			&#8220;Manufacturing&#8221; means processing, manufacturing, refining,
mining, or converting products for sale or resale.
			&#8220;Non-highly compensated worker&#8221; means a worker whose income is
less than Virginia&#8217;s median wage, as reported by the Virginia Employment
Commission, in the taxable year prior to applying for the credit.
&#8220;Non-highly compensated worker&#8221; does not include an owner or
relative.
			&#8220;Owner&#8221; means an individual who owns, directly or indirectly,
more than a five percent interest in the business claiming the credit.
			&#8220;Qualified employee&#8221; means an employee of a business eligible for
a credit under this section in a full-time position requiring a minimum of 1,680
hours in the entire normal year of the business&#8217; operations if the
standard fringe benefits are paid by the business for the employee. Employees in
seasonal or temporary positions shall not qualify as qualified employees.
&#8220;Qualified employee&#8221; does not include an owner or relative.
			&#8220;Relative&#8221; means a spouse, child, grandchild, parent, or sibling
of an owner.
			&#8220;Workforce credential&#8221; means an industry-recognized (i)
certification, (ii) certificate, or (iii) degree.

B. 1. For taxable years beginning on and after January 1, 2019, but prior to
July 1, 2025, a business shall be allowed a credit against the taxes imposed by
Articles 2 (§ 58.1-320 et seq.), 6 (§ 58.1-360 et seq.), and 10 (§ 58.1-400
et seq.) of Chapter 3; Chapter 12 (§ 58.1-1200 et seq.); Article 1 (§
58.1-2500 et seq.) of Chapter 25; or Article 2 (§ 58.1-2620 et seq.) of Chapter
26 in an amount equal to 35 percent of expenses incurred by the business during
the taxable year for eligible worker training. If the recipient of the training
is a qualified employee, the credit shall not exceed $500 per qualified employee
annually. If the recipient of the training is a non-highly compensated worker,
the credit shall not exceed $1,000 per non-highly compensated worker annually.

   2. For taxable years beginning on and after January 1, 2019, but prior to
   January 1, 2025, a business primarily engaged in manufacturing shall be
   allowed a credit against the taxes imposed by Articles 2 (&#xA7; 58.1-320 et
   seq.) and 10 (&#xA7; 58.1-400 et seq.) in an amount equal to 35 percent of its
   direct costs incurred during the taxable year in conducting orientation,
   instruction, and training in the Commonwealth relating to the manufacturing
   activities undertaken by the business. In no event shall the credit allowed to
   a business under this subdivision exceed $2,000 for any taxable year. The
   Department shall allow credit only for programs that (i) provide orientation,
   instruction, and training solely to students in grades six through 12; (ii)
   are coordinated with the local school division; and (iii) are conducted either
   at a plant or facility owned, leased, rented, or otherwise used by the
   business or at a public middle or high school in the Commonwealth. The
   taxpayer shall include in its direct costs only the following expenditures:
   (a) salaries or wages paid to instructors and trainers, prorated for the
   period of instruction or training; (b) costs for orientation, instruction, and
   training materials; (c) amounts paid for machinery and equipment used
   primarily for such instruction and training; and (d) the cost of leased or
   rented space used primarily for conducting the program.

   3. The total amount of tax credits granted under this section for each fiscal
   year shall not exceed $1 million.

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. 1. A business shall be allowed a credit pursuant to subdivision B 1 only for
those programs and providers that have been approved for inclusion in the
Commonwealth&#8217;s Eligible Training Provider List. The Workforce Innovation
Opportunity Act Title 1 Administrator shall provide the Tax Commissioner with
the approved list annually.

   2. A business shall be allowed the credit pursuant to subdivision B 2 only for
   an orientation, instruction, and training program that has been approved by
   the local school division and certified as eligible by the Department of
   Education. A business seeking a tax credit under subdivision B 2 shall include
   in its application reviewed by the Department of Education an approval from
   the local school division. The Department of Education shall review requests
   for certification submitted by businesses and shall advise the Tax
   Commissioner whether an orientation, instruction, and training program
   qualifies as relating to the manufacturing activities undertaken by the
   business and meets other applicable requirements.

   3. The Tax Commissioner shall develop guidelines (i) establishing procedures
   for claiming the credit provided by this section and (ii) providing for the
   allocation of credits among businesses requesting credits in the event that
   the amount of credits for which requests are made exceeds the available amount
   of credits in any year. Such guidelines shall be exempt from the provisions of
   the Administrative Process Act (&#xA7; 2.2-4000 et seq.).

E. Any credit not usable for the taxable year may be carried over for the next
three taxable years. The amount of credit allowed pursuant to this section shall
not exceed the tax imposed for such taxable year. No credit shall be carried
back to a preceding taxable year. If a business that is subject to the tax
limitation imposed pursuant to this subsection is allowed another credit
pursuant to any other section of this Code, or has a credit carryover from a
preceding taxable year, such business shall be considered to have first utilized
any credit allowed that does not have a carryover provision, and then any credit
which is carried forward from a preceding taxable year, prior to the utilization
of any credit allowed pursuant to this section.

F. No business shall be eligible to claim a credit under this section for
eligible worker training or manufacturing orientation, instruction, and training
undertaken by any program operated, administered, or paid for by the
Commonwealth.

G. The Tax Commissioner shall report annually to the Chairmen of the House
Committee on Finance and the Senate Committee on Finance and Appropriations on
the status and implementation of the credit established by this section.

HISTORY: 2019, c. 189; 2022, c. 431.