CORPORATE INCOME TAX
The Corporate Income Tax in Virginia is 6%. Virginia provides credits against the state corporate income tax known as the Major Business Facility Job Tax Credit. Qualifying companies locating or expanding in Virginia receive a $1,000 corporate income tax credit for each new full-time job created over a threshold number of jobs. Components of the job tax credit include the following:

(1) companies locating in Enterprise Zones or economically distressed area are required to meet a 50 job threshold; all other jurisdictions have a 100 job threshold;

(2) the $1,000 credit is available for each job in excess of the threshold and is taken in equal installments over three years (i.e., $333 per year);

(3) credits are available for taxable years beginning on and after 1/1/95, but before 1/1/05; and

(4) unused credits may be carried over 10 years.

SALES TAX
In Virginia, state sales and use taxes are 3 1/2 percent. Local sales tax is 1 percent. Counties and towns are separate taxing entities. Virginia’s combined state and local sales and use tax rate of 4.5% is among the lowest in the nation.

EXEMPTIONS
Some important exemptions include: manufacturers’ purchases used directly in production, including machinery, tools, spare parts, industrial fuels, and raw materials, items purchased for resale by distributors, certified pollution control equipment and facilities, custom computer software, and items used in research and development.

PROPERTY TAXES
State Property Tax: None

LOCAL PROPERTY TAX

Greater Charlottesville Region 2007 Real EstateTaxes

INVENTORY TAX

There is no inventory tax in the state of Virginia, however, the machinery and tool tax is as follows:

Machinery & Tools Tax

The automobile and truck tax is as follows:

Automobiles and Trucks Tax

UTILITY PURCHASES

Tax on telephone bills is limited to local service. Portions of electric bills are also exempt in some localities. Utility purchase taxes are as follows:

Utility Purchase Taxes

FRANCHISE TAX ( IN $ PER 1,000)

There are no state or local franchise taxes; however, an annual franchise registration fee is assessed at a maximum of $850.

STATE OF VIRGINIA INCENTIVES

TRAINING PROGRAMS

Since 1965, Workforce Services has been a unique program which offers consulting services and training assistance for new and expanding industries throughout the Commonwealth of Virginia. Any company that creates twenty-five or more new jobs or makes a capital investment of at least $1,000,000 within a one-year period is eligible to be assisted with consulting services, video production services and funding. Working closely with company management, Workforce Services offers training analysis, recruitment and pre-employment assessment, extensive educational resources, "train-the-trainer" services, on-the-job training and productivity/continuous improvement programs. Funding for each program will be based on estimated tax benefits generated within a one-year period to the Commonwealth of Virginia for each new job created and filled and the cost estimate developed during the program's design. Companies will be reimbursed three months after the new employee's hire date. The company will certify the employee and wage levels at this time by completing a report form. All services are available for full-time wage and non-exempt positions working 30 or more hours with benefits.

To apply for assistance through the Workforce Services Program, a meeting with company management to begin planning for recruitment and training needs is suggested. Any additional information concerning the Workforce Services Program, a meeting with company management to begin planning for recruitment and training needs is suggested. Any additional information concerning Workforce Services may be obtained by contacting:

Workforce Services Program
Virginia Economic Development Partnership
P.O. Box 798
Richmond, VA 23218-0798
(804) 371-8120
FAX: (804) 371-8137

The Loan Guaranty Program is designed to reduce the risk to banks in making loans and, thereby, increase the availability of short-term capital for small businesses. The Financing Authority will guarantee up to $250,000 or 50% of a bank loan, whichever is less. Typical borrowings include revolving lines of credit to finance accounts receivable and inventory, and short-term loans for permanent working capital and fixed-asset purchases, such as office or research equipment.

The Governor's Opportunity fund supports industrial development projects that create new jobs and investment in accordance with criteria established by state legislation. Funds can be used for such things as site acquisition and development; transportation access; training; construction or build-out of publicly owned buildings; or grants or loans to Industrial Development Authorities. The fund is not a routine financing mechanism and should only be considered when necessary to close a deal. Grant requests are made by the locality for a project under the following conditions: (1) projects must meet investment and job creation minimums to be eligible; (2) matching local financial participation is required on a dollar-for-dollar basis; and (3) grants are made at the discretion of the Governor. For more information, please contact:

Virginia Economic Development Partnership
P.O. Box 798
Richmond, Virginia 23218-0798
1 (804) 371-8108

CAPITAL EQUIPMENT FINANCING
Tax-exempt Industrial Development Bonds (IDBs) are issued through local industrial development authorities such as the IDAs and the Virginia Small Business Financing Authority to finance new or expanding manufacturing facilities and exempt projects such as solid waste disposal facilities. Through IDBs, creditworthy businesses are able to obtain long-term financing at favorable interest rates for up to 100% of the costs of acquiring, constructing, and equipping a facility, including site preparation.

The Financing Authority issues both tax-exempt and taxable bonds to provide businesses with access to long-term, fixed asset financing at favorable interest rates and terms. Staff are available to assist companies through the bond financing process, including locating a bank or other financial institution to underwrite the project. In addition, the Financing Authority offers an Umbrella ID Program which provides a cost-efficient means for companies to sell their bonds in the public bond market, particularly for smaller projects with limited access to the market.

All projects financed with IDBs must meet federal tax code requirements for eligibility. The maximum project size for manufacturing facilities is $10 million; exempt projects are not subject to this limitation. For more information, please contact:

Virginia Small Business Financing Authority
P.O. Box 798
Richmond, Virginia 23218-0798
1 (804) 371-8254

OTHER INCENTIVES

In addition to the wide range of incentives offered through legislatively established programs for a variety of different projects, some communities may choose to participate in specific job-creating investments that help fulfill local objectives. These incentives will vary from community to community and may involve site improvements, infrastructure, education and training or other activities that the public sector may choose to fund. Furthermore, there may be other incentives that are offered by banks, developers and others in the private sector that help structure a competitive package for a prospective company. The nature, timing and location of each project will largely determine the extent, if any, of strictly "local" initiatives.

LOCAL TAX ABATEMENTS
Virginia does not tax intangible property, manufacturers' inventory, manufacturers' furniture, fixtures, or corporate aircraft. Localities have the option of exempting or partially exempting certified pollution control facilities and equipment certified recycling equipment, certified solar energy devices, rehabilitated commercial and industrial real estate for up to 15 years. In addition, localities may elect to tax certain tangible person property at reduced rates including research and development, motor carriers, data processing computer hardware and certain aircraft. For more information on Virginia business taxes, contact:

The Virginia Economic Development Partnership
P.O. Box 798
Richmond, Virginia 23218-0798