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Virginia incentives that benefit business owners

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The best incentive that Virginia offers is its pro-business economic climate. By offering sound fiscal management, conservative business regulations and a growing and diverse economy, Virginia has positioned itself to be an excellent place to do business.

To support a pro-business environment, Virginia offers many incentives to assist business growth and encourage startups. These incentives include financial assistance, facilities development grants, tax credits and exemptions. In addition to financial incentives, Virginia also offers work-force training and technical support programs. The following list includes a few of the more popular incentives.  For more information, go to the Virginia Economic Development Partnership website http://www.yesvirginia.org/pdf/guides/BusinessIncentives10-11.pdf. 

Corporate income tax incentives
The Virginia corporate income tax rate is a flat 6 percent. However, the sales factor in the state’s income apportionment formula is double weighted, benefiting companies with high payrolls and property in Virginia.

Sales and use tax exemptions
Virginia has one of the lowest sales tax rates in the country — 5 percent (4 percent state, 1 percent local). There are some exemptions, such as items purchased for resale or used in manufacturing, pollution control devices, purchases used in research and development, and charges for utilities and Internet access.
Contact:
Virginia Department of Taxation
P.O. Box 1115
Richmond, Virginia 23218
(804) 367-8037
http://www.tax.virginia.gov

Property tax incentives
Virginia does not tax property at the state level. Real estate and tangible personal property are taxed at the local level. A company will pay either county or city taxes depending on its location. There is a long list of items that Virginia does not tax, including: manufacturers’ inventory, intangible property and furniture/fixtures.

Virginia Jobs Investment Program
The Virginia Department of Business Assistance’s Jobs Investment Program provides an economic development incentive for business relocation and expansion projects — working with Virginia businesses to provide customized recruiting and training programs. Small businesses may also qualify for training and retraining programs. Visit http://www.dba.virginia.gov/vjip.shtml The S.mall Business New Jobs Grant Fund provides grants ranging from $500 to $2,000 to small businesses creating at least five new jobs within a 12-month period.
Contact:
Virginia Department of Business Assistance
1220 Bank Street, 3rd Floor South
Richmond, VA 23219
(804) 371-8120
http://www.vdba.virginia.gov
 
Worker Retraining Tax Credit
Employers can receive tax credits for 30 percent of expenditures on worker retraining programs for qualified employees. The credit is capped at $2.5 million in a taxable year. Eligible programs include courses at Virginia community colleges certified by the Virginia Department of Business Assistance, or apprenticeship agreements certified by the Virginia Apprenticeship Council.
Contact:
Virginia Department of Business Assistance
1220 Bank Street, 3rd Floor South
Richmond, VA 23219
(804) 371-8200
http://www.vdba.virginia.gov

Major Business Facility Job Tax Credit.
Companies locating or expanding in Virginia can receive a corporate income tax credit for each new full-time job created beyond 50 jobs — or 25 jobs for companies locating in an Enterprise Zone or economically distressed area. Jobs that do not qualify include seasonal or building-related and security positions.

Green Job Creation Tax Credit.
This tax credit for “green” companies awards an annual tax credit of $500 for each salary that is $50,000 or more for up to 350 jobs. The credit is allowed in the first taxable year after the job has been filled for at least one year and in each of the four succeeding years. Green jobs are related to the field of renewable, alternative energies.

Enterprise zones
The enterprise zone program encourages investment and job creation in 57 designated urban or rural zones throughout Virginia. The program offers cash grants for creation of jobs that offer health benefits and pay a wage at least 1.75 times above the federal minimum wage. Jobs that pay double the federal minimum wage receive an $800 tax credit. Cash grants are also available for qualified real estate investments in the designated zones.
Contact:
Virginia Department of Housing and Community Development
600 E. Main St., Suite 300
Richmond, Virginia 23219
(804) 371-7030
http://www.dhcd.virginia.gov

Foreign trade zones
There are five foreign trade zones in Virginia, designated by the U.S. Department of Commerce. These zones allow businesses to defer paying U.S. customs duties on imported goods held within the zone until the goods enter the United States for consumption. No duties are paid if the goods are re-exported. Companies also do not have to pay duties on any goods that are damaged or on waste products.
Contact:
Virginia Department of Business Assistance
P.O. Box 446
Richmond, VA 23218
(804) 371-8200
http://www.vdba.virginia.gov

Technology zonesJurisdictions in Virginia can establish technology zones to attract targeted industries. Qualified businesses locating or expanding in a zone receive local permit and user fee waivers, local tax incentives, special zoning treatment or exemptions from ordinances. Once a zone is established, the incentives can be provided for up to 10 years. Each locality administers its own program.

Governor’s Opportunity FundThis “deal-closing” fund is used when Virginia faces competition for a major investment in Virginia. The grant is given to a locality for the benefit of the company. It can be used for projects such as site acquisition, expansion of broadband capacity, training or construction of buildings.
Contact:
Virginia Economic Development Partnership
P.O. Box 798
Richmond, Virginia 23218-0798
(804) 545-5610
http://www.YesVirginia.org

Center for Innovative Technology
CIT helps grow Virginia’s technology industry. Its CIT Entrepreneur program provides up to $100,000 in funding for promising high-growth technology companies and helps owners identify potential equity investors.
Contact:
CIT
2214 Rock Hill Road, Suite 600
Herndon, VA 20170-4228
(703) 689-3000

Virginia Department of Minority Business Enterprise
The program provides advice, technical support and access to capital for minority businesses, along with offering certification that can help win business from state agencies and other private-sector vendors.
Contact:
Virginia Department of Minority Business Enterprise
1111 E. Main St., Suite 300
Richmond, VA 23219
(804) 786-6585
http://www.dmbe.virginia.gov

GENEDGE Alliance
With field offices around the state, GENEDGE Alliance provides manufacturers with expertise in areas such as hiring, supply-chain management and lean management practices. It also partners with facilities such as the Old Dominion University Business Gateway and the Manufacturing Technology Center in Wytheville.
Contact:
http://www.vpmep.org
Northern Virginia: (540) 722-3405
Richmond: (804) 323-2226
Southside: (276)666-8890 x221

Virginia Enterprise Initiative
A program that helps low-income, women, and minority entrepreneurs get business skills training and access to capital, including loans up to $35,000. The program operates at locations around the state.
Contact:
Virginia Department of Housing and Community Development
501 N. Second St.
Richmond,  VA 23219
(804) 371-7040
http://www.dhcd.virginia.gov

Virginia Small Business Financing Authority
Run by the financial services division of the Department of Business Assistance, the authority helps businesses with public and private financing and is the statewide issuer of industrial development bonds.
Contact:
Virginia Department of Business Assistance
1220 Bank Street, 3rd Floor South
Richmond, VA 23219
http://www.dba.virginia.gov/vsbfa.shtml

Virginia Tobacco Commission Southside Capital Access Program
The program encourages banks in Southside to lend money to borrowers who might not otherwise qualify for loans. It creates and helps to fund a loan loss reserve at each participating bank.
Contact:
Virginia Small Business Financing Authority
1220 Bank Street, 3rd Floor South
Richmond, VA 23219
(804) 371-8254
http://www.vdba.virginia.gov/vsbfa_TobaccoCAP.shtml


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