What's New For Tax Credits
In addition to the new credits, several changes to existing tax credits impact taxpayers filing their 2014 returns.
- Barge and Rail Usage Tax Credit HB 873 – Expands type of cargo that qualifies for credit to include roll-on/roll-off cargo. Allows qualifying taxpayers to claim Barge and Rail Usage and Port Volume Increase Tax Credits for the same cargo if they meet criteria for both credits. Effective for fiscal year 2014 the cap has been decreased to $500,000.
- Day-Care Facility Investment Tax Credit – Expired December 31,2013.
- Education Improvement Scholarships Tax Credit SB 269 – Allows taxpayers to claim credit for the taxable year in which they make monetary or marketable securities donations to qualifying scholarship foundations, rather than the following year, applies to monetary or marketable securities donations made in taxable years beginning on or after January 1, 2014 and taxpayers can claim tax credits for qualifying donations made during taxable years 2013 and 2014 on their taxable year 2014 returns.
- International Trade Facility Tax Credit HB 873 – Expands type of cargo that qualifies for credit to include roll-on/roll-off cargo. Eliminates additional credit for jobs and capital investment in tobacco-dependent localities. Decreases the required cargo increase to 5%. Effective for fiscal year 2014 the cap has been increased to $1.25 million.
- Land Preservation – CAP is $100 million for 2013 and each year thereafter. Affidavit Requirements
- Effective for 2014, the Tax Department is unable to guarantee that any LPC-1 application received/postmarked on or after the first business day in November will be processed in time to make a current year transfer. We will use our best efforts and resources available to process these applications by the end of the year.
- Long-Term Care Insurance Credit – Expired December 31,2013
- Motion Picture Production Tax Credit HB 460 – Increases credit cap from $5 million per biennium to $6.5 million per fiscal year, beginning in fiscal year 2015. Added sunset date to tax credit (December 31, 2018).
- Research & Development Tax Credit HB 1220 & SB 623 – Effective for taxable years beginning on or after January 1, 2014, the tax credit amounts are (i) 15% of the first $234,000 in Virginia qualified research and development expenses, or (ii) 20% of the first $234,000 of Virginia qualified research and development expenses if the research was conducted in conjunction with a Virginia public or private college or university, to the extent the expenses exceed a base amount. Allows pass-through entities to elect to claim credit at entity level. Effective for fiscal years beginning on or after July 1, 2014, the annual cap has been increased to $6 million. Extends sunset date to December 31, 2018.
- Worker Retraining Tax Credit HB 1923 – Increases the maximum credit amount per employee for courses taken at a private school to $200 (or $300 if the retraining is a STEM or STEAM discipline) and adds a sunset date to the tax credit (December 31, 2017). Effective tax year 2014, Form WRC should be sent to the Virginia Economic Development Partnership for non-credit course approval.
(1) Section 58.1-512(D)(2) of the Land Conservation Incentives Act states: “Applications for otherwise qualified donations of a less-than-fee interest shall be accompanied by an affidavit describing how the donated interest in land meets the requirements of § 170(h) of the United States Internal Revenue Code of 1986, as amended, and the regulations adopted thereunder. The application with accompanying affidavit shall be submitted to the Department of Taxation, with a copy also provided to the Department of Conservation and Recreation.”
The requirements of this section can be met by completing Form LPC-1 Section VI- Less-Than-Fee-Donations. This section should be completed by the applicant describing how the donation meets the requirements of §170(h) of the United States Internal Revenue Code of 1986, as amended.
(2) Section 58.1-512.1(C) of the Land Conservation Incentives Act states: “Any appraisal submitted in support of an application for a credit under this article shall include an affidavit by the appraiser that to the best of his knowledge and belief the valuation complies with this section and shall set forth in the affidavit or refer to the specific portion of the appraisal setting forth the facts and basis for this knowledge and belief.”
The requirements of this section can be met with a notarized affidavit from the appraiser or a signed statement made under penalty of perjury that meets the requirements of § 8.01-4.3 of the Code of Virginia.
The statement should :
1. State to the best of the appraiser's knowledge and belief that the valuation made in the appraisal complies with § 58.1-512.1 of the Code of Virginia (1950), as amended.
2. Set forth specific facts and basis for this knowledge and belief (or refer to specific portions of the appraisal in which such facts are set out) and that such facts are true and correct to the best of the appraiser's knowledge and belief.
3. Include the declaration set out in § 8.01-4.3 such as: I declare under penalty of perjury that the forgoing is true and correct.
4. Include the date of the appraiser's signature.
The following would be an acceptable example:
I declare under penalty of perjury that to the best of my knowledge and belief (i) that the valuation made in the foregoing appraisal complies with § 58.1-512.1 of the Code of Virginia (1950), as amended, (ii) that all of the relevant facts and assumptions that form the basis for the valuation and compliance with § 58.1-512.1 are set forth in section(s) ___________ of this appraisal, and (iii) that such facts are true and correct to the best of my knowledge and belief except as qualified in the foregoing sections, and if qualified, that the stated reservations concerning the facts were taken into account in the valuation.
LPC-1 applications received on or after August 1, 2009 that do not have Section VI completed (if applicable), and a signed statement or a notarized affidavit from the appraiser, will be considered incomplete and cannot be processed until these requirements have been met.