Biodiesel Fuels Credit

Beginning on Jan. 1, 2008, a credit is available for Virginia biodiesel and green diesel fuel producers who produce up to 2 million gallons of fuel per year. This credit is only available during the first 3 years of production. Corporate and individual taxpayers may claim a nonrefundable credit against their tax liability for the production of these fuels.

Form BFC is used to apply to Virginia Tax for a Biodiesel Fuels Credit after the Department of Mines, Minerals, and Energy (DMME) has certified that you have satisfied all the requirements of § 58.1-439.12:02.

The amount of the credit is $0.01 per gallon, not to exceed $5,000 annually. The amount of the credit allowed cannot exceed the tax liability for the tax year the credit is being claimed. Unused credits may be carried forward for 3 years.

The amount of the credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company (LLC) must be allocated to the individual partners, shareholders, or members in proportion to their ownership or interest within the business entity using Form PTE.

The credit may be transferred to another taxpayer. The transfer of the credit must be completed before the end of a tax year in order to use the credit for that tax year.

To claim this credit, complete Part XIX of Schedule CR and attach a copy of the certificate from the Virginia Department of Taxation to your income tax return.

Reference: Virginia Code 58.1-439.12:02

Green Job Creation Tax Credit

This credit has been extended until Dec. 31, 2017.

Allows a $500 income tax credit for the creation of a "green" job paying an annual salary of $50,000 for taxable years beginning on and after Jan. 1, 2010 but before Jan. 1, 2018. Each taxpayer is allowed a credit for up to 350 new green jobs.

In order to qualify for the tax credit, the taxpayer must have created the green job and filled it during the taxable year in which the credit is claimed. You cannot apply if you have applied for a Major Business Facility Job Tax Credit for the same jobs. The credit is allowed for the taxable year in which the job has been filled for at least 1 year and for each of the 4 succeeding taxable years provided the job is continuously filled during the respective taxable year.

The Form GJC and any supporting documentation must be completed and sent to the Virginia Department of Taxation, Tax Credit Unit, P.O. Box 715, Richmond, VA 23218-0715 at least 90 days prior to the due date of your return. You must apply each year you are eligible to earn credit for each job that is continuously filled (not to exceed 5 years). Any unused tax credits may be carried over for 5 taxable years.

The amount of the credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company (LLC) must be allocated to the individual partners, shareholders, or members in proportion to their ownership or interest within the business entity using Form PTE within 30 days after the credit is granted.

Reference: Virginia Code 58.1-439.12:05

Recyclable Materials Processing Equipment And Alternative Recycling Credit

This credit has been extended until Dec. 31, 2019.

A Virginia resident or manufacturing business entity may claim an income tax credit for purchases of equipment that can produce tangible personal property items from recyclable materials. The manufacturing facility must be located within Virginia, and must be engaged in the manufacturing, production, processing, or compounding of tangible personal property for sale. The recycling machinery or equipment must be used predominantly in or on the premises of manufacturing facilities or plant units which manufacture, process, compound, or produce items of tangible personal property from recyclable materials, within the Commonwealth.

The credit is 20% of the purchase price paid during the taxable year for the recycling equipment. The total allowable credit may not exceed 40% of the tax liability, computed prior to applying the credit. Unused credits may be carried forward for 10 years. The annual cap is $2 million.

The application is a 2-step process.

To apply for certification of equipment, eligible applicants must file Form DEQ 50-11S with the Virginia Department of Environmental Quality (DEQ) on or before March 1. DEQ is responsible for certifying that the machinery and equipment is integral to the recycling process.  

To apply for the tax credit, all eligible applicants who have received written certification from DEQ must file Form RMC with Virginia Tax on or before June 1. 

Effective Jan. 1, 2008, the amount of the credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company (LLC) must be allocated to the individual partners, shareholders, or members in proportion to their ownership or interest within the business entity using Form PTE.

For additional information on how to qualify for certification, contact the Department of Environmental Quality P.O. Box 1105, Richmond, VA 23218 or call 804.698.4145.

Individual filers complete Schedule CR, Section 1, Part 4, and corporate filers complete Form 500CR, Section 1, Part 7, to claim the credit. 

Reference: Virginia Code 58.1-439.7

Vehicle Emissions Testing Equipment, Clean Fuel Vehicle, and Certain Refueling Property Credit

This credit may be claimed for purchases of vehicle emissions testing equipment, clean fuel vehicles, and certain refueling equipment.

Vehicle Emissions Testing Equipment

The credit is equal to 20% of the purchase or lease price for equipment certified by the Department of Environmental Quality for vehicle emissions testing. The equipment must be located within, or adjacent to, any locality that requires an enhanced vehicle emissions inspection program.

Individual filers complete Schedule CR, Part VIII, and corporate filers complete Form 500CR, Part IX, to claim this credit. Attach a copy of the Department of Environmental Quality's letter to the equipment vendor certifying that the equipment configuration meets the regulations for use in the enhanced vehicle emissions inspection program. To obtain a copy of the letter, contact your equipment vendor or the DEQ Northern Virginia Regional Office in Woodbridge.

Clean Fuel Vehicle and Certain Refueling Property

General instructions: for taxable years beginning before Jan.1, 2006, a credit may be claimed for: 10% of the deduction allowed under IRC Section 179A for the purchase of clean fuel vehicles, including hybrid vehicles, principally garaged in Virginia, or for the purchase of refueling property placed in service in Virginia; or, for taxable years beginning before Jan. 1, 2007, 10% of the total costs used to compute the credit for electric vehicles under IRC Section 30. Individual filers complete Schedule CR, Part VIII, and corporate filers complete Form 500CR, Part IX, to claim this credit. For clean fuel vehicles, provide a property description. For qualified electric vehicles for which a federal credit was claimed, you must also attach federal Form 8834. For refueling property, attach a copy of federal Form 4562 or other form showing computation of the Federal Section 179A deduction. Unused credits may be carried forward for 5 years.

For taxable years beginning before Jan. 1, 2006 only: if you claimed a clean fuel vehicle deduction on your federal return, you may claim a credit on your Virginia return equal to 10% of the amount deducted on your federal return, not to exceed your Virginia tax liability. As explained in the general instructions, you must provide a description of the property for which the credit is being claimed. In lieu of a separate statement, you may write directly on the individual Schedule CR or the corporate Form 500CR. For example, if you claimed a clean fuel vehicle deduction on your federal individual income tax return for the purchase and use of a Honda Insight (hybrid vehicle), you should complete Schedule CR, Part VIII, lines 30 through 34, and write next to line 30, "Clean Fuel Vehicle - Honda Insight."

For taxable years beginning before Jan. 1, 2006 only: If you claimed a credit for qualified electric vehicles on your federal return, you may claim a credit on your Virginia return equal to 10% of the cost used to compute the federal credit.

For taxable years beginning before Jan. 1, 2007 only: If you claimed a deduction for clean fuel vehicle refueling property on your federal return, you may claim a credit on your Virginia return equal to 10% of the amount deducted on your federal return, not to exceed your Virginia tax liability.

Reference: Virginia Code 58.1 - 438.1.

Waste Motor Oil Burning Equipment Credit

For tax years beginning on or after Jan. 1, 1999, a business that operates a facility in Virginia that accepts waste motor oil from the public is allowed a tax credit equal to 50% of the purchase price paid for equipment used to exclusively burn waste motor oil.

The total amount of credit a taxpayer may claim per taxable year may not exceed $5,000. The taxpayer can only use the credit in the year the qualified equipment is purchased. Any unused portion of the credit may not be carried forward.

The Department of Environmental Quality must certify the equipment prior to your claiming this credit. Apply for certification by filing Form DEQ 50-12 with the Department of Environmental Quality at 629 E. Main Street, 5th floor, Richmond, VA 23219. For additional information contact the Department of Environmental Quality at 804-698-4145.

Individual filers complete Schedule CR, Part XVII, and corporate filers complete Form 500CR, Part XVIII, to claim this credit. Attach the certificate from the Department of Environmental Quality, receipts, invoices or other documentation to confirm purchase price paid.

Reference: Virginia Code 58.1-439.10