What's New For Tax Credits

In addition to the new credits, several changes to existing tax credits impact taxpayers filing their 2012 returns.

• Education Improvement Scholarships Tax Credit HB 321 & SB 131 – Effective for taxable years beginning on and after January 1, 2013, but before January 1, 2018.  Allows taxpayers to claim a credit  against the  individual income tax, corporate income tax, bank franchise tax,  insurance premiums license tax, or tax on public service corporations for contributions to  approved scholarship foundations.  Capped at $25 million per fiscal year.  Unused tax credits would be carried over for five years.  Approved scholarship foundations must donate 90% for scholarships.  administered by the Department of Education.
• Land Preservation - Effective for tax year 2012, the maximum amount of credit that can be claimed by each taxpayer is $100,000.  The LPC cap for tax year 2012 is $111,054,000. Affidavit Requirements
• Neighborhood Assistance Act (NAP) HB 321 & SB 131 – Expands the Neighborhood Assistance Act Tax Credit program by increasing the tax credit percentage from 40 percent to 65 percent of the value of donations.  Additionally, the cap for NAP has been increased from $11.9M to $15M.  The credit cap for education proposals has been increased from $4.9M to $8M and the credit cap for all other proposals remains at $7M.  HB 368 expands the professional services eligible for tax credits to include services provided by mediators certified by the Judicial Council of Virginia.
•  Major Business Facility Job Tax Credit – Interaction with Enterprise Zone Job Creation Grant Program HB 841 – Effective for taxable years beginning on or after January 1, 2012, a qualifying business is allowed to receive both an Enterprise Zone grant and a Major Business Facility tax credit.  However, this bill prohibits both the tax credit and the grant being allowed for the same job created.
• Major Business Facility Job Tax Credit HB 714 & SB 368 –   Effective taxable years beginning January 1, 2009 through December 31, 2014, extends the time during which the credit may be taken over a two-year period.
• Port Tax Credit HB1183 & SB 578 – Effective July 1, 2012 increases the jobs portion of the International Trade Facility Tax Credit from $3,000 to $3,500 per qualified full-time employee and allows taxpayers to claim the Barge and Rail Usage Tax Credit for non-containerized cargo.  Extends the sunset for all three Port credits until 12/31/2016.
• Qualified Equity And Subordinated Debt Investments Credit – Effective January 1, 2012 the cap has increased to $4 million.
• Research & Development Tax Credit – Use this spreadsheet to compute the Virginia base amount for calendar and fiscal year filers.
• Telework Expenses Tax Credit HB 551 - Effective January 1, 2012, but before January 1, 2017, a tax credit may be granted to employers who incur eligible telework expenses or conduct telework assessments. This credit is capped annually at $1 million. Employers may apply for a credit which does not exceed $1,200 per telework employee and/or $20,000 for the cost of preparing a telework assessment. The amount of credit granted to each employer cannot exceed $50,000 for each calendar year. Additionally, the credit for the cost of preparing an assessment can only be claimed one time. The credit is nonrefundable with no carry-over period.

LPC Affidavit Requirements

(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.

Last Updated 4/16/2013 8:50