Biodiesel and Green Fuels Producer Credit

You may qualify for this credit if:

You make up to 2 million gallons of biodiesel or green diesel per year. This credit is only available during the first 3 years of production.

“Biodiesel” is a fuel made from new and used vegetable oils or animal fats, or similar materials, designated B100, and meeting the requirements of ASTM D6751.

“Green diesel” is a fuel made from nonfossil renewable resources including cultivated plants and trees, their byproducts, animal fats, and other renewable resources, and meeting certain ASTM specifications.

What is it?

An income tax credit equal to 1ȼ per gallon of fuel produced. The maximum credit allowed is $5,000, not to exceed your tax liability. Carry forward any unused credits for 3 years.

Claim the credit against the following taxes administered by Virginia Tax:

  • individual income tax
  • corporation income tax

The credit is also transferrable. Claim the credit on the return for the tax year that you complete the transfer.

How to apply

The Virginia Department of Mines, Minerals and Energy (DMME) will certify that you’ve met all the requirements to apply for the credit. To apply, complete Form BFC, attach a copy of your certification from DMME, and send it to us.

Transferring the credit

Complete Form BFC and send it to us.

Using the credit

To claim the credit, complete the following and attach it to your return:

For more information, see Va. Code § 58.1-439.12:02.

Green Job Creation Tax Credit

You may qualify to claim this credit if:

You create a “green” job that pays an annual salary of at least $50,000. 

What is it?

A $500 income tax credit for each new green job created. You can claim a credit for up to 350 new jobs. You claim the credit the same year that you create the job, then each of the next 4 years so long as the job remains continuously filled.

The credit claimed can’t exceed your tax liability. Carry forward any unused credits for 5 years. Claim the credit against the following taxes administered by Virginia Tax:

  • individual income tax
  • corporation income tax

What is a “green” job?

For the purpose of this credit, it’s a job in an industry related to alternative and renewable energy. You’ll find a detailed definition of green jobs on the Secretary of Commerce and Trade’s website.

How to apply

Complete Form GJC and send it to us at least 90 days before your income tax return is due. You’ll need to reapply every year that you have jobs eligible for the credit. However, you can’t apply for this credit and the Major Business Facility Job Tax Credit or a related federal credit for the same jobs. Please see the Form GJC instructions for more details.

Using the credit

To claim the credit, complete the following and attach it to your return:

For more information, see Va. Code § 58.1-439.12:05

Recyclable Materials Processing Equipment And Alternative Recycling Credit

You may qualify to claim this credit if:

You make things from recycled materials in Virginia. Beginning July 1, 2020, you may also qualify if you recycle waste products into the raw materials others use to make things. 

What is it?

An income tax credit equal to 20% of the purchase price of equipment you buy to make things from recycled materials, (or to convert waste products into raw materials, after July 1). Claim the credit during the same year that you buy the equipment. 

The maximum amount of the credit can’t be more than 40% of your total tax liability. Carry forward any unused credits for 10 years. Claim the credit against the following taxes administered by Virginia Tax:

  • individual income tax
  • corporation income tax

Is there a cap?

Yes. We can issue no more than $2 million in recyclable materials processing equipment and alternative recycling credits per year. 

How to apply

Applying for this credit is a 2-step process. First, the Virginia Department of Environmental Quality (DEQ) has to certify that your equipment is integral to the recycling process. Visit the DEQ website for more information, and follow their process to apply for certification. 

Once DEQ certifies the equipment, step 2 is to file Form RMC with us by June 1. 

Using the credit

To claim the credit, complete the following and attach it to your return:

For more information, see Va. Code § 58.1-439.7

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

You may qualify to claim this credit if:

  • you buy or lease certain vehicle emissions testing equipment during the year, and 
  • you are located in, or next to, a locality that has an enhanced vehicle emissions inspection program in place.

What is it?

An income tax credit equal to 20% of the purchase or lease price paid during the year for the qualifying vehicle emissions testing equipment. The equipment must be located in, or adjacent to, a locality required to have an enhanced vehicle emissions inspection program. 

The credit can’t be greater than your tax liability. Carry forward any unused credits for 5 years.

Claim this credit against the following taxes administered by Virginia Tax:

  • individual income tax
  • corporation income tax

What sort of equipment is eligible for the credit?

  • Vehicle emissions testing equipment listed in your Air Check Virginia Station Participation and Services Agreement; or
  • Dynamometers (if purchased or leased separately)

In addition, all equipment must be certified by the Department of Environmental Quality (DEQ).

What localities qualify for the credit?

Eligible equipment must be located within, or next to, 1 of the following localities:

Counties

  • Arlington
  • Chesterfield
  • Fairfax
  • Hanover
  • Henrico
  • Prince William

Cities

  • Alexandria
  • Colonial Heights
  • Fairfax
  • Falls Church
  • Hopewell
  • Manassas
  • Manassas Park
  • Richmond

If the law expands to more localities, we will update this list.

Using the credit

To claim the credit, complete the following and attach it to your return. 

You should also enclose a copy of your Air Check Virginia Station Participation and Services Agreement or a copy of the Northern Virginia Analyzer Equipment Certification. If you need a copy of your agreement, contact Opus Inspection at 703.822.7587.

For more information:

Waste Motor Oil Burning Equipment Credit

You may qualify for this credit if:

Your business operates a facility in Virginia that accepts waste motor oil from the public.

What is it?

An income tax credit equal to 50% of the price paid for equipment used exclusively to burn waste motor oil. The maximum credit allowed is $5,000, not to exceed your tax liability. Excess credits can’t be carried forward. 

Claim the credit the same year that you buy the equipment. Claim the credit against the following taxes administered by Virginia Tax:

  • individual income tax
  • corporation income tax

Using the credit

The Department of Environmental Quality (DEQ) must certify your equipment before you can claim the credit. Visit their website and follow their procedures to apply for certification.

To claim the credit, complete the following and attach it to your return:

Please also include a copy of your DEQ certificate, and any receipts, invoices or other documentation to confirm the purchase price of the equipment.

For additional information, see Va. Code § 58.1-439.10.