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 Schedule CR, Section 1, Part 19 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 Tax 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:

  1. 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.  
  2. 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 Credit

The credit is equal to 20% of the purchase or lease price paid during the taxable year for equipment certified by the Department of Environmental Quality (DEQ) for vehicle emissions testing. The equipment must be located within, or adjacent to, a locality that is required by law to implement an enhanced vehicle emissions inspection program.

Individual filers complete Schedule CR, Section 1, Part 8, and corporate filers complete Form 500CR, Section 1, Part 9, to claim this credit.

Enclose a copy of your Air Check Virginia Station Participation and Services Agreement or a copy of the Northern Virginia Analyzer Equipment Certification. For a copy of your agreement, contact Opus Inspection at 703.822.7587. Only expenses listed in the agreement, or dynamometers purchased or leased separately are eligible. You may obtain a copy of the Analyzer Equipment Certification by accessing the Forms section of the Air Check Virginia website

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 (DEQ) must certify the equipment prior to your claiming this credit. Apply for certification by filing Form DEQ 50-12 at 629 E. Main Street, 5th floor, Richmond, VA 23219. For additional information contact DEQ at 804.698.4145.

Individual filers complete Schedule CR, Section 1, Part 17, and corporate filers complete Form 500CR, Section 1, Part 15, to claim this credit. Attach the DEQ certificate, receipts, invoices or other documentation to confirm purchase price paid.

Reference: Virginia Code 58.1-439.10