Tax Type
Corporation Income Tax
Description
Recycling Machinery and Equipment; Credit Year
Topic
Credits
Date Issued
10-05-1992
October 5, 1992
Re: Request for Ruling: Corporate Income Tax
Dear*****************
This will reply to your letter of July 19, 1991 in which you request a ruling on behalf of your client,*****************(the "Company"), regarding the period in which your client is entitled to claim a credit for its purchase of recycling equipment.
FACTS
The Company's fiscal year end is August 31. During the year ending August 31, 1991, the Company purchased and paid for machinery and equipment to be used in recycling scrap metal into usable material. The machinery was not placed into service until some time during the Company's fiscal year ending August 31, 1992. The Company requests the department to determine if it is entitled to claim the recycling credit in the fiscal year ending August 31, 1991 or August 31, 1992.
RULING
Va. Code §58.1-445.1 provides "a credit against the tax imposed pursuant to §58.1-400 in an amount equal to ten percent of the purchase price paid during the taxable year... (Emphasis added.) Therefore, taxpayers are entitled to claim an income tax credit for their purchase of recycling equipment in the taxable year that the taxpayer purchases such equipment, regardless of when such equipment is placed into service. Because the Company purchased the recycling equipment during the fiscal year ending August 31, 1991, the Company will be entitled to claim the credit on the return for the year ending August 31, 1991.
The Company is entitled to claim the credit only to the extent that the equipment satisfies the other requirements of Va. Code §58.1-445.1.
Such requirements include, but are not limited to, certification of the equipment by the Virginia Department of Waste Management ("Waste Management"). Waste Management has promulgated Virginia Regulation (VR) 672-50-11 (copy enclosed) which provides taxpayers with information on the procedures that need to be followed to obtain certification of recycling equipment.
If you have any further questions please do not hesitate to contact the Department of Taxation or Waste Management.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6212O
Rulings of the Tax Commissioner