Virginia Administrative Code › Title 13 - HOUSING › Agency 5 - DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT › Chapter 112 - ENTERPRISE ZONE GRANT PROGRAM REGULATION › Part II - Procedures for Qualifying for General Tax Credit › Section 13VAC5-112-50 - Qualified business

Current through Register Vol. 40, No. 24, July 15, 2024
Qualification for the credit can occur by satisfying the
					 criteria in subdivisions 1 through 3 of this section. Any business firm may be
					 designated a qualified business for the purpose of this credit if:
1. A business firm establishes within an
				  enterprise zone a trade or business not previously conducted in the
				  Commonwealth of Virginia by such taxpayer, and at least 25% or more (except for
				  businesses qualifying prior to July 1, 1997, when it shall be at least 40% or
				  more) of the permanent full-time employees employed at the business firm's
				  establishment or establishments located within the enterprise zone must either
				  have incomes below 80% of the median income for the jurisdiction prior to
				  employment or be zone residents. Zone residency will be subject to annual
				  verification, while low-income status verification is only required upon
				  initial employment. A new business is also one created by the establishment of
				  a new facility and new permanent full-time employment by an existing business
				  firm in an enterprise zone and does not result in a net loss of permanent
				  full-time employment outside the zone.
2. A business firm is actively engaged in the
				  conduct of a trade or business in the Commonwealth of Virginia, and increases
				  the average number of permanent full-time employees employed at the business
				  firm's establishment or establishments located within the enterprise zone by at
				  least 10% over base taxable years' employment with no less than 25% (except for
				  businesses qualifying prior to July 1, 1997, when it shall be no less than 40%)
				  of such increase being employees who have incomes below 80% of the median
				  income for the jurisdiction prior to employment or are zone residents. In the
				  event that a company has activities both inside and outside the enterprise
				  zone, the business firm may not aggregate activity from outside the zone for
				  calculation of employment increase. Other employment positions that shall not
				  be used in the calculation of the 10% employment increase are referred to in
				  subdivision 3 of this section and
				  13VAC5-112-90.
3. A business firm is actively engaged in the
				  conduct of a trade or business in the Commonwealth and relocates to begin
				  operation of a trade or business within an enterprise zone and increases the
				  average number of permanent full-time employees by at least 10% over the base
				  taxable years' employment with no less than 25% or more (except for businesses
				  qualifying prior to July 1, 1997, when it shall be at least 40% or more) of
				  such increase being employees who have incomes below 80% of the median income
				  for the jurisdiction prior to employment or are zone residents. Current
				  employees of the business firm that are transferred directly to the enterprise
				  zone facility from another site within the state resulting in a net loss of
				  employment at that site shall not be included in calculating the increase in
				  the average number of permanent full-time employees by the business firm within
				  the enterprise zone.
4. If a
				  business firm is actively engaged in the conduct of a trade or business in the
				  Commonwealth and its operations continue following its assumption or
				  acquisition by another entity, the resulting entity must meet the requirements
				  for qualification described in subdivision 3 of this section and
				  13VAC5-112-90.
5. A business firm located within a
				  locality's enterprise zone or zones that moves to another location within that
				  locality's enterprise zone or zones must meet the requirements for
				  qualification described in subdivisions 1, 2, or 3 of this section and
				  13VAC5-112-90.
6. A business firm moving from one locality's
				  enterprise zone to another locality's enterprise zone prior to being qualified
				  shall be subject to the requirements described in subdivision 3 of this section
				  and 13VAC5-112-90.
7. A business firm that has already qualified
				  for enterprise zone incentives and moves from one locality's enterprise zone
				  into another locality's enterprise zone shall no longer be qualified unless the
				  firm increases its permanent full-time employment by an additional 10% over the
				  last year of qualification.
8.
				  Large qualified business firms must meet the terms of their documented
				  negotiation agreement with the Department pursuant to subdivision 2 of
				  13VAC5-112-20, prior to seeking
				  initial qualification under this section.
9. The business firm must certify annually to
				  the department on prescribed form or forms, and other documentation as required
				  by the department, that the firm has met the criteria for qualification
				  prescribed in subdivisions 1 through 7 of this section. The form or forms
				  referred to in this subdivision must be prepared by an independent certified
				  public accountant licensed by the Commonwealth and shall serve as prima facie
				  evidence that the business firm met the definition of a qualified business but
				  the evidence of eligibility shall be subject to rebuttal. The department or the
				  Department of Taxation or State Corporation Commission, as applicable, may at
				  its discretion require any business firm to provide supplemental information
				  regarding the firm's eligibility (i) as a qualified business firm or (ii) for a
				  tax credit claimed pursuant to
				  13VAC5-112-20.
Statutory Authority
§ 59.1-541 of the Code of Virginia.