During the 2013 Session, the Virginia General Assembly enacted House Bill 1872 (2013 Acts of Assembly, Chapter 289), which allows any investment made by a taxpayer that is transacted via an online general solicitation, an online broker, or a funding portal (“crowdfunding”) to be eligible for any income tax credit for which it qualifies.
This legislation required the Department of Taxation (“the Department”) to develop guidelines to facilitate the submission of any electronic documents that are required to be submitted by a taxpayer to document or verify that a crowdfunding investment eligible for a tax credit has been made. Because selling equity through crowdfunding was not generally permissible by the Securities and Exchange Commission ("SEC") at the time 2013 House Bill 1872 was enacted, the Department postponed the development of the guidelines required by such legislation until the SEC released its crowdfunding regulations. Because the SEC’s regulations regarding crowdfunding became effective on May 16, 2016, the Department began developing the guidelines required by 2013 House Bill 1872 during 2016.
On October 4, 2016 the Department of Taxation published final Crowdfunding Guidelines.