Tax Type
Individual Income Tax
Description
Recyclable Materials Processing Equipment Tax Credit
Topic
Credits
Date Issued
09-29-2010
September 29, 2010
Re: Ruling Request: Recyclable Materials Processing Equipment Tax Credit
Dear *****:
This is in response to your letter of May 1, 2009, in which you requested the Department of Taxation ("TAX") to reconsider the disallowance of the Recyclable Materials Processing Equipment Credit (the "Credit") on behalf of ***** (the "Taxpayers").
In your letter, you contend that the Taxpayers should be allowed a credit for recyclable materials processing equipment purchased by ***** (the "Recycler") in 2005.
A previous ruling of the Commissioner, Public Document ("P. D.") 10-136, dated July 12, 2010, addresses the question that you have presented. Based on the information that was provided by you in the present case, the credit was claimed by the Taxpayers on their 2005 individual income tax return. Therefore, as in PD 10-136, the Taxpayers do not qualify for the Credit, and the assessment is upheld.
According to TAX records, the balance of the assessment is *****. Payment of the remaining balance due should be made to: Virginia Department of Taxation, Office of Customer Relations, Customer Service Section, Post Office Box 1115, Richmond, Virginia 23218-1115. No additional interest will accrue provided the outstanding balance is paid within 30 days from the date of this letter.
The Taxpayers may still be able to claim the credit for the Recycler's purchase of recyclable processing equipment made in 2005, however. Under Va. Code § 58.1-439.7 "[a]ny tax credit not used for the taxable year in which the purchase price on recycling machinery and equipment was paid may be carried over for credit against the taxpayer's income taxes in the 10 succeeding taxable years until the total credit amount is used." Therefore, because the Recycler received the necessary certification from the Virginia Department of Environmental Quality for equipment that it purchased in 2005, the Taxpayers would be allowed to utilize any carried over credit amounts for taxable years beginning in 2008.
I trust that this reply answers your ruling request. Copies of the Code of Virginia sections cited and other reference documents are also available on-line in the Tax Policy Library section of the Department of Taxation's web site located at www.tax.virginia.gov. If you should have any questions regarding this ruling, you may contact ***** in the Policy Development Division of the Office of Tax Policy, at *****.
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- Sincerely,
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Craig M. Burns
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- Acting Tax Commissioner
- Acting Tax Commissioner
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Rulings of the Tax Commissioner