October 19, 2015
Re: § 58.1-1821: Farm Wineries and Vineyards Tax Credit Application
Dear *****:
This will reply to your letter in which you appeal the denial of an application for the farm wineries and vineyards tax credit (the "Credit") submitted by (the "Taxpayer") for the 2014 taxable year.
FACTS
The Taxpayer filed its application for the Credit after the April 1, 2015 deadline required for claiming the Credit for the 2014 taxable year. The Department denied certifying the Credit. The Taxpayer states that it presumed the deadline for filing was April 15 and requests that the Department grant the Credit.
DETERMINATION
Virginia Code 58.1-339.12 allows individual and corporate taxpayers to claim a credit for Virginia farm wineries and vineyards in an amount equal to 25 percent of the cost of all qualified capital expenditures made in connection with the establishment of new Virginia farm wineries and vineyards and capital improvements made to existing Virginia farm wineries and vineyards. The total amount of the Credit available for all taxpayers for each calendar year is limited to $250,000. If applications for the Credit exceed $250,000, the Department allocates the Credit to all applicants on a pro rata basis.
In order to receive the Credit, an eligible taxpayer must submit Form FWV and any supporting documentation to the Department no later than April 1 in order to claim the Credit for the preceding taxable year. This requirement is clearly set forth in the instructions for the application and in the corporate and individual income tax instructions.
Because the Credit is subject to an annual cap, the Department must have a deadline for tax credit applications. Adopting a policy of approving late applications for the Credit could result in the amount of tax credits exceeding the tax credit cap for a particular year. The Department's policy of establishing a hard deadline for capped tax credits has been applied to all capped tax credits that are administered by the Department. See Public Document (P.D.) 04-201 (11/4/2004) and P.D. 13-189 (10/18/2013).
In this case, the Taxpayer submitted its 2014 Form FWV to the Department after the April 1, 2015 deadline passed. Because the Taxpayer failed to submit its application in a timely fashion, the Taxpayer's request cannot be granted.
The Code of Virginia sections and public documents cited are available on-line at www.tax.virginia.gov in the Laws, Rules & Decisions section of the Department's web site. If you have any questions regarding this response, you may contact ***** in the Office of Tax Policy, Appeals and Rulings, at *****.
Sincerely,
Craig M. Burns
Tax Commissioner
AR/1-6038353191.B