Tax Type
Corporation Income Tax
Description
Major business facility job tax credit; Transportation company
Topic
Credits
Date Issued
11-23-1994
November 23, 1994
Re: Ruling Request: Major Business Facility Job Tax Credit
Dear********
This will respond to inquiries which you have made to a member of the Office of Tax Policy with respect to the Major Business Facility Job Tax Credit (the "credit"). You have requested a ruling from the department as to how the credit will apply to **********(the "Taxpayer").
FACTS
The Taxpayer is a corporation primarily engaged in the transportation industry in Virginia. The Taxpayer files its corporate income tax returns on the basis of a calendar year. The Taxpayer intends to add additional employees to its operations at*********located in Virginia in******** and*********. The Taxpayer will hire the new employees from November 1, 1994, through October 31, 1995. The employees shall be employed in the Taxpayer's business of providing transportation services. The Taxpayer has requested a ruling as to how the credit will apply to their situation.
RULING
Code of Virginia § 58.1-439, copy attached, provides that the credit shall apply for taxable years beginning on or after January 1, 1995, but before January 1, 2005. The credit is allowed to a company engaged in specified industries, where certain employment criteria have been satisfied. The specified industries include manufacturing, mining, agriculture, forestry, fishing, transportation, communications or a public utility subject to the corporate income tax. Because the Taxpayer's activities (as described to the department) meet the definition of a transportation company within the Standard Industrial Classification Manual, the Taxpayer is eligible to for the credit provided it otherwise meets the employment requirements.
In order to qualify for the credit, the Taxpayer must create at least 100 or more jobs for qualified full-time employees (as defined in Code of Virginia 58.1-439) within a single taxable year. By regulation, the department intends to provide that the qualifying employment may be satisfied during any continuous twelve month period selected by a taxpayer ending within the taxpayer's taxable year. Accordingly, the Taxpayer may elect to determine its eligibility for the credit by measuring the new jobs created for qualified full-time employees during the twelve month period beginning November 1,1994 and ending October 31, 1995. Assuming that the Taxpayer creates at least 100 jobs for qualified full-time employees during this period, it will qualify for the credit beginning in the credit year. The credit year is defined as the first taxable year following the year in which the qualifying job expansion has occurred.
The credit is $1,000 per qualified full-time employee employed during the credit year in excess of the 100 job threshold amount. The $1,000 credit amount is prorated with respect to any qualified full-time employee who is employed for less than 12 full months during the credit year. The Taxpayer will be eligible to claim the credit ratably in three equal parts, beginning in 1996 (the credit year) and ending in 1998 (i.e. $333 per year for three years, for each qualified full-time employee over 100).
While the determination of the number of qualified full-time employees and the amount of the credit is a factual matter, the activity described by the Taxpayer to the department will qualify for the credit as described herein this letter and Code of Virginia §58.1-439.
I assume this will answer your questions. If you have any questions regarding this ruling or the application of the credit, please contact *********in the Office of Tax Policy.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/8663M
Rulings of the Tax Commissioner