- Barge and Rail Usage Tax Credit
- International Trade Facility Tax Credit
- Port Volume Increase Tax Credit
Barge and Rail Usage Tax Credit
You may qualify for this credit if:
You’re an international trade facility (ITF) operating in Virginia that moves cargo by barge or train, instead of by truck or other motor vehicles.
What is it?
A tax credit based on the how much more cargo you shipped by barge or rail this year than you did last year. The amount you shipped in the year prior to the one you’re applying for the credit for is your “base amount.” Your credit is based on the volume increase over your base amount.
The credit equals $25 per:
- 20-foot equivalent unit (TEU); or
- 16 tons of noncontainerized cargo; or
- 1 unit of roll-on/roll-off cargo.
Claim the credit against the following taxes:
- individual income tax
- corporation income tax
- fiduciary income tax
- bank franchise tax
- insurance premiums license tax
- tax on public service corporations
Is there a cap?
Yes. We can issue no more than $500,000 in barge and rail usage tax credits per year.
Who can apply for this credit?
An international trade facility, or ITF, is eligible for the credit. For the purposes of this credit, and ITF is defined as a company that:
- is doing business in Virginia;
- is engaged in port-related activities;
- has the sole discretion and authority to choose the method used to move cargo originating or terminating in Virginia;
- uses maritime port facilities located in Virginia; and
- uses barges and rail systems to move cargo through port facilities in Virginia rather than trucks or other motor vehicles on Virginia’s highways.
The ITF is the company itself, not the place the activities are taking place. To qualify for the credit, the ITF must have an ownership interest in the cargo.
To apply for this credit:
Complete Form BRU and send it to us by April 1. We’ll send you a letter certifying your credit by June 30.
Using the credit:
To claim the credit, complete the following and attach it to your return:
- Schedule CR, for individual and fiduciary returns
- Form 500CR, for corporate returns
- Schedule 502 ADJ, for pass-through entity returns
- Form 800CR, for insurance premiums license tax returns
For bank franchise tax, attach a copy of your certification letter to your return.
The credit claimed can’t be greater than your tax liability. Carry forward any unused credits for 5 years.
For more information, see:
International Trade Facility Tax Credit
You may qualify for this credit if:
- you hire more people because you’ve increased your shipments through an international trade facility (ITF); or
- you make a capital investment in an ITF.
What is it?
There are 2 types of credits available under this section. You can choose which of these you’d like to apply for, but can’t apply for both.
- The Port Jobs Tax Credit is an income tax credit equal to $3,500 per new, permanent full-time job created by your increase in shipments through an ITF.
- The Port Investment Tax Credit is an income tax credit equal to 2% of your capital investment in an ITF.
To qualify for either, the company must have moved at least 5% more cargo through Virginia port facilities this year than it did last year.
Claim the credit against the following taxes administered by Virginia Tax:
- individual income tax
- corporation income tax
Is there a cap?
Yes. We can’t issue more than $1,250,000 in international trade facility credits per year.
What is an international trade facility (ITF)?
For the purposes of this credit, an ITF is a company that:
- engages in port-related activities, including but not limited to:
- warehousing,
- distribution,
- freight forwarding and handling,
- and goods processing
- and uses Virginia maritime port facilities.
What is a “new, permanent full-time job” for the port jobs credit?
For the purposes of this credit, a permanent full-time job is one that requires at least 35 hours per week for the entire year.
The following types of positions don’t qualify for the credit:
- seasonal and temporary jobs
- jobs created by moving job responsibilities from somewhere else in Virginia,
- jobs not directly related to port activities.
You can’t use the same jobs to claim the international trade facility credit and the major business facility credit.
What is a “capital investment” for the port investment credit?
For purposes of this credit, a capital investment includes:
- exterior, structural, mechanical, or electrical improvements necessary to expand or rehabilitate a building for commercial or industrial use;
- excavations, grading, paving, driveways, roads, sidewalks, landscaping, or other land improvements necessary to expand or rehabilitate a building for commercial or industrial use;
- machinery, tools, and equipment directly related with the movement of cargo placed into service during the year. See the International Trade Facility guidelines for restrictions on machinery and tools.
For the purposes of this credit, capital investment does not include:
- the cost of acquiring any real property or building;
- furnishings;
- appraisal, architectural, engineering, or interior design fees;
- loan fees, points, or capitalized interest;
- legal, accounting, realtor, sales and marketing, or other professional fees;
- closing costs, permit fees, user fees, zoning fees, impact fees, and inspection fees;
- bids, insurance, signage, utilities, bonding, copying, rent loss, or temporary facilities costs incurred during construction;
- utility hook-up or access fees;
- outbuildings; and
- any well or septic system.
To apply for this credit:
Complete Form ITF and send it to us by April 1. We will send you a letter certifying your credit by July 15.
If you are applying for the International Trade Credit using Section 1 – “Port Job Tax Credit” you must file Form ITF for a total of 6 years:
- Year 1 to earn the credit;
- Years 2 -6 to determine if your credit is subject to recapture.
If your employment level at the facility declines during the “recapture” period (any of the 5 years after you first earned the credit), your credit amount will be adjusted and/or you’ll have to pay a portion of the credit back. The “recapture” amount is determined by the number of jobs lost.
Using the credit:
To claim the credit, complete the following and attach it to your return:
- Schedule CR, for individual returns
- Form 500CR, for corporate returns
- Schedule 502 ADJ, for pass-through entity returns
The credit can’t be greater than 50% of your tax liability. Carry forward any unused credits for 10 years.
For further information, see:
Port Volume Increase Tax Credit
You may qualify for this credit if:
You’re a business who increases your shipments or deliveries received through a Virginia port by 5% or more in the last calendar year. Your business must be in 1 of these industries:
- agriculture
- manufacturing or a distributor of manufactured goods
- mineral or gas extraction
To qualify, your “base volume” (the amount of goods you shipped or received through a Virginia port) must be 75 net tons or 10 TEUs of cargo. (1 TEU = 16 short tons, or 1 piece of roll of/roll on cargo.) Your credit is based on the increase in volume over your base volume.
What is it?
An income tax credit equal to $50 per TEU that you increase your port volume by. The Virginia Port Authority administers the credit.
Claim the credit against the following taxes administered by Virginia Tax:
- individual income tax
- corporation income tax
Is there a cap?
Yes. The Virginia Port Authority can issue no more than $3.2 million in Port Volume Increase credits per year.
To apply for this credit:
The Virginia Port Authority administers this credit. Contact the Virginia Port Authority for application and procedures. Applications are due by March 1 of the calendar year after the year you increase your port volume. Late applications are not eligible for the credit.
Using the credit:
To claim the credit, complete the following and attach it to your return:
- Schedule CR, for individual and fiduciary returns
- Form 500CR, for corporate returns
- Schedule 502 ADJ, for pass-through entity returns
The credit claimed can’t be greater than your tax liability. Carry forward any unused credits for 5 years..
Transferring the credit
The credit is transferrable. Credits issued for tax year 2018 and after can be transferred to another taxpayer, so long as the transfer takes place within 1 year of the credit being earned
- File Form PVT within one year from the date that your credit was issued by the Virginia Port Authority.
- Only transferees may claim the credit retroactively by amending a prior year return that is still within the statute of limitations (SOL). SOL is defined as a return whose original due date was no more than three years ago. For example: If your 2016 return was due April 15, 2017, you have until April 15, 2020 to file an amended return.
For more information, see: