During the 2011 Session, the Virginia General Assembly enacted House Bill 1447 (2011 Acts of Assembly, Chapter 742), and Senate Bill 1326 (2011 Acts of Assembly, Chapter 745), which established the Research and Development Expenses Tax Credit.  This is an individual and corporate income tax credit for certain taxpayers that incur Virginia qualified research and development expenses.

During the 2014 Session, the Virginia General Assembly enacted House Bill 1220 (2014 Acts of Assembly, Chapter 227), and Senate Bill 623 (2014 Acts of Assembly, Chapter 306), which increased the overall credit cap, increased the per taxpayer credit cap, and allow pass-through entities to elect to claim the credit at the entity level.  These bills also require taxpayers to provide certain information to the Department of Taxation (“the Department”) when applying for the credit and require the Department to disclose certain information to the General Assembly regarding the credit on request.

On January 6, 2015, the Department published guidelines regarding the Research and Development Expenses Tax Credit.

During the 2016 Session, the Virginia General Assembly enacted House Bill 884 (2016 Acts of Assembly, Chapter 661), and Senate Bill 58 (2016 Acts of Assembly, Chapter 300), which amended the Research and Development Expenses Tax Credit.  Such changes increase the annual credit cap, increase the annual amount of credits each taxpayer may claim, allow a taxpayer to elect to compute the credit using a simplified method in lieu of the default method, and extend the sunset date for the credit.  

Accordingly, the Department is currently in the process of updating the Research and Development Expenses Tax Credit Guidelines to reflect changes set forth during the 2016 Session.  

Legislative Documents

HB 884 (2016) Text PDF Fiscal Impact Statement

SB 58 (2016) Text PDF Fiscal Impact Statement

HB 1220 (2014) Text PDF Fiscal Impact Statement

SB 623 (2014) Text PDF Fiscal Impact Statement

HB 1447 (2011) Text PDF Fiscal Impact Statement 

SB 1326 (2011) Text PDF Fiscal Impact Statement 

Guideline Development Documents

Draft Guidelines (286 PDF KB)

Workplan (PDF 20 KB)

Prior Guidelines

Prior Research and Development Expenses Tax Credit Guidelines (PDF 89 KB)