Virginia's Incentives Policy
Incentives in economic development are frequently discussed but often inadequately understood. Virginia takes very seriously her stewardship of public dollars and aims always to make wise investments.
Commonwealth's Development Opportunity Fund (formerly Governor's opportunity fund)
The Commonwealth’s Development Opportunity Fund (COF) is a discretionary financial incentive established to support projects that create new jobs and investment in accordance with certain criteria established by state legislation. Grants are made to the community and may be used for such things as site acquisition and development; transportation access; public or private utility extension or capacity development; construction or build-out of publicly or privately owned buildings or training.
Tobacco Region Opportunity Fund
The Tobacco Region Opportunity Fund (TROF) makes grants to localities in Virginia’s tobacco producing regions to assist with specific projects that result in the creation of new jobs and investment. Grants are made to the community at the discretion of the Tobacco Region Revitalization Commission. The goal of the Fund is to attract competitive projects expected to have a regional impact due to the magnitude of new employment and investment, and the possibility of follow-on industry.
Transportation Partnership Opportunity Fund
The Transportation Partnership Opportunity Fund Act authorizes the Governor to award grants, revolving loans or other financing tools and equity contributions to an agency or political subdivision of the Commonwealth of Virginia or to a private entity or operator that has submitted a proposal or has signed a comprehensive agreement to develop a transportation facility pursuant to applicable provisions of the Code. The Virginia Department of Transportation (VDOT) administers this program.
Virginia Jobs Investment Program
The Virginia Jobs Investment Program (VJIP) provides services and funding to companies creating new jobs or experiencing technological change. As a business development incentive supporting economic development since 1965, VJIP reduces the human resource development costs of new and expanding companies. With strong support from the Governor and General Assembly, VJIP is completely state-funded, demonstrating Virginia’s commitment to enhancing job opportunities for its citizens. Click here for more information about VJIP.
Virginia Economic Development Incentive Grant
The Virginia Economic Development Incentive Grant (VEDIG) is a discretionary performance incentive, designed to assist and encourage companies to invest and create new employment opportunities by locating significant headquarters, administrative or service sector operations in Virginia.
Virginia Investment Partnership
The Virginia Investment Partnership (VIP) Grant is a discretionary performance incentive designed to encourage continued capital investment by Virginia companies, resulting in added capacity, modernization, increased productivity, or the creation, development, and utilization of advanced technology. The program is targeted at manufacturers or research and development services supporting manufacturing. New in FY 2016, a local match is required in an amount at least equal to 50 percent of the VIP grant.
Major Eligible Employer Grant
The Major Eligible Employer Grant (MEE) is a discretionary performance incentive designed to encourage significant capital investment and job creation by Virginia manufacturers and other basic employers. New in FY 2016, the time period between the completion of the project and payment of the first installment of the MEE grant is shortened from six years to three years.
Major Business Facilities Job Tax Credit
Qualified companies locating or expanding in Virginia are eligible to receive a $1,000 income tax credit for each new fulltime job created over a threshold number of jobs, beginning in the first taxable year following the taxable year in which the major business facility commenced or expanded its operations.
Economic Development Access Road Program
The Economic Development Access Program assists localities in providing adequate road access to new and expanding manufacturing or processing companies, research and development facilities, distribution centers, regional service centers, corporate headquarters, or other basic employers. The Virginia Department of Transportation (VDOT) administers this program.
Virginia Enterprise Zone Program
The Virginia Enterprise Zone Program, administered by the Virginia Department of Housing and Community Development (DHCD), assists with business development and expansion in specially targeted areas throughout the state called Enterprise Zones. Click here for more information.
Establishment of Technology Zones
Virginia cities, counties and towns have the ability to establish by ordinance, one or more technology zones to attract growth in targeted industries. Qualified businesses locating or expanding operations in a zone may receive local permit and user fee waivers, local tax incentives, special zoning treatment or exemptions from ordinances. Each locality designs and administers its own program. Click here for more information.
New Market Tax Credit Program
The federal New Market Tax Credit (NMTC) Program authorizes the channeling of private investment capital to economically distressed areas through a Community Development Entity (CDE)—a privately owned, for-profit financial corporation. The goal is to improve access to capital in distressed areas. Click here for an overview of the program. For more information, visit the NMTC website.
Commonwealth Research Commercialization Fund
The Commonwealth Research Commercialization Fund (CRCF) was established to attract public and private research funding to institutions of higher education and to increase technology-driven economic development in Virginia by focusing on research with great commercialization potential. The fund is administered by the Center for Innovative Technology. Click here for an overview of the fund.
Virginia Small Business Financing Authority
The Virginia Small Business Financing Authority (VSBFA) is the Commonwealth of Virginia's economic development and business financing arm. We help banks make loans to businesses that can demonstrate repayment ability, but where the bank needs additional collateral support or a more robust secondary repayment source. For more information, please visit the VSBFA website.
Governor's Agriculture and Forestry Industries Development Fund
The Governor's Agriculture and Forestry Industries Development Fund (AFID) is a discretionary performance-based incentive designed to attract new and expanding agriculture and forestry processing/value-added facilities using Virginia-grown products. The AFID program is administered by the Virginia Department of Agriculture and Consumer Services.
Establishment of Defense Production Zones
Virginia’s cities, counties, and towns have the ability to establish, by ordinance, one or more defense production zones to attract growth in national defense-related businesses. Each locality designs and administers its own program. Click here for more information.
Historically Underutilized Business Zones (HUBZones)
The Historically Underutilized Business Zone (HUBZone) Program is a federal program designed to stimulate economic development and create jobs in urban and rural communities. The program provides Federal contracting preferences to small businesses that obtain HUBZone certification in part by employing staff who live in a HUBZone. The company must also maintain a “principal office” in one of these specially designated areas. Click here for more information.
Port Volume Increase Tax Credit
Virginia’s Port Volume Increase Tax Credit benefits manufacturing, distribution, agriculture, and mineral and gas companies that utilize Virginia’s port facilities. A company that increases its usage by five percent in a single calendar year over its base year of port cargo volume can claim a credit against its corporate income tax. This tax credit is administered by the Virginia Port Authority. Click here for more information.
Barge and Rail Usage Tax Credit
Virginia's Barge and Rail Usage Tax Credit benefits companies who move cargo by barge or rail rather than by truck or other motor vehicle on Virginia's highways. This tax credit is administered by the Virginia Port Authority. Click here for more information.
International Trade FAcility Tax Credit
Virginia's International Trade Facility Tax Credit benefits companies by offering tax credits for either creating new jobs or capital investment in an international trade facility as a result of moving five percent more cargo through a public or private port facility in Virginia than in the preceding taxable year. This tax credit is administered by the Virginia Port Authority. Click here for more information.
Port of Virginia Economic and Infrastructure Development Grant Program
The Port of Virginia Economic and Infrastructure Development Grant Program (POV Grant) provides a grant to incentivize qualified companies to locate or expand maritime-related employment centers in Virginia to encourage and facilitate the growth of the Port of Virginia. This grant program is administered by the Virginia Port Authority. Click here for more information.
Community Development Block Grants
The Virginia Community Development Block Grant (CDBG) is a federally-funded grant administered by the Department of Housing and Community Development (DHCD). DHCD provides funding to eligible units of local government for projects that address critical community needs including housing, infrastructure and economic development. Funds may be used for off-site activities such as water and sewer line extensions or treatment facilities and road and rail access. Funds may also be available as loans for on-site assistance that supports economic development. Click here for more information.
Data Center Sales and Use Tax Exemption
Virginia offers an exemption from the sales and use tax for computer equipment bought or leased between July 1, 2010 and June 30, 2035 for use in a data center. Click here for an overview of the tax exemption. For more information, click here to view the information sheet.
Foreign Trade Zones
Virginia offers companies access to six general purpose foreign trade zones (FTZs) designated by the U.S. Department of Commerce. These zones are dispersed across the state. Click here for more information.
Green Job Creation Tax Credit
For taxable years beginning before January 1, 2018, the Green Job Creation Tax Credit allows a $500 credit against the Virginia personal or corporate income tax for each new green job created within the Commonwealth by the taxpayer. The credit is available for all qualifying jobs paying at least $50,000. Click here for more information.
Refundable Research and Development Tax Credit
For taxable years beginning on or after January 1, 2011, but before January 1, 2022, the Refundable Research and Development Tax Credit allows a credit against the Virginia corporate income tax for qualified research and development expenses incurred in Virginia. Click here for more information.
Rail Industrial Access Program
The Rail Industrial Access Program provides grants to construct railroad tracks to new or substantially expanded industrial and commercial projects having a positive impact upon economic development in Virginia. This grant program is administered by the Virginia Department of Rail and Public Transportation. Click here for more information.
Recycling Investment Tax Credit
The Recycling Investment Tax Credit allows manufacturers to claim a corporate income tax credit in the amount of 20 percent of the purchase price paid during the taxable year for machinery and equipment used predominantly in or on the premises of manufacturing facilities or plant units which manufacture, process, compound, or produce items of tangible personal property from recyclable materials. Click here for more information.
Worker Retraining Tax Credit
The Worker Retraining Tax Credit allows an employer to claim a tax credit for the training costs of providing eligible worker retraining to qualified employees. The credit may be applied against individual income tax, estate and trust tax, corporate income tax, bank franchise tax, and taxes imposed on insurance companies and utility companies. Click here for more information.