Virginia Economic Development Directory

Virginia State Incentives

The GOVERNOR’S OPPORTUNITY FUND (GOF) is designed as a “deal closing” fund to be employed at the governor’s discretion when necessary to secure a company location or expansion in Virginia. The GOF serves as a final resource for Virginia in the face of serious competition from other states or countries. Awards are made with the expectation that the grant to a locality will result in a favorable decision for the commonwealth. Grants are awarded to localities on a local matching basis. Capital is provided for site acquisition and development, transportation access, training, construction or build-out of publicly owned buildings.

VIRGINIA INVESTMENT PARTNERSHIP GRANT AND MAJOR ELIGIBLE EMPLOYER GRANT FUND: 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 to companies that have operated in Virginia for at least five years, and that are proposing expansion projects that meet certain criteria.

VIRGINIA ECONOMIC DEVELOPMENT INCENTIVE GRANT: A discretionary investment performance grant program designed to assist and encourage companies to invest and create new employment opportunities by locating significant headquarters, administrative or service sector operation in Virginia. Eligible projects must meet minimum requirements for capital investment and job creation.

The VIRGINIA JOBS INVESTMENT PROGRAM: (VJIP) offers customized recruiting and training to companies that are creating new jobs or are substantially retraining existing employees. VJIP offers funding and services through three distinct incentive programs that fit a spectrum of training and retraining needs that include the New Jobs Program, the Small Business New Jobs Program and the Retraining Program.

TOBACCO REGION OPPORTUNITY FUND: discretionary cash grant made to a locality in Virginia’s tobacco-producing regions by the Tobacco Indemnification and Community Revitalization Commission (generally in the southern and southwest regions of the state) for assistance with economic development projects.

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 exemption from ordinances. Once a local technology zone has been established, incentives may be provided for up to 10 years. Each locality designs and administers its own program.

SALES AND USE TAX EXEMPTION: Data centers are eligible for sales and use tax exemption if they invest at least $150 million, hire at least 50 employees (direct or indirect) that are paid at least 1.5 times the average prevailing wage in the locality where the center is located, and enter into an MOU with the Virginia Economic Development Partnership. The job threshold may be reduced if the facility is located in an Enterprise Zone or in a severely distressed community as defined by the Virginia Economic Development Partnership (unemployment at least 150 percent of the average statewide unemployment.) This exemption applies to the 5 percent sales tax on servers, server related equipment, chillers, generators and other enabling hardware.

CLEAN ENERGY MANUFACTURING INCENTIVE GRANT (CEMIG): A clean energy manufacturer can receive a grant for up to six years if it begins or expands its operations, makes a capital investment of more than $50 million and creates 200 or more new full-time jobs in Virginia on or after July 1, 2011. They also must enter a memorandum of understanding setting forth the requirements for capital investment and the creation of new full-time jobs. The governor may reduce the capital investment and full-time job minimums if the manufacturer is located in an area with an unemployment rate of 1.25 times the statewide average unemployment rate of the previous year. For wind manufacturers, the capital investment minimum is $10 million and the job minimum is 30.

“Clean energy manufacturer” is defined as a biofuel producer, a manufacturer of renewable energy or nuclear equipment/products, or “products used for energy conservation, storage, or grid efficiency purposes.” Renewable energy is defined to include solar, wind, hydro, biomass, waste energy, municipal solid waste, wave, tidal and geothermal. It may also include thermal or electric energy from biomass co-firing facilities. Public service corporations are not eligible for the grants.

CORPORATE INCOME TAX CREDITS: Virginia offers a variety of tax credits that are available for use against a company’s corporate tax liability:

• Major Business Facility Job Tax Credit
• Recycling Equipment Tax Credit
• Day Care Facility Investment Tax Credit
• Worker Retraining Tax Credit
• Virginia Port Tax Credit Programs
• Research and Development Tax Credit
• Green Job Creation Tax Credit

PROPERTY TAX EXEMPTIONS: Virginia does not tax intangible property, manufacturers’ inventory and manufacturers’ furniture, fixtures and corporate aircraft.

ECONOMIC DEVELOPMENT ACCESS PROGRAM: Administered by the Virginia Department of Transportation, it assists localities in providing adequate road access to new and expanding basic employers.

RAIL INDUSTRIAL ACCESS PROGRAM: Helps connect businesses to freight rail service by funding the construction or improvement of railroad tracks and facilities to serve industrial or commercial sites where freight rail service is currently needed or anticipated in the future. This grant program supports localities, businesses or industries seeking to provide freight rail service between the actual site of an existing or proposed commercial facility and common carrier railroad tracks.

TRANSPORTATION PARTNERSHIP OPPORTUNITY FUND (TPOF): Provides grants, revolving loans or other financial tools and equity contributions to encourage the development of transportation projects and to provide monies to address the transportation aspects of economic development opportunities.

VIRGINIA SMALL BUSINESS FINANCING AUTHORITY (VSBFA): Offers programs to provide businesses with access to capital needed for growth and expansion.

ENTERPRISE ZONES: Provides state and local incentives to businesses that invest and create jobs within Virginia’s enterprise zones, which are located throughout the state.

FOREIGN TRADE ZONES: Virginia offers six foreign trade zones designed to encourage businesses to participate in international trade by effectively eliminating or reducing customs duties. Also, numerous subzones are provided and additional ones can be designated to enhance the trade capabilities of specific companies.

DEFENSE PRODUCTION ZONES: Virginia authorizes its communities to establish local defense production zones to benefit businesses engaged in the design, development or production of materials, components or equipment required to meet the needs of national defense. Companies deemed ancillary to or in support of the aforementioned categories would also apply.