Virginia Form Itf - Application For International Trade Facility Tax Credit Page 7
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8Application for International Trade Facility
Tax Credit Instructions
General Information
work per week for the entire normal year. A “normal year” is
defined as at least 48 weeks in a calendar year. Seasonal
An “international trade facility” is defined as a company that
and temporary positions; jobs created by shifting a job
is engaged in port-related activities, including, but not limited
function from elsewhere in the Commonwealth; and positions
to, warehousing, distribution, freight forwarding and handling,
ancillary to the principal activities performed by employees at
and goods processing; uses maritime port facilities located
international trade facilities do not qualify as new, permanent
in the Commonwealth of Virginia; and transports at least 5%
full-time positions. No credit is allowed for the same jobs for
more cargo, measured in (i) one International Organization
which a Major Business Facility Job Tax Credit was claimed
for Standardization ocean container, with a minimum 20-foot
pursuant to Va. Code § 58.1-439.
length, (ii) 16 tons of noncontainerized cargo, or (iii) one
unit of roll-on/roll-off cargo through any publicly or privately
No credit is permitted for any employee for whom a credit
owned cargo facility located within the Commonwealth
under this section was previously earned by a related party
through which cargo is transported during the taxable year
or trade or business under common control.
than was transported by the company through such facilities
Fractional Employees: If an employee is employed in the
during the preceding taxable year. Export cargo must be
Commonwealth for less than 12 full months during the
loaded on a barge or ocean-going vessel and import cargo
credit year, the credit amount is equal to $3,500 multiplied
must be discharged from a barge or ocean-going vessel at
by a fraction, the numerator of which is the number of full
such facility.
months that the qualified full time employee worked for the
For taxable years beginning on and after January 1, 2011, but
international trade facility for the year, and the denominator
before January 1, 2017, an income tax credit is allowed that
of which is 12.
is equal to either $3,500 for every employee hired by Virginia
Credit Recapture: Part or all of the Port Job Tax Credit may
shippers that results from increased cargo moving through a
be recaptured. If the number of qualified full-time employees
Virginia cargo facility operated by the Virginia Port Authority
in any of the 5 years succeeding the credit year decreases
or 2% of any capital investment made by a Virginia shipper
below the average number of qualified full-time employees
to facilitate increased cargo moving through a Virginia cargo
employed during the credit year, the credit is recaptured by
facility operated by the Virginia Port Authority. Taxpayers can
recomputing the credit which was earned for the original
elect either credit, but cannot claim both credits in the same
credit year using the decreased number of qualified full-time
taxable year. The credit can be claimed against the individual
employees and subtracting the recomputed credit amount
income tax and the corporate income tax. Any amount of
from the amount of credit previously earned. If the average
credit attributable to a partnership, S corporation, or limited
number of qualifying full-time employees employed at an
liability company must be allocated to the individual partners,
international trade facility falls below the amount employed
shareholders, or members, respectively, in proportion to their
by the taxpayer prior to claiming any credits in any of the 5
ownership or interest in the business entity.
taxable years succeeding the credit year, all credits earned
A qualified company that claims employees for the Major
with respect to the international trade facility are recaptured.
Business Facility Job Tax Credit or the International Trade
Any recapture first reduces credits earned but not yet allowed
Facility Tax Credit cannot receive a Port of Virginia Economic
and credits allowed but carried forward before it increases a
and Infrastructure Development Zone Grant (POV Zone
taxpayer’s tax liability.
Grant) for those previously claimed jobs.
When claiming the Port Job Tax Credit, complete and return
To receive a credit, taxpayers are required to apply to
the Schedule B with your completed Form ITF. You must also
the Department. No more than $1,250,000 in tax credits
submit Form ITF and Schedule A for the subsequent 5 years.
will be issued in any fiscal year. If the amount of tax
Port Investment Tax Credit: A “capital investment” is defined
credits requested exceeds $1,250,000, the credits will be
as the amount properly chargeable to a capital account for
allocated proportionately among all qualified taxpayers. The
improvements to rehabilitate or expand depreciable real
Department will determine the credit amount for the taxable
property placed in service during the taxable year and
year and provide a written certification to each taxpayer.
the cost of machinery, tools, and equipment used by an
The amount of the credit is limited to 50% of the taxpayer’s
international trade facility directly related to the movement
tax liability for the taxable year. Any unused credit amount
of cargo and placed in service on or after January 1, 2011.
can be carried forward for 10 years.
Machinery, tools, and equipment do not include the basis of
any property for which a credit was previously granted; which
Port Job Tax Credit: A “qualified full-time employee” is
was previously placed in service in Virginia by the taxpayer, a
defined as an employee filling a new, permanent full-time
related party, or a trade or business under common control;
position in an international trade facility in the Commonwealth.
or which was previously placed in service in Virginia and has
A “new, permanent full-time position” is defined as a job of
a basis in the hands of the person acquiring it, determined
indefinite duration, created by the company as a result of the
by reference to the basis of the property in the hands of the
establishment or expansion of an international trade facility
person from whom it was acquired. “Capital investments”
in the Commonwealth, requiring a minimum of 35 hours of
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