Virginia Form Itf - Application For International Trade Facility Tax Credit Page 6
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7Application for International Trade Facility
Tax Credit Instructions
General Information
Port Job Tax Credit: A “qualified full-time employee” is
defined as an employee filling a new, permanent full-time
An “international trade facility” is defined as a company
position in an international trade facility in the Commonwealth.
that is engaged in port-related activities, including, but not
A “new, permanent full-time position” is defined as a job of
limited to, warehousing, distribution, freight forwarding and
indefinite duration, created by the company as a result of the
handling, and goods processing; uses maritime port facilities
establishment or expansion of an international trade facility
located in the Commonwealth of Virginia; and transports
in the Commonwealth, requiring a minimum of 35 hours of
at least 10% more cargo, measured in 20-foot equivalent
work per week for the entire normal year. A “normal year” is
marine containers, through maritime port facilities in the
defined as at least 48 weeks in a calendar year. Seasonal
Commonwealth during the taxable year than was transported
and temporary positions; jobs created by shifting a job
by the company through such facilities during the preceding
function from elsewhere in the Commonwealth; and positions
taxable year.
ancillary to the principal activities performed by employees at
For taxable years beginning on and after January 1, 2011, but
international trade facilities do not qualify as new, permanent
before January 1, 2017, an income tax credit is allowed that
full-time positions. No credit is allowed for the same jobs for
is equal to either $3,500 for every employee hired by Virginia
which a major business facility job tax credit was claimed
shippers that results from increased cargo moving through a
pursuant to Va. Code § 58.1-439.
Virginia cargo facility operated by the Virginia Port Authority
No credit is permitted for any employee for whom a credit
or 2% of any capital investment made by a Virginia shipper
under this section was previously earned by a related party
to facilitate increased cargo moving through a Virginia cargo
or trade or business under common control.
facility operated by the Virginia Port Authority. Taxpayers can
elect either credit, but cannot claim both credits in the same
Fractional Employees: If an employee is employed in the
taxable year. The credit can be claimed against the individual
Commonwealth for less than 12 full months during the
income tax and the corporate income tax. Any amount of
credit year, the credit amount is equal to $3,500 multiplied
credit attributable to a partnership, S corporation, or limited
by a fraction, the numerator of which is the number of full
liability company must be allocated to the individual partners,
months that the qualified full time employee worked for the
shareholders, or members, respectively, in proportion to their
international trade facility for the year, and the denominator
ownership or interest in the business entity.
of which is 12.
Any international trade facility that creates jobs or makes
Credit Recapture: Part or all of the Port Job Tax Credit may
capital investments in a “tobacco-dependent locality” is
be recaptured. If the number of qualified full-time employees
eligible for a port tax credit equal to $7,000 per job created
in any of the 5 years succeeding the credit year decreases
or 4% of qualified capital investment expenses, to the extent
below the average number of qualified full-time employees
that money is available in the Technology Initiative in
employed during the credit year, the credit is recaptured by
Tobacco-Dependent Localities Fund (the Fund). Check
recomputing the credit which was earned for the original
the box and provide the locality information if the credit is
credit year using the decreased number of qualified full-time
earned in a tobacco-dependent locality. The Department of
employees and subtracting the recomputed credit amount
Taxation (the Department) will adjust the amount of credit
from the amount of credit previously earned. If the average
based on the money available in the Fund. If the amount
number of qualifying full-time employees employed at an
of credits allowable for companies in tobacco-dependent
international trade facility falls below the amount employed
localities exceeds the amount deposited in the Fund, the
by the taxpayer prior to claiming any credits in any of the 5
credits will be allocated to taxpayers on a pro rata basis by
taxable years succeeding the credit year, all credits earned
the Department.
with respect to the international trade facility are recaptured.
Any recapture first reduces credits earned but not yet allowed
To receive a credit, taxpayers are required to apply to the
and credits allowed but carried forward before it increases a
Department. No more than $250,000 in tax credits will be
taxpayer’s tax liability.
issued in any fiscal year. If the amount of tax credits requested
exceeds $250,000, the credits will be allocated proportionately
When claiming the Port Job Tax Credit, complete and return
among all qualified taxpayers. The Department will determine
the Schedule B with your completed Form ITF. You must also
the credit amount for the taxable year and provide a written
submit Form ITF and Schedule A for the subsequent 5 years.
certification to each taxpayer.
Port Investment Tax Credit: A “capital investment” is defined
The amount of the credit is limited to 50% of the taxpayer’s
as the amount properly chargeable to a capital account for
tax liability for the taxable year. Any unused credit amount
improvements to rehabilitate or expand depreciable real
can be carried forward for 10 years.
property placed in service during the taxable year and
the cost of machinery, tools, and equipment used by an
international trade facility directly related to the movement
of cargo and placed in service on or after January 1, 2011.
Machinery, tools, and equipment do not include the basis of
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