Form Bru - Application For Barge And Rail Usage Tax Credit Page 3
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3Instructions for Application for Barge and Rail Usage Tax Credit
General Information
When to Submit Application
An income tax credit is allowed for transporting cargo containers
Form BRU and any supporting documentation must be completed
by barge and rail. The amount of the credit is $25 per 20-foot
and mailed no later than April 1 for credits earned the preceding year.
equivalent unit (TEU) or 16 tons of noncontainerized cargo moved
For any application received without a postmark, the date received
by barge or rail rather than by trucks or other motor vehicles on
by the Department will be used to determine if the application was
Virginia’s highways. For purposes of this credit, a 40-foot or 45-
received by the filing deadline.
foot container is equivalent to two TEUs. Containers for which this
Where to Submit Application
credit is claimed must result from a diversion of shipments from the
Commonwealth’s highways. To receive a credit, an international
Submit Form BRU and attachments to the Department of Taxation,
trade facility is required to apply to the Department. No more than
ATTN: Tax Credit Unit, P.O. Box 715, Richmond, VA 23218-0715
$1.5 million in tax credits can be issued in any fiscal year. If the
or fax it to 804-367-3021.
amount of tax credits requested exceeds $1.5 million, the credits
What to Expect from the Department
will be allocated proportionately among all qualified taxpayers.
The Department will determine the allowable credit amount for the
If the Department needs additional information we will contact you
taxable year and provide a written certification to each taxpayer.
by May 1 and you will have until May 15 to respond. If you have
not received acknowledgement of your application by May 31, call
Taxpayers can claim this credit against the Individual Income Tax,
804-786-2992.
the Corporate Income Tax, the Tax on Estates and Trusts, the Bank
Franchise Tax, the Insurance Premiums License Tax, and the tax
The Department will issue the credit by June 30. If you have not
on public service corporations. Any unused tax credits may be
received your credit certification by July 15, call 804-786-2992.
carried over for five taxable years. Any amount of credit attributable
What Does the Taxpayer Need to Do
to a partnership, S-corporation, or limited liability company shall
Upon receiving notification of the allowable credit amount, taxpayers
be allocated to the individual partners, shareholders, or members,
may claim the allowable credit amount on the applicable Virginia
respectively, in proportion to their ownership or interest in the
income tax return and compute any carryover credit amount.
business entity.
As an attachment to their return, a corporation must file Form
For purposes of this credit, an “international trade facility” is
500CR; an individual must file Schedule CR; and a pass-through
a company that is doing business in Virginia and is engaged in
entity must file Form 502ADJ.
port-related activities, including but not limited to warehousing,
distribution, freight forwarding and handling, and goods processing;
IMPORTANT
has the sole discretion and authority to move cargo in containers
All business taxpayers should be registered with the Department
originating or terminating in Virginia; uses maritime port facilities
before completing Form BRU. If you are not registered, complete
located within the Commonwealth; and undertakes activities that
Form R-1.
result in utilizing a barge or rail to move cargo containers rather
than using trucks or other motor vehicles on a highway. To qualify
If the tax return upon which this credit will be claimed is due on or
for this credit, an international trade facility must have an
before May 1, you may need to either submit an extension payment
ownership interest in the cargo and control the choice of
for any tax due or file an amended return once you have received
transportation.
the credit certification.
The credit is effective for taxable years beginning on and after
Pass-Through Entities
January 1, 2011, but before January 1, 2017. No tax credits can
In order to allocate the credit to the partners, shareholders, or
be issued after the fiscal year ending June 30, 2017.
members, each pass-through entity must file Form PTE with
Instructions for Lines 2 and 3
the Department within 30 days after the credit is granted. This
information should be sent to: Department of Taxation, Attn: Tax
For purposes of this credit, 16 tons of noncontainerized cargo
Credit Unit, P.O. Box 715, Richmond, VA 23218-0715 OR you
is equivalent to one TEU. If you are claiming this credit for
may fax it to 804-786-2800. Please do not do both.
noncontainerized cargo, convert the tonnage to TEUs and enter
the number of TEUs on Lines 2 and 3.
Credit must be allocated among owners in proportion to each
owner’s percentage of ownership or participation in the pass-
What to Attach
through entity.
You must complete and attach your validation summaries (current
All pass-through entities distributing this credit to their owners,
and previous taxable years) from the VPA. Additionally, Schedule A
shareholders, partners or members must give each a Schedule VK-
should be submitted for shipments not listed on the VPA validation
1, Owner’s Share of Income and Virginia Modifications and Credits.
summary or shipped through non-VPA owned ports. In the
“Container Size” column, indicate whether the container is a 20-foot,
Where to Get Help
40-foot, or 45-foot container, or state the amount of noncontainerized
Write the Virginia Department of Taxation, ATTN: Tax Credit Unit,
cargo. For purposes of this credit, a 40-foot or 45-foot container is
P. O. Box 715, Richmond, VA 23218-0715 or call 804-786-2992. If
equivalent to two TEUs, and 16 tons of noncontainerized cargo is
you need assistance completing the VPA Validation Report please
equivalent to one TEU. Copies of Schedule A can be submitted if
call 757-391-6235 or you may email . For
additional space is needed.
assistance with the container and cargo verification process, contact
Taxpayers should retain all supporting documentation, such as
the Virginia Port Authority at (757) 391-6235 or .
bills of lading that show the amount of cargo that was shipped and
the date of shipment.
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