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
full-time positions. No credit is allowed for the same jobs for
which a Major Business Facility Job Tax Credit was claimed
An “international trade facility” is defined as a company
pursuant to Va. Code § 58.1-439.
that is engaged in port-related activities, including, but not
limited to, warehousing, distribution, freight forwarding and
No credit is permitted for any employee for whom a credit
handling, and goods processing; uses maritime port facilities
under this section was previously earned by a related party
located in the Commonwealth of Virginia; and transports
or trade or business under common control.
at least 10% more cargo, measured in 20-foot equivalent
Fractional Employees: If an employee is employed in the
marine containers, through maritime port facilities in the
Commonwealth for less than 12 full months during the
Commonwealth during the taxable year than was transported
credit year, the credit amount is equal to $3,500 multiplied
by the company through such facilities during the preceding
by a fraction, the numerator of which is the number of full
taxable year.
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
the Schedule B with your completed Form ITF. You must also
Department. No more than $250,000 in tax credits will be
submit Form ITF and Schedule A for the subsequent 5 years.
issued in any fiscal year. If the amount of tax credits requested
Port Investment Tax Credit: A “capital investment” is defined
exceeds $250,000, the credits will be allocated proportionately
as the amount properly chargeable to a capital account for
among all qualified taxpayers. The Department will determine
improvements to rehabilitate or expand depreciable real
the credit amount for the taxable year and provide a written
property placed in service during the taxable year and
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
include expenditures associated with exterior, structural,
work per week for the entire normal year. A “normal year” is
mechanical, or electrical improvements necessary to expand
defined as at least 48 weeks in a calendar year. Seasonal
or rehabilitate a building for commercial or industrial use and
and temporary positions; jobs created by shifting a job
excavations, grading, paving, driveways, roads, sidewalks,
function from elsewhere in the Commonwealth; and positions
landscaping, or other land improvements. However, “capital
ancillary to the principal activities performed by employees at
investments” do not include the cost of acquiring any real
international trade facilities do not qualify as new, permanent
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