In addition to the many programs offered by the City of Virginia Beach, the Commonwealth of Virginia also offers a number of incentives to assist business growth and encourage startups. These include financial assistance, facilities development grants, tax credits and exemptions. Virginia also offers work-force training and technical support programs.
Below are a few of the most popular programs. For more information, refer to the Virginia Guide to Business Incentives.
Commonwealth’s Opportunity Fund
The Commonwealth’s Opportunity Fund (COF) is a discretionary financial incentive established to support projects that create new jobs and investment in accordance with certain criteria established by state legislation. Grants are made to the community and may be used for such things as site acquisition and development; transportation access; public or private utility extension or capacity development; construction or build-out of publicly or privately owned buildings or training.
Grant requests are made by the community for a project under the following conditions:
Once a company decides on a Virginia location, the community works with the state within the guidelines of the program to seek a COF award. The application and success of the grant request will be based on the project’s eligibility and the locality’s financial support toward the project, as well as the actual project requirements and availability of funds. The community is required to enter into a performance agreement with the company before receipt of the grant to document performance expectations.
Virginia Jobs Investment Program
The Virginia Jobs Investment Program (VJIP) is an incentive program offering customized recruiting and training assistance to companies that are creating new jobs or experiencing technological change. The program is designed to reduce human resource development cost by providing direct funding to qualifying new and expanding companies.
Major Eligible Employer Grant (MEE)
The Major Eligible Employer Grant Program (MEE) is a discretionary program used to encourage major basic employers to invest in Virginia and to provide a significant number of stable employment opportunities by either making a significant expansion to existing operations or constructing new ones
Virginia Economic Development Incentive Grant
The Virginia Economic Development Incentive Grant (VEDIG) is a discretionary performance incentive, designed to assist and encourage companies to invest and create new employment opportunities by locating significant headquarters, administrative or service sector operations in Virginia.
Corporate Income Tax
The Virginia corporate income tax rate is a flat 6 percent; however, the sales factor in the state's income apportionment formula is double weighted, benefiting companies with high payrolls and property in Virginia.
Sales and Use Tax Exemptions
Virginia has one of the lowest sales tax rates in the country - 6 percent (4.3 percent state, 1 percent local, 0.7 percent transportation). There are some exemptions, such as items purchased for resale or used in manufacturing, pollution control devices, purchases used in research and development, and charges for utilities and Internet access. Computer equipment purchased or leased for the processing, storage, retrieval, or communication of data in large data centers will also qualify for this tax exemption.
Property Tax Incentives
Virginia does not tax property at the state level. Real estate and tangible personal property are taxed at the local level. Items not taxed in Virginia include manufacturers' inventory, intangible property and furniture/fixtures.
Worker Retraining Tax Credit
Employers can receive tax credits for 30 percent of expenditures on worker retraining programs for qualified employees. The credit is capped at $2.5 million in a taxable year. Eligible programs include courses at Virginia community colleges certified by the Virginia Department of Business Assistance or apprenticeship agreements certified by the Virginia Apprenticeship Council. For more information, visit the Virginia Department of Business Assistance website.
Major Business Facility Job Tax Credit
Companies locating or expanding in Virginia are eligible to receive a $1,000 income tax credit for each new full-time job created beyond 50 jobs - or 25 jobs for companies locating in an Enterprise Zone or economically distressed area. Jobs that do not qualify include seasonal or building-related and security positions. Read about the program here.
Virginia Leaders in Export Trade (VALET)
This program assists companies throughout Virginia in expanding their international business. VALET offers a powerful combination of capital resources provided by the state along with professional services from expert, private-sector partners. Each year, 25 qualifying companies ramp up their global marketing efforts through this program. Companies graduate from this comprehensive, two-year business acceleration program with a greater focus on the potential of export trade profits. On average, companies experience a 54 percent increase in international sales during and immediately following the program. Learn more about VALET.
Green Job Creation Tax Credit
This tax credit for "green" companies awards an annual tax credit of $500 for each salary that is $50,000 or more for up to 350 jobs. The credit is allowed in the first taxable year after the job has been filled for at least one year and in each of the four succeeding years. Green jobs are related to the field of renewable, alternative energies.
Virginia Department of Taxation
P.O. Box 115 Richmond, Virginia 23218
Many companies across the U.S. are shifting a significant portion of their workforce to permanent telework. That wave of increased telework also will affect how companies make decisions when evaluating locations for future projects. The Commonwealth of Virginia has adopted new statutory language that enables VEDP to take telework positions, held by Virginia residents, into account when offering performance-based economic development incentives for new, competitive site-selection projects.