Incentives Available to Businesses in Chesterfield
A variety of incentive programs are available to companies locating or expanding in Chesterfield.
Manufacturing companies can benefit from Chesterfield’s low machinery and tools (M&T) tax. Specifically, at an effective rate of 25 cents per $100 of assessed value, Chesterfield offers one of the lowest machinery and tools tax of any urban/suburban locality in Virginia. This provides significant savings in operating costs to manufacturers.
For example, a $20 million equipment investment would generate an annual M&T tax bill of $50,000 in Chesterfield County. Compared to taxes of $200,000 per year in similar jurisdictions, with the more common effective rate of $1.00/$100, Chesterfield’s low machinery and tools rate would result in an annual savings of $150,000.
In addition, there is no tax on intangible property (financial assets, trademarks, patents) and no tax on inventory.
Sales and Use Tax Exemptions
The Commonwealth of Virginia offers some of the broadest sales and use tax exemptions in the U.S.A.
Major exemptions include:
- Computer equipment used in a data center for qualifying projects
- Manufacturers’ purchases used directly in production
- Items purchased for resale by distributors
- Utilities delivered through lines, pipes, or mains
- Purchases used for research and development
Aiding the stable tax environment in Virginia is a toolbox of credits and exemptions that companies can claim on taxes ranging from the sales and use tax to the corporate income tax.
Among the programs are the following:
- Barge and Rail Usage Tax Credit
- Offers per-unit credit for “international trade facilities” that transport containers using barge or rail, rather than trucks or other motor vehicles on Virginia’s highways.
- Commercial and Industrial Sales & Use Tax Exemption
- Offers sales and use tax exemption for purchases used directly in production or research and development.
- Data Center Retail Sales & Use Tax Exemption
- Offers exemption for qualifying computer equipment or enabling software purchased or leased for use in certain data centers in the Commonwealth that meet minimum investment and job creation requirements.
- Green Job Creation Tax Credit
- Offers annual individual or corporate income tax credit for each new green job meeting minimum hours requirements in taxable years beginning before January 1, 2021.
- International Trade Facility Tax Credit
- Offers income tax credit for capital investment or job creation related to an international trade facility.
- Major Business Facility Job Tax Credit
- Offers $1,000 income tax credit for each new full-time job created over a jobs threshold for companies locating or expanding in Virginia.
- Major R&D Expenses Tax Credit
- Offers individual and corporate income tax credit for incurring more than $5 million of Virginia qualified research and development expenses in taxable years beginning on or after January 1, 2016.
- Port Volume Increase Tax Credit
- Offers corporate income tax credit for manufacturing, distribution, agriculture, and mineral and gas companies that increase cargo volume at Virginia’s port facilities.
- Recyclable Materials Processing Equipment Tax Credit
- Offers income tax credit to manufacturers for the purchase of certified machinery and equipment used for processing recyclable materials beginning before January 1, 2020.
- Refundable R&D Expenses Tax Credit
- Offers individual and corporate income tax credit for taxpayers with qualified research and development expenses in Virginia under $5 million per year.
For qualifying projects, Chesterfield County may be willing to consider financial incentives on a case-by-case basis. The value of these incentives will be dependent upon the total investment (land, building, equipment) and employment numbers estimated for the project, pending direct discussions with the prospective company.
When justified by the project scope, Chesterfield County will also pursue available funding assistance from the Commonwealth of Virginia to further assist the company in areas such as workforce training, land acquisition, construction of industrial roads, or railroad access.
Financing may be available through Chesterfield County Industrial Development Authority with tax-exempt Industrial Revenue Bonds (IRBs) for manufacturing facilities.
Virginia will assist in constructing roads to sites not currently served by roads through the Industrial Access Road Funds program. The state will also assist in constructing rail lines to sites not currently served by rail through the Industrial Rail Access Funds program.
The Commonwealth’s Development Opportunity Fund (COF) supports economic development projects that create new jobs and investment in accordance with established guidelines. Chesterfield may request a grant to be paid to the company and matched by the county dollar for dollar.
The Business Expansion Incentive Fund (BEIF) was established for the purpose of securing job-creating economic development opportunities through the preservation and expansion of existing businesses in Chesterfield County. BEIF assistance may be in the form of a low-interest loan or a grant. Applications are made to the Chesterfield County Economic Development Department.
Chesterfield County can offer a “fast track” permitting process for both site and building plan review should a project need to be expedited. Our proven success with this process has been demonstrated with a number of development projects throughout Chesterfield.
To receive the incentive benefit, a company must make a request to the Director of Economic Development asking for “fast track” designation for the project.
Requests that meet the “fast track” criteria will then be forwarded to the Deputy County Administrator for Community Development, who will make the final determination on “fast track” designation.
Because Chesterfield County will expend significant resources expediting these review processes, the applicant, project engineer, and project architect must commit to exercising their respective roles in a similar time frame.
Upon submittal of a complete plan of development, the county’s Site Plan Team will review the documents in three working days, arrange a work session with the engineer and owner to discuss any comments, and address the changes that should be made in order to obtain site plan approval.
Upon the second submission of plans, the same process will be repeated and it will continue until the plans are submitted in approvable form; however, plans not approved within three submittals will be reconsidered for a continuation of fast-track status.
A similar system will be utilized for the building permit review process which may run concurrently.
Chesterfield Economic Development offers guidance to companies going through the permitting processes. Our staff will help identify which approvals are required for a particular project.
Companies locating in a Technology Zone may be eligible for Chesterfield County incentives.
The Virginia Jobs Investment Program (VJIP) provides services and funding to companies creating new jobs or experiencing technological change to reduce the human resource development costs for new companies, expanding companies, and companies retraining their employees.
Funding for each net new full-time job created or full-time employee retrained is based on a customized budget determined by an assessment of the company’s recruiting and training activities. Funding is reimbursable 90 days after the trainee is hired (for new jobs programs) or after the retraining activity has occurred (for retraining programs).
