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2007 SESSION

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VIRGINIA ACTS OF ASSEMBLY -- CHAPTER An Act to amend and reenact § 58.1-439.7 of the Code of Virginia, relating to tax credits for machinery and equipment used in the process of producing goods from recyclable materials. [H 3044] Approved

 

Be it enacted by the General Assembly of Virginia:

1. That § 58.1-439.7 of the Code of Virginia is amended and reenacted as follows:

§ 58.1-439.7. Tax credit for purchase of machinery and equipment for processing recyclable materials.

A. For taxable years beginning on and after January 1, 1999, but before January 1, 2007 2015, a corporation taxpayer shall be allowed a credit against the tax imposed pursuant to § 58.1-400 Articles 2 (§ 58.1-320 et seq.) and 10 (§ 58.1-400 et seq.) of Chapter 3, in an amount equal to 10 percent of the purchase price paid during the taxable year for machinery and equipment used exclusively in or on the premises of manufacturing facilities or plant units which manufacture, process, compound, or produce items of tangible personal property from recyclable materials, within the Commonwealth, for sale. For purposes of determining "purchase price paid" under this section, the taxpayer may use the original total capitalized cost of such machinery and equipment, less capitalized interest. The Department of Environmental Quality shall certify that such machinery and equipment are integral to the recycling process before the corporation taxpayer shall be entitled to the tax credit under this section. The corporation taxpayer shall also submit purchase receipts, invoices, and such other documentation as may be necessary to confirm the taxpayer's statement of purchase price paid, with the income tax return to verify the amount of purchase price paid for the recycling machinery and equipment.

B. The total credit allowed under this section in any taxable year shall not exceed 40 percent of the Virginia income tax liability of such taxpayer.

C. Any tax credit not used for the taxable year in which the purchase price on recycling machinery and equipment was paid may be carried over for credit against the corporation's taxpayer's income taxes in the 10 succeeding taxable years until the total credit amount is used.

D. A taxpayer claiming the tax credit provided by § 58.1-439.8 shall not be eligible for the tax credit provided by this section.

E. In the event a corporation converts to a partnership, limited liability company, or electing small business corporation (S corporation), such business entity shall be entitled to any unused credits of the corporation. Credits earned by a partnership, limited liability company, electing small business corporation (S corporation), or a predecessor corporation entitled to such credits, shall be allocated to the individual partners, members, or shareholders, respectively, in proportion to their ownership or interest in such business entities.

2. That the provisions of this act amending the sunset date shall be effective for taxable years beginning on or after January 1, 2007. The remaining provisions of this act shall be effective for taxable years beginning on or after January 1, 2008.