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1995 SESSION
LD4913198Patrons--Davies, Mayer, Plum, Van Yahres and Watkins; Senators: Gartlan and Marye
Be it enacted by the General Assembly of Virginia:
1. That §§ 58.1-338 and 58.1-445.1 of the Code of Virginia are amended and reenacted as follows:
§ 58.1-338. (Applicable for all taxable years beginning on and after January 1, 1993, but before January 1, 1996) Tax credit for purchase of machinery and equipment for processing recyclable materials and for related basic research.
A. Any individual shall be allowed a credit against the tax imposed pursuant
to § 58.1-320 in an amount equal to ten 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 Waste Management
Environmental Quality shall certify that such machinery and equipment
are integral to the recycling process before the taxpayer shall be entitled
to the tax credit under this section. The 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.
The total credit allowed under this section in any taxable year shall not exceed forty percent of the Virginia income tax liability of such taxpayer.
B. A ten percent credit shall also be allowed for "basic research expenses" expended in Virginia and eligible for deduction for federal purposes, whether or not actually deducted, related to the (i) development of technology, including computer software, intended for application in producing machinery and equipment to manufacture, process, compound, or produce recycled items of tangible personal property for sale or (ii) development of technology, including computer software, intended to enhance the applications of recovered materials in products containing recycled content. The credit shall be claimed in the year in which the basic research expenses are incurred.
B. C. Any tax credit not used for the taxable year in
which the purchase price on recycling machinery and equipment was paid
or the basic research expenses incurred may be carried over for
credit against the individual's income taxes in the five succeeding taxable
years until the total credit amount is used.
C. D. For purposes of this section, the amount of any
credit attributable to the purchase of recycling machinery and equipment
or incurred as a basic research expense by a partnership or
electing small business corporation (S corporation) shall be allocated to the
individual partners or shareholders in proportion to their ownership or
interest in the partnership or S corporation.
§ 58.1-445.1. (Applicable for taxable years beginning on and after January 1, 1993, but before January 1, 1996) Tax credit for purchase of machinery and equipment for processing recyclable materials and for related basic research.
A. A corporation shall be allowed a credit against the tax imposed pursuant
to § 58.1-400 in an amount equal to ten 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 Waste Management
Environmental Quality shall certify that such machinery and
equipment are integral to the recycling process before the corporation shall
be entitled to the tax credit under this section. The corporation 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.
The total credit allowed under this section in any taxable year shall not exceed forty percent of the Virginia income tax liability of such taxpayer.
B. A ten percent credit shall also be allowed for "basic research expenses" expended in Virginia and eligible for deduction for federal purposes, whether or not actually deducted, related to the (i) development of technology, including computer software, intended for application in producing machinery and equipment to manufacture, process, compound, or produce recycled items of tangible personal property for sale or (ii) development of technology, including computer software, intended to enhance the applications of recovered materials in products containing recycled content. The credit shall be claimed in the year in which the basic research expenses are incurred.
B. C. Any tax credit not used for the taxable year in
which the purchase price on recycling machinery and equipment was paid
or the basic research expenses incurred may be carried over for
credit against the corporation's income taxes in the five succeeding taxable
years until the total credit amount is used.