Virginia has long been recognized for its pro-business climate, well-educated workforce, and strategic location along the East Coast.  The state offers a variety of incentives to attract businesses, promote job creation, and support economic development.  The following is an overview of key incentives available to businesses in Virginia, particularly those in high-growth industries such as technology, manufacturing, energy, and life sciences.

Virginia Economic Development Incentive Grant (VEDIG)

Overview

VEDIG is a discretionary program designed to encourage businesses to invest and create jobs in Virginia.  The program provides grants to businesses based on their job creation and investment activities within the state.

Eligibility

• The business must create a minimum number of new full-time jobs in Virginia.

• Jobs must meet or exceed the average wage of the locality where the business operates.

• The business must make significant capital investments in Virginia.

Incentive Value

• The amount of the grant is determined based on the number of jobs created, wage levels, and the level of capital investment.

• Grants can range from $100,000 to several million dollars depending on the business’s impact on the state economy.

Application Process

Businesses must apply through the Virginia Economic Development Partnership (VEDP), providing details about their project and job creation projections.

Virginia Jobs Investment Program (VJIP)

Overview

The VJIP supports businesses that are creating jobs or expanding operations in the state.  The program offers financial assistance for workforce training, helping companies equip new employees with the skills they need to succeed.

Eligibility

• The business must create at least 25 new jobs in Virginia or be expanding its operations.

• The business must demonstrate a need for employee training related to the new positions being created.

Incentive Value

• The VJIP offers financial assistance to help cover the costs of training new employees.

• Assistance can be up to $1,000 per new employee for training costs, with the total amount depending on the number of employees and the training required.

Application Process

Businesses must apply through VEDP, detailing their workforce training needs and job creation plans.

Virginia Research and Development (R&D) Tax Credit

Overview

Virginia offers a R&D Tax Credit to encourage businesses to invest in innovation and technological development within the state.  This program is designed to support companies working on cutting-edge products and technologies.

Eligibility

• The business must conduct qualified R&D activities in Virginia, which include the development of new products, services, or technologies.

• The business must incur eligible R&D expenses within Virginia.

Incentive Value

• The credit provides up to 15% of eligible R&D expenditures made within Virginia.

• The credit can be applied to reduce the business’s state income tax liability.

Application Process

Businesses must apply to the Virginia Department of Taxation (VDT), submitting information about their R&D activities and eligible expenditures.

Virginia Technology and Biotechnology Research Fund

Overview

The Virginia Technology and Biotechnology Research Fund supports innovation and research in technology and life sciences industries.  The fund provides grants and financial assistance to businesses and research institutions engaged in the development of new technologies.

Eligibility

• The business or research institution must be involved in technology or biotechnology research and development.

• The project must be located in Virginia and focus on commercializing research in technology or life sciences.

Incentive Value

• The fund provides grants of up to $200,000 for qualifying research projects.

• The program prioritizes projects that have the potential for commercialization and job creation.

Application Process

Businesses must apply through VEDP, providing project details, anticipated outcomes, and commercialization plans.

Virginia State Sales and Use Tax Exemption for Manufacturing

Overview

Virginia offers a sales and use tax exemption for businesses engaged in manufacturing, processing, and certain other activities.  This incentive reduces the upfront costs for businesses investing in new equipment, machinery, and production facilities.

Eligibility

• The business must be engaged in manufacturing, research and development, or related activities.

• The equipment or materials purchased must be used directly in production or processing.

Incentive Value

• The exemption covers 100% of sales and use taxes on qualifying purchases, including machinery, equipment, and raw materials.

• This exemption helps reduce the overall cost of business investment.

Application Process

Businesses must apply to VDT, providing documentation on their purchases and intended use of the equipment or materials.

Virginia Historic Rehabilitation Tax Credit

Overview

The Virginia Historic Rehabilitation Tax Credit is a program that provides tax credits to businesses that invest in the preservation and rehabilitation of historic buildings.  The program encourages the revitalization of historic properties while preserving Virginia’s rich cultural heritage.

Eligibility

• The business must rehabilitate a building that is listed on the National Register of Historic Places or located in a designated historic district.

• The rehabilitation project must meet specific guidelines for preservation.

Incentive Value

• Businesses can receive up to 25% of eligible rehabilitation costs as a tax credit, with an additional 10% available for certified historic buildings.

• The total credit is capped at $5 million for large-scale projects.

Application Process

Businesses must apply through the Virginia Department of Historic Resources, submitting detailed project plans and cost estimates for review.

Virginia Coalfield Economic Development Fund

Overview

The Virginia Coalfield Economic Development Fund provides financial assistance to businesses that are investing in the coalfield regions of Virginia.  The fund encourages job creation, economic diversification, and infrastructure development in this historically underserved area.

Eligibility

• The business must be located in one of Virginia’s coalfield regions.

• The business must create new jobs and make significant capital investments.

Incentive Value

• The fund offers loans and grants for up to 50% of the cost of job creation, capital investment, and infrastructure development.

• Assistance is based on the economic impact of the project on the region.

Application Process

Businesses must apply to the Virginia Coalfield Economic Development Authority, providing information on the project’s economic impact and job creation potential.

Virginia Film Tax Credit

Overview

The Virginia Film Tax Credit encourages filmmakers and production companies to bring their projects to Virginia.  The program offers significant tax incentives for film and television productions, helping to reduce production costs.

Eligibility

• The production must meet minimum spending thresholds for qualified expenses.

• The production must occur within Virginia and spend a specified amount on local labor and services.

Incentive Value

• The program provides a tax credit of up to 15% of eligible production costs.

• The credit applies to expenditures for labor, equipment, and location fees incurred within Virginia.

Application Process

Businesses must apply through the Virginia Film Office, submitting production budgets, expenditure reports, and other required documentation.

Virginia Green Jobs Tax Credit

Overview

The Virginia Green Jobs Tax Credit encourages businesses to create jobs in the clean energy sector.  This incentive supports companies working in renewable energy, energy efficiency, and environmental technology.

Eligibility

• The business must be engaged in the clean energy sector, including renewable energy, energy efficiency, and environmental technology industries.

• The business must create new, full-time jobs in Virginia.

Incentive Value

• Businesses can receive a tax credit of up to $1,000 per new employee hired in a green job.

• The credit is available for up to 5 years, depending on the number of new jobs created.

Application Process

Businesses must apply through VDT, providing information on the business, job creation, and green job activities.