The Port Volume Increase Tax Credit provides a tax incentive for certain companies that use Virginia port facilities. This credit may be claimed by taxpayers that are engaged in the manufacturing of goods or the distribution of goods as well as agricultural and mineral and gas entities. Any of these entities which increase their port cargo volume by a minimum of 5 percent in a qualifying calendar year can receive a $50 credit against the tax levied for each 20-foot equivalent unit or “TEU” above their base year port cargo volume.
The program awards $3.2 million tax credits each calendar year and allots up to $250,000 per qualifying taxpayer. However, if on March 15 of each year, the $3.2 million has not been fully allocated, then those taxpayers who have been allocated tax credits for the prior year shall be allowed a pro rata share of the remaining allocated tax credits. In such a case, a qualifying taxpayer may receive an amount greater than $250,000.
Transfer of Tax Credits
Any taxpayer which has been approved by the Virginia Port Authority and has received an allocation of tax credits is eligible to transfer credits to another taxpayer if it cannot use the credits themselves. The transfer has to take place within one year from the date the original taxpayer received an allocation of credits. A taxpayer may transfer a portion or all of the credits to one or more taxpayers. These credits can also be carried forward for 5 years or until the total amount of the credit has been claimed, whichever comes first.
For information on how to transfer your Port Volume Increase Tax Credits, or to purchase such tax credits, please contact Sue Ellyn Idelson at (978) 793-9574 or SIdelson@ClocktowerTC.com.