Ezel / Tax Rulings / VA
VA P.D. 14-115 General Provisions 2014-07-23

What annual caps applied to Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit through 2014?

Short answer: The bulletin listed annual caps of $3 million for 2005-2009, $5 million for 2010, $3 million for 2011, $4 million for 2012, $4.5 million for 2013, and $5 million for 2014. It said the $5 million statutory cap would remain after 2014 unless the General Assembly acted again.

Apply this to your situation

This page answers the general question as of 2014. Ezel answers yours, under current Virginia tax law, with citations.

Currency note: this ruling is from 2014
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is Virginia Tax Bulletin 14-5, general historical guidance supplementing Tax Bulletin 13-7. It is not a taxpayer-specific ruling and does not establish current credit availability, allocation, eligibility, application procedure, or annual caps. Budget actions changed the cap in multiple years, so verify current statutes, appropriations, and Department guidance. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Subject

Important Information Regarding the Annual Cap for the qualified equity and subordinated debt investments tax credit

Plain-English summary

Virginia summarized the historical annual program-wide caps for the Qualified Equity and Subordinated Debt Investments Tax Credit. Although the statute set a $5 million annual cap, budget actions imposed lower caps in several years.

  • 2005-2009: $3 million
  • 2010: $5 million
  • 2011: $3 million
  • 2012: $4 million
  • 2013: $4.5 million
  • 2014: $5 million

The bulletin said the statutory $5 million cap would continue after 2014 unless the General Assembly took further action. It supplemented Tax Bulletin 13-7 rather than replacing the underlying eligibility and application rules.

What this means for you

  • These are historical program-wide caps, not individual credit amounts.
  • The statutory cap and the budget-adjusted cap could differ by year.
  • Verify later appropriations before using the post-2014 statement.

Citations and references

  • Va. Code § 58.1-339.4(E).
  • 2014 House Bills 5001 and 5002, 2014 Acts chs. 1 and 2.
  • Virginia Tax Bulletins 13-7 and 14-5.

Source

Original ruling text

TAX BULLETIN 14-5
Virginia Department of Taxation

July 23, 2014

Important Information Regarding the Annual Cap for the qualified equity and subordinated debt investments tax credit

The amended budget bill for the 2012-2014 biennium (House Bill 5001, Chapter 1 of the 2014 Acts of Assembly) and the budget bill for the 2014-2016 biennium (House Bill 5002, Chapter 2 of the 2014 Acts of Assembly) include provisions that limit the annual cap for the Qualified Equity and Subordinated Debt Investments Tax Credit. This notice is intended to supplement Tax Bulletin 13-7 (PD 13-75) by providing taxpayers with information on the annual cap for this tax credit.
Annual Cap Amount

Under Va. Code § 58.1-339.4(E), the Qualified Equity and Subordinated Debt Investments Tax Credit is capped at $5 million annually. However, beginning with Taxable Year 2006, budget actions have imposed a lower tax credit cap for certain taxable years.

For Taxable Year 2013, the tax credit cap was limited to $4.5 million. Under the amended budget bill for the 2012-2014 biennium (2014 House Bill 5001) and the budget bill for the 2014-2016 biennium (2014 House Bill 5002), the tax credit cap will increase to $5 million for Taxable Year 2014. For taxable years after 2014, the tax credit cap will remain at the statutory cap of $5 million, unless the General Assembly takes future action to change it.

The following chart shows the annual tax credit cap for Taxable Years 2005 through 2014:
Taxable Year
Annual Tax Credit Cap Amount

2005-2009
$3 million

2010
$5 million

2011
$3 million

2012
$4 million

2013
$4.5 million

2014
$5 million

Further Instructions

If you have additional questions, please visit the Department’s website at http://www.tax.virginia.gov , or contact the Department at (804) 786-2992.

Related Documents

13-7

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