I bought a gun safe in Virginia -- can I get an income tax credit for it, and how much, and do I need to do anything besides just buying it?

Plain-English summary

Starting with Taxable Year 2023, Virginia created a new nonrefundable individual income tax credit for people who buy a firearm safety device -- a locking device for storing a firearm -- from a federally licensed firearms dealer. These Department guidelines explain how the credit works and how to actually claim it.

What qualifies

The device must satisfy two requirements:

1. It must be a genuine locking storage device. Think safes, gun safes, gun cases, or lock boxes -- something designed to store a firearm and designed to be unlocked only by a key, combination, or similarly secure mechanism. The device must reasonably limit access; if a pair of scissors or a ladder is all it takes to get past it, it doesn't qualify. That specifically excludes bags, racks, gun socks, mounts, trigger locks, and cable locks (those aren't "storage" devices), and it also excludes zip ties, rope, and string (which the ATF has said don't satisfy the federal locking-device definition Virginia's credit incorporates). If a storage device doesn't come with its own lock but is designed to be used with one, you can still qualify -- but only if you buy a compatible lock in the same transaction as the storage device, and then you can claim credit for both, up to the $300 cap.
2. It must be purchased from a federally licensed dealer. The seller has to hold a federal firearms license under 18 U.S.C. § 923 -- the guidelines note that if you're buying from a chain with multiple locations, you should confirm the specific store location is itself federally licensed.

How much you can claim

The credit equals the cost of the qualifying device -- purchase price plus any sales tax paid -- or $300, whichever is less. Shipping, handling, and other fees don't count toward the credit, even if tied to a qualifying purchase. And importantly: if you buy a firearm and the safety device in the same transaction, the device becomes ineligible for the credit -- buy them separately if you want to preserve eligibility.

You have to apply -- it's not automatic

Unlike most tax credits, this one requires an advance application to the Department (online, or by paper Form FSD) before you can claim it on your return. The Department allocates credits from a statewide $5 million annual cap, strictly first-come, first-served based on when applications are filed -- once the cap is reached for the year, no more credits are allocated even to otherwise-qualifying purchases. Each taxpayer can submit only one application, and be allocated only one credit, per taxable year.

If your credit exceeds your tax liability for the year, the unused portion carries forward for up to five years. Spouses filing a joint return can each separately apply for and claim up to $300 (a combined $600 maximum per couple, per year) -- but each spouse must submit their own individual application, and each is still capped at $300.

The guidelines work through three examples: a married couple each buying separate gun safes ($320 and $400) and each getting the full $300 credit (combined $600 on their joint return); a couple where only one spouse buys a device ($500 purchase, capped at the $300 credit); and a taxpayer whose $300 allocated credit exceeds her $200 tax liability for the year, so she uses $200 immediately and carries forward the remaining $100 to a future year.

What this means for you

Anyone planning to buy a gun safe, lock box, or similar device in Virginia

Apply to the Department (online or via Form FSD) before relying on claiming the credit on your return -- it isn't automatic, and it's capped at $5 million statewide per year on a first-come, first-served basis. Buy the safety device in a separate transaction from any firearm purchase, since buying both together disqualifies the device.

Anyone buying a lock separately from a compatible storage device

Buy the lock in the same transaction as the storage device if you want to claim credit for both -- buying them in separate transactions could jeopardize eligibility for the lock itself under these guidelines.

Married couples who both want to claim the credit

Each spouse needs to submit a separate application, and each is limited to a maximum $300 credit -- but a couple filing jointly can combine two separate $300 credits (up to $600 total) if each spouse makes a qualifying purchase and applies individually.

Anyone whose device cost exceeds $300 or whose tax liability is less than their allocated credit

The credit itself is still capped at $300 regardless of what you paid, but if your $300 credit exceeds your tax liability for the year, the excess carries forward for up to five years rather than being lost.

Common questions

Q: Does buying a trigger lock or cable lock for my firearm qualify for Virginia's Firearm Safety Device Tax Credit?
A: No. The credit is limited to storage devices with a locking mechanism -- safes, gun safes, gun cases, and lock boxes. Trigger locks and cable locks aren't "storage" devices and don't qualify, per these guidelines.

Q: If I buy a gun safe and a firearm together in one purchase, can I still claim the credit for the safe?
A: No. These guidelines specifically state that if a firearm is purchased in the same transaction as the safety device, the device becomes ineligible for the credit -- buy them in separate transactions.

Q: Is there a limit on how much total credit Virginia will give out for this program each year?
A: Yes -- a statewide $5 million annual cap, allocated strictly on a first-come, first-served basis as applications are filed. Once that cap is reached for a given tax year, no further credits are allocated for that year.

Q: Can my spouse and I both claim this credit if we file jointly?
A: Yes, but each spouse must submit a separate application and is individually capped at $300 -- meaning a couple can potentially claim up to $600 combined if each buys a qualifying device.

Citations and references

Statutes and regulations:

• Va. Code § 58.1-339.14 -- creates the Firearm Safety Device Tax Credit and its eligibility requirements
• Va. Code § 58.1-202 -- the Tax Commissioner's general authority to supervise administration of Virginia's tax laws, under which these guidelines are issued
• Va. Code §§ 58.1-105, 58.1-1835, 58.1-1845 -- erroneous-written-advice penalty/interest waiver if a court later disagrees with these guidelines
• 18 U.S.C. § 923 -- federal firearms dealer licensing requirement referenced by the credit's dealer requirement
• 18 U.S.C. § 921(a)(34) -- federal definition of a qualifying firearm locking device, incorporated into the credit's storage-device requirement

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 23-125

Original ruling text

Firearm Safety Device Tax Credit Guidelines

During the 2023 Session, the Virginia General Assembly enacted House Bill 2387 (2023 Acts of Assembly , Chapter 220), which established the Firearm Safety Device Tax Credit. This is an individual income tax credit for taxpayers who purchase one or more locking devices for the storage of a firearm from a dealer that is federally licensed pursuant to 18 U.S.C. § 923.

These guidelines are published by the Department of Taxation (“the Department”) to provide guidance to taxpayers regarding the Firearm Safety Device Tax Credit. These guidelines are not rules or regulations subject to the provisions of the Administrative Process Act ( Va. Code § 2.2-4000 et seq.) and are being published in accordance with the requirement that the Tax Commissioner develop guidelines pursuant to Va. Code § 58.1-339.14 D, as well as the Tax Commissioner’s general authority to supervise the administration of the tax laws of the Commonwealth pursuant to Va. Code § 58.1-202. As necessary, additional information will be published and posted on the Department’s website, www.tax.virginia.gov .

These guidelines represent the Department’s interpretation of the relevant laws. They do not constitute formal rulemaking and hence do not have the force and effect of law or regulation. In the event that the final determination of any court holds that any provision of these guidelines is contrary to law, taxpayers who follow these guidelines will be treated as relying on erroneous written advice for purposes of waiving penalty and interest under Va. Code §§ 58.1-105, 58.1-1835, and 58.1-1845. To the extent there is a question regarding the application of these guidelines, taxpayers are encouraged to write to the Department and seek a written response to their question.

General Overview

Effective for Taxable Year 2023, Virginia allows a nonrefundable individual income tax credit referred to as the Firearm Safety Device Tax Credit. Such credit is available for the purchase of one or more locking devices for the storage of a firearm from a federal licensed dealer during the taxable year. For the purposes of this credit, a firearm is any handgun, shotgun, rifle, or other firearm that will or is designed to or may readily be converted to expel single or multiple projectiles by action of an explosion of a combustible material. The maximum credit that can be applied for by any one taxpayer for a taxable year is $300. The credit is allowed only to the extent that the total amount of credits granted for a year does not exceed the annual $5 million credit cap. Credits will be allocated by the Department on a first-come, first-served basis.

Eligibility Requirements

To be eligible, the taxpayer:

• Must purchase one or more locking devices for the storage of a firearm, and

• Must purchase the device from a dealer that is federal licensed pursuant to 18 U.S.C. § 923.

These requirements are further described below.

Locking Storage Requirement

To be eligible, the purchased device must be a safe, gun safe, gun case, lock box, or other device:

• That is designed to be or can be used to store a firearm (“storage device”), and

• That is designed to be unlocked only by means of a key, a combination, or other similar means (“locking mechanism”).

Because this is restricted to storage devices, non-storage devices—such as trigger locks and cable locks—do not qualify. In addition, the storage device must reasonably limit access and not be easily cut, ripped, or opened. For example, if one only needs a pair of scissors or a ladder for access, the device will not meet the locking storage requirement. For this reason, bags, racks, gun socks, or mounts do not qualify.

Because this is restricted to storage devices with a locking mechanism, an unlocked storage device will generally not qualify. However, a taxpayer will not be ineligible if the device meets the definition above except for the fact that it does not come with a lock but instead is designed to be used with a lock that the taxpayer acquires separately, provided that the taxpayer buys a separate, compatible lock in the same transaction that the storage device is bought. In that case, the taxpayer can claim a credit for both the device and the lock, up to the $300 maximum amount.

Because the locking storage requirement set forth in Va. Code § 58.1-339.14 is identical to the requirements of subparagraph C of 18 U.S.C. 921(a)(34), the device must meet the requirements of subparagraph C, as interpreted by the Department of Justice (“DOJ”) and The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), to qualify for this tax credit. Zip ties, rope, and string do not qualify under 18 U.S.C. 921(a)(34)—including subparagraph C—according to the ATF, and consequently, they do not qualify for this credit. This can be found at www.atf.gov .

Federally Licensed Dealer Requirement

To be eligible for this tax credit, a taxpayer must purchase a device meeting the locking storage requirement above from a dealer that is federally licensed pursuant to 18 U.S.C. § 923. The ATF maintains a list of federally licensed dealers. For additional information including such list, please visit the ATF’s website, www.atf.gov . If a taxpayer anticipates making a purchase from a company with multiple stores, please ensure that the store at which the purchase is made is a federally licensed dealer.

Amount of the Tax Credit

The Firearm Safety Device Credit is equal to the cost of the device meeting the eligibility requirements above or $300, whichever amount is less. The cost of the device includes both:

• The purchase price of such devices and

• Any sales tax paid for the purchase of such devices.

A tax credit is not allowed for purchases of any other property. A tax credit is also not allowed for shipping charges, handling fees, or any other charge or fee, even if such charge or fee is associated with a purchase meeting the eligibility requirements above.

In addition, if the taxpayer buys a firearm in the same transaction that they buy the firearm safety device, the device will be ineligible for the credit. In such cases, the taxpayers should ensure that they buy the firearm in a separate transaction from the firearm safety device.

Administration of the Tax Credit

To receive the Firearm Safety Device Tax Credit, taxpayers must apply to the Department prior to claiming the credit on their income tax returns. Taxpayers can submit their application online. Please see the Department’s website ( www.tax.virginia.gov ) for more information. If a taxpayer does not wish to submit their application online, they may complete Form FSD, which is available to download from the Department’s website ( www.tax.virginia.gov ). The Department is only allowed to allocate one Firearm Safety Tax Credit per taxpayer per taxable year. As a result, taxpayers may only submit one application per taxable year.

The maximum amount of Firearm Safety Device Credits for all qualifying taxpayers is limited to $5 million for each taxable year. Credits must be allocated by the Department on a first-come, first-served basis based upon when the taxpayer’s application is filed. This means that, until the $5 million is depleted for the taxable year, the Department will continue to allocate credits.

The amount of the credit claimed may not exceed the taxpayer’s individual income tax liability for the taxable year. If the amount of the credit exceeds one’s tax liability, the taxpayer may carryover the amount for credit against their individual income taxes for up to five years. Spouses who file a joint Virginia individual income tax return may both claim the credit, but each spouse must submit their own application where he or she is limited to applying for a maximum of $300 of tax credit.

Example 1:

Taxpayer A and Taxpayer B are a married couple planning to file their returns jointly for the taxable year. Taxpayer A purchases a gun safe for $320 and Taxpayer B purchases a gun safe for $400. They both submit separate applications for the Firearm Safety Device Credit for the taxable year. Their purchases meet all the eligibility requirements explained above. Because the $5 million cap has not been met yet, the Department is able to allocate Taxpayer A a $300 tax credit and Taxpayer B a $300 tax credit. On their jointly filed return, Taxpayer A and B may claim a combined total of $600 in Firearm Safety Device Tax Credits.

Example 2:

Same as above, but only Taxpayer A purchases a gun safe for $500 and Taxpayer B does not buy any devices. Consequently, Taxpayer A submits an application for the Firearm Safety Device Credit for the taxable year. Her purchase meets all the eligibility requirements explained above. Because the $5 million cap has not been met yet, the Department is able to allocate Taxpayer A a $300 tax credit. On their jointly filed return, Taxpayer A and B may claim a Firearm Safety Device Tax Credit equal to $300.

Example 3:

Taxpayer A purchases a gun safe for $500 and submits an application for the Firearm Safety Device Credit for the taxable year. Her purchase meets all the eligibility requirements explained above. The $5 million cap has not been met yet. She only has $200 in tax liability. The Department is able to allocate Taxpayer A a $300 tax credit, $200 of which Taxpayer A may put towards her tax liability. Taxpayer A carries over the remaining $100 to the next taxable year when she has sufficient tax liability to fully utilize the credit.

Additional Information

These guidelines are available online in the Laws, Rules & Decisions section of the Department’s website, located at www.tax.virginia.gov . For additional information, please contact the Department at (804) 786-2992.

Approved:

Craig M. Burns

Tax Commissioner