Incentives Available to Businesses in Chesterfield
A wide variety of incentive programs are available to companies locating or expanding in Chesterfield County.
Manufacturing and Tax Rate Incentives
Manufacturing companies can benefit from Chesterfield’s low machinery and tools (M&T) tax. Specifically, at an effective rate of 25 cents per $100 of assessed value, Chesterfield offers one of the lowest machinery and tools tax of any urban/suburban locality in Virginia. This provides significant savings in operating costs to manufacturers.
For example, a $20 million equipment investment would generate an annual M&T tax bill of $50,000 in Chesterfield County. Compared to taxes of $200,000 per year in similar jurisdictions, with the more common effective rate of $1.00/$100, Chesterfield’s low machinery and tools rate would mean an annual savings of $150,000.
In addition, there is no tax on intangible property (financial assets, trademarks, patents) and no tax on inventory.
Sales and Use Tax Exemptions
The Commonwealth of Virginia offers some of the broadest sales and use tax exemptions in the U.S. Major exemptions include:
- Computer equipment used in a data center for qualifying projects
- Manufacturers’ purchases used directly in production
- Items purchased for resale by distributors
- Utilities delivered through lines, pipes, or mains
- Purchases used for research and development
Other State Tax Incentives
Virginia offers stable, low-tax costs for companies, including the benefits of no franchise or net-worth tax, a modest sales tax with a broad range of exemptions, and a 6% corporate income tax rate, which has not changed since 1972.
Aiding the stable tax environment in Virginia is a toolbox of credits and exemptions that companies can claim on taxes ranging from the sales and use tax to the corporate income tax. Among the programs are the following:
- Barge and Rail Usage Tax Credit
Offers per-unit credit for “international trade facilities” that transport containers using barge or rail, rather than trucks or other motor vehicles on Virginia’s highways
- Commercial and Industrial Sales & Use Tax Exemption
Offers sales and use tax exemption for purchases used directly in production or research and development
- Data Center Retail Sales & Use Tax Exemption
Offers exemption for qualifying computer equipment or enabling software purchased or leased for use in certain data centers in the Commonwealth that meet minimum investment and job creation requirements
- Green Job Creation Tax Credit
Offers annual individual or corporate income tax credit for each new green job meeting minimum hours requirements in taxable years beginning before January 1, 2021
- International Trade Facility Tax Credit
Offers income tax credit for capital investment or job creation related to an international trade facility
- Major Business Facility Job Tax Credit
Offers $1,000 income tax credit for each new full-time job created over a jobs threshold for companies locating or expanding in Virginia
- Major R&D Expenses Tax Credit
Offers individual and corporate income tax credit for incurring more than $5 million of Virginia qualified research and development expenses in taxable years beginning on or after January 1, 2016
- Port Volume Increase Tax Credit
Offers corporate income tax credit for manufacturing, distribution, agriculture, and mineral and gas companies that increase usage cargo volume at Virginia’s port facilities
- Recyclable Materials Processing Equipment Tax Credit
Offers income tax credit to manufacturers for the purchase of certified machinery and equipment used for processing recyclable materials beginning before January 1, 2020
- Refundable R&D Expenses Tax Credit
Offers individual and corporate income tax credit for taxpayers with qualified research and development expenses in Virginia under $5 million per year
- Worker Retraining Tax Credit
Offers employer tax credit for eligible retraining costs of providing eligible worker retraining to qualified employees
Financial Incentives for Qualified Projects
For qualifying projects, Chesterfield County may be willing to consider financial incentives on a case-by-case basis. The value of these incentives will be dependent upon the total investment (land, building, equipment) and employment numbers estimated for the project, pending direct discussions with the prospective company.
When justified by the project scope, Chesterfield County will also pursue available funding assistance from the Commonwealth of Virginia to further assist the company in areas such as workforce training, land acquisition, construction of industrial roads, or railroad access.
Financing may be available through Chesterfield County Industrial Development Authority with tax-exempt Industrial Revenue Bonds (IRBs) for manufacturing facilities.
Virginia will assist in constructing roads to sites not currently served by roads through the Industrial Access Road Funds program. And the state will assist in constructing rail lines to sites not currently served by rail through the Industrial Rail Access Funds program.
The Commonwealth’s Development Opportunity Fund (COF) supports economic development projects that create new jobs and investment in accordance with established guidelines. Chesterfield may request a grant, to be paid to the company and matched by the county dollar for dollar.
The Business Expansion Incentive Fund (BEIF) was established for the purpose of securing job-creating economic development opportunities through the preservation and expansion of existing business in Chesterfield County. BEIF assistance may be in the form of a low-interest loan or a grant. Applications are made to the Chesterfield County Economic Development Department.
“Fast Track” Permitting Process
Chesterfield County can offer a “fast track” permitting process for both site and building plans review should a project need to be expedited. Our proven success with this process has been demonstrated with a number of development projects throughout Chesterfield.
Small Business Permit Process Guidance
Chesterfield Economic Development offers guidance to companies going through the permitting processes.Our Small Business Development Assistant will help identify which approvals are required for a particular project.
Technology Zone Program
Companies locating in a Technology Zone may be eligible for Chesterfield County incentives.
Recruitment & Training Incentives
Virginia offers financial assistance and training to companies that seek to attract and retain qualified employees in Chesterfield County.
The Virginia Jobs Investment Program (VJIP) provides services and funding to companies creating new jobs or experiencing technological change to reduce the human resource development costs for new companies, expanding companies, and companies retraining their employees.
Funding for each net new full-time job created or full-time employee retrained is based on a customized budget determined by an assessment of the company’s recruiting and training activities. Funding is reimbursable 90 days after the trainee is hired (for new jobs programs) or after the retraining activity has occurred (for retraining programs).