Recycling and Pollution Control Tax Incentive Programs

Recycling Tax Credit

 A. Tax Credit

A state income tax credit is available to  “C” Corporations and Individuals for the purchase of machinery and equipment for processing recyclable materials.  Individuals and “Pass-through” Corporations are entitled to claim the tax credit for machinery and equipment purchased on or after January 1, 1999.  An income tax  credit may be claimed for machinery and equipment used predominantly in or on the premises of manufacturing facilites or plant units which manufacture, process, compound or produce items of tangible personal property from recyclable materials within the Commonwealth for sale. The current statute (§ 58.1-439.7 of the Code of Virginia) has a sunset date of January 1, 2020.  For more information on the recycling tax credit, review the Code of Virginia section that details the tax credit. 

The credit is equal to 20 percent of the original total capitalized cost of the purchase price for machinery and equipment for processing recyclable materials, and the total credit allowed cannot exceed 40 percent of the Virginia income tax liability in any taxable year.  The unused amount of the credit can be carried over for next 10 years.  Before the corporation or individual is entitled to the tax credit, the Department of Environmental Quality (DEQ) shall certify that such machinery and equipment are integral to the recycling process.  Obtaining the tax credit is a three step process:  1.) Submit DEQ Form 50-11S with supporting documents to the DEQ before March 1 for equipment purchased in previous calendar year; 2.) the DEQ certifies the equipment, and 3.) submit the DEQ certification with the Virginia state tax return by Taxation deadline May 1st or as applicable.  Also, please visit Taxation website for more details at: http://www.tax.virginia.gov/content/tax-credits. Per Taxation, to  apply for the tax credit, all eligible applicants who have received written certification from DEQ must file Form RMC with Virginia Tax on or before June 1.

 

Sales and Use Tax Exemptions for Pollution Prevention Equipment

Manufacturers and other commercial enterprises receive exemptions from state sales and use taxes for the purchase of pollution control equipment certified by the agency requiring the equipment as a permit condition. Applicability of this exemption to a specific project can be determined during project planning when preliminary discussions are held between the permit applicant and the pollution control agency. Please contact the DEQ regional office where the facility is located.

Local Real Estate and Personal Property Tax Exemptions for Recycling Equipment

Local governments in Virginia have the option of exempting or partially recycling facilities and equipment from property tax. For more information on the recycling equipment certification process, visit the DEQ Land Protection and Revitalization Forms page or contact: Sanjay V. Thirunagari .   For more information on the tax exemption for certified recycling equipment, review the Code of Virginia, § 58.1-3661.

Local Real Estate and Personal Property Tax Exemptions for Pollution Control Equipment

Manufacturers and other commercial enterprises may receive exemptions from personal property taxes for the purchase of pollution control equipment certified by the agency requiring the equipment as a permit condition. Certified pollution control equipment and facilities shall mean any property, including real or personal property, equipment, facilities, or devices, used primarily for the purpose of abating or preventing pollution of the atmosphere or waters of the Commonwealth and which the state certifying authority having jurisdiction with respect to such property has certified to the Department of Taxation as having been constructed, reconstructed, erected, or acquired in conformity with the state program or requirements for abatement or control of water or atmospheric pollution or contamination. Applicability of this exemption to a specific project can be determined during project planning when preliminary discussions are held between the permit applicant and the pollution control agency.  Please contact the DEQ regional office where the facility is located.

For more information on the potential tax exemption for the pollution control and/or recycling equipment, review the Code of Virginia, § 58.1-3660.

 

Virginia's Tax Credit for Investing in Equipment to Burn Waste Motor Oil

Beginning January 1, 1999, a state income tax credit is available to taxpayers who operate a business facility within the Commonwealth which accepts waste motor oil from the public. The credit is equal to 50 percent of the purchase price paid for equipment used exclusively for burning waste motor oil at the business facility. The total credit allowed to any taxpayer shall not exceed $5,000 and any credit shall be used only for the taxable year in which the purchase price of the waste oil burning equipment was paid. Before the taxpayer is entitled to the tax credit, the Department of Environmental Quality shall certify that such equipment is used to burn waste motor oil at a business facility within the Commonwealth, and the business facility accepts waste motor oil from the public. Use Form DEQ 50-12 (Forms are available online). For certification of applicable equipment, contact: Forrest Prymak.at (804)698-4434  For more information on the waste motor oil tax credit, review the Code of Virginia section that details the tax credit.

For more information on tax credit for waste oil heaters/burners, review the Code of Virginia, § 58.1-439.10. Please visit Taxation website for more details. 

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Virginia Department of
Environmental Quality
P.O. Box 1105
Richmond, VA 23218
(804) 698-4000


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