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Ezel / Tax Rulings / VA
VA P.D. 13-75 General Provisions 2013-05-22

What annual caps applied to Virginia's Qualified Equity and Subordinated Debt Investments Tax Credit in 2013 and 2014?

Short answer: The annual cap was $4.5 million for taxable year 2013 and $5 million for 2014. The statute generally capped the credit at $5 million, but budget actions had imposed lower limits in several years. Tax Bulletin 13-7 said the $5 million statutory cap would continue after 2014 unless the General Assembly acted again.

Apply this to your situation

This page answers the general question as of 2013. Ezel answers yours, under current Virginia tax law, with citations.

Currency note: this ruling is from 2013
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 13-7, general historical guidance announcing statewide annual caps for the Qualified Equity and Subordinated Debt Investments Tax Credit. It is not a taxpayer-specific ruling and does not determine whether a particular investment or investor qualifies. Caps, application procedures, and the credit itself may have changed since publication; confirm the rules for the taxable year at issue. 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)

Plain-English summary

Virginia capped the Qualified Equity and Subordinated Debt Investments Tax Credit at $4.5 million for taxable year 2013 and $5 million for 2014. Va. Code § 58.1-339.4 E set a general $5 million annual cap, but state budget actions had reduced the available pool in certain years.

The bulletin's historical table listed a $3 million cap for 2005-2009, $5 million for 2010, $3 million for 2011, and $4 million for 2012. The amended 2012-2014 budget then increased the cap to $4.5 million in 2013 and restored the statutory $5 million amount in 2014.

The Department said $5 million would remain the cap after 2014 unless the General Assembly changed it again.

What this means for you

  • The aggregate 2013 credit pool was $4.5 million.
  • The 2014 pool returned to the $5 million statutory cap.
  • An annual cap limits the statewide credit allocation; it does not establish that an individual investment qualifies.
  • This is historical guidance, so check later budget and statutory changes.

Common questions

Q: What was the 2012 cap?
A: $4 million.

Q: What was the 2013 cap?
A: $4.5 million.

Q: What was the 2014 cap?
A: $5 million.

Citations and references

  • Va. Code § 58.1-339.4 E.
  • House Bill 1500, 2013 Va. Acts ch. 806.

Subject

Annual Cap for the Qualified Equity and Subordinated Debt Investments Tax Credit

Source

Original ruling text

TAX BULLETIN 13-7

Virginia Department of Taxation

MAY 22, 2013

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 1500, Chapter 806 of the 2013 Acts of Assembly) includes provisions that limit the annual cap for the Qualified Equity and Subordinated Debt Investments Tax Credit. This notice is intended to provide 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 2012, the tax credit cap was limited to $4 million. Under the budget bill for the 2012-2014 biennium (2013 House Bill 1500), the tax credit limit will increase to $4.5 million for Taxable Year 2013 and to $5 million for Taxable Year 2014. For taxable years after 2014, the tax credit limit 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

14-75

14-5

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