Virginia will now join 38 other states that offer research and development tax credits as part of their economic development strategies thanks to legislation sponsored by Senator Mark Herring, D-Loudoun, and Delegate Ben Cline, R-Rockbridge. SB 1326 and HB 1447 establish a $5 million research and development tax credit fund under which qualifying firms would be eligible for a refundable credit. The tax credit amounts are 15 percent of the first $167,000 or 20 percent of the first $175,000 of Virginia qualified research and development expenses, as long as the research was conducted in conjunction with a public college or university in Virginia.
The research and development tax credit will encourage the private sector to increase its investment in research and innovation, which in turn, will promote job creation throughout the Commonwealth, while simultaneously boosting industry-sponsored research at Virginia colleges and universities. It will provide the Commonwealth with an important tool to incentivize advanced technology firms to locate, invest, and grow in Virginia.
The legislation was the top priority of both the Northern Virginia Technology Council and the Virginia Biotechnology Association. It was also included among Governor Bob McDonnell’s “Opportunity at Work” legislative proposals.
“This legislation will build on the great strides we have made in recent years to make Virginia more competitive with our neighbors and more attractive to technology industry. States all across the country have found that innovation is a huge driver of economic growth. Our Commonwealth, and Northern Virginia in particular, is perfectly suited for the kinds of high-paying, high growth potential jobs that science and technology industry brings with it,” said Senator Herring.