Businesses - Enterprise Zone Tax and License Incentives
The Code of Chesterfield County was amended, effective January 1, 2007, relating to business tax incentives for enterprise zones in Chesterfield. These changes (1) amended rules for existing machinery and tools tax incentives within the enterprise zones, (2) created new sub-zones in other areas, and (3) added a rebate incentive for business tangible personal property tax for certain new businesses within the new sub-zones (only).
Enterprise Zone Program Overview
Chesterfield County has two enterprise zones and three sub-zones. The two enterprise zones are both located along the Route 1/301 corridor. The three separate sub-zones are located elsewhere: one each along the Eastern areas of Hull Street Rd. and Midlothian Tnpk., and the third in the Meadowbrook area. For specific boundaries, see the Enterprise Zone Locations Map provided by the Department of Economic Development.
In coordination with that department and the treasurer's office, the office of the commissioner of the revenue administers tax incentives for business licenses and personal property taxes (especially machinery and tools taxes).
New licensable businesses in, or businesses relocating into, the enterprise zones or sub-zones may qualify for
- a free or reduced business license tax for up to five (5) years, and/or
- a rebate on qualifying machinery and tools (“M&T”) taxes paid over five (5) years.
An existing business within the zone may qualify for
- a partial rebate on qualifying M&T taxes paid on property resulting from a qualifying expansion or renovation
- a free or reduced business license tax for up to five (5) years (but only when building and occupying a completely new building)
Qualifying businesses locating into a sub-zone (only) may apply for
- a one-time rebate of business tangible personal property (“BPP”) tax paid for the first full year of operation, up to a maximum of $100,000.
Chesterfield County’s enterprise zone program as a whole is administered by the Department of Economic Development, and offers these and other incentives to businesses locating and/or expanding or renovating within an enterprise zone or sub-zone.
Who qualifies for a rebate on M&T or BPP taxes?
M&T tax rebates:
- A full (100%) rebate of M&T taxes paid is available for a five-year period, for new or relocating manufacturers or processors who locate in an enterprise zone or sub-zone after January 1, 2006.
- A partial rebate of M&T taxes paid is available for an existing manufacturer or processor within the zone or sub-zone who undergoes an expansion or renovation which results in an increase of 15% or $50,000, whichever is greater, in the assessed value of its M&T over that of the previous year.
BPP tax rebates:
- A business must make a capital investment of at least $3,000,000 within a sub-zone (only) to qualify for the BPP tax rebate.
I think I may qualify. What is the first step?
Contact Chesterfield County Department of Economic Development within one year of locating to an enterprise zone or sub-zone.
Then what?
If the business qualifies for a business license reduction, it will still be required to file for a business license with the commissioner of the revenue, but the license will be either free or at a reduced cost.
In the case of a rebate on M&T or BPP taxes, the business must first file and pay the taxes assessed on this equipment, then request (in writing) a rebate with the commissioner of the revenue. The Chesterfield County treasurer's office will issue the rebate.
I have been in an enterprise zone for a long time, but never accessed this benefit. What about me?
You may qualify for
- a partial rebate on qualifying M&T taxes paid on property resulting from a qualifying expansion or renovation, or
- a free or reduced business license tax for up to five (5) years (but only when building and occupying a completely new building).
Other incentives are limited to new businesses and businesses relocating into the enterprise zone or sub-zone.
To qualify for the M&T rebate, the taxpayer must undergo a qualifying expansion or renovation (which results in an increase of its M&T assessed value of 15% or $50,000, whichever is greater), and it must apply for and access the benefit within one year of the expansion or renovation.
I have been in an enterprise zone for some time and have been paying taxes annually and receiving an annual rebate. Is there a change for me?
If you have been in an enterprise zone and have been accessing your rebates previously, the current ordinance, effective January 1, 2007, states that you must file the annual Return of Machinery and Tools, along with a detailed list of assets with the commissioner of the revenue. The business must pay the resulting machinery and tools tax and then submit a written request for rebate to this office within 90 days of payment. If you meet this requirement, you will continue to receive your rebates on the qualifying machinery and tools that are tracked annually, until 2011.
If you happen to have a qualifying expansion, you will be eligible for a separate rebate on that portion of the tax paid under the new ordinance, as well.
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