Virginia Enterprise Zone
The Virginia Enterprise Zone Program was established by the General Assembly in 1982 to stimulate local economic growth and neighborhood revitalization. To achieve this, the state offers various tax saving incentives to businesses to encourage business expansion and development in specially targeted areas throughout the state.
The Enterprise Zone was established in Narrows on January 1, 1994, by town ordinance, and carries over through December 31, 2013. The Enterprise Zone contains 188.58 acres and encompasses the Narrows Central Business District, including Monroe and Main Streets and the recently added Commercial and Industrial Zone lying along US Route 460.
The Town of Narrows is eager to assist new and existing businesses interested in participating in this economic development project.
State Incentives
GENERAL TAX CREDIT
Currently under the Enterprise Zone Program, the state offers tax credit incentives to businesses that choose to locate in the enterprise zone. In order to qualify, an existing business must increase its employment b 10% over a base taxable year and at least 40% of the increase in permanent, full-time employees must be either, low income or zone residences. Only full-time permanent positions are eligible. Guidelines for new businesses are the same as an existing business with the exception that the establishment of a new business cannot result in a net loss of employment from another location.
General tax credits of up to 80% of the businesses tax liability in the first year and up to 60% in years two through ten.
REAL PROPERTY IMPROVEMENT TAX CREDIT
Qualified zone residents are eligible to receive tax credits equal to an amount of up to 30% of qualified zone improvements with a maximum amount not to exceed $125,000 within a five year period. Projects that involve rehabilitation must cost at least $50,000 and be equal to the assessed value of the real property prior to the improvements being made. In order to qualify for tax credits, new construction projects must cost at least $250,000, while rehabilitation projects must cost at least $50,000 and be equivalent to the assessed value of the subject property.
INVESTMENT TAX CREDIT
Qualified zone businesses that make qualified zone investments in excess of $100 million and create 200 jobs are eligible for a credit in an amount of up to 5% of the qualified zone investments in lieu of the real property improvements tax credit. Any unused tax credit for the taxable year may be carried over until the full amount of the credit has been used.
The actual percentage amount of the credit will be determined by negotiation with the Department of Housing and Community Development (DHCD) located in Richmond.
Local Incentives
REDUCED UTILITY FEES for new businesses located within Enterprise Zone; businesses creating 10 or more jobs receive 50% fee reduction over 5 years; 5-10 jobs, 25% over 5 years; and 1-5 jobs, 15% over 5 years.
BPOL TAX RATE REDUCTION for new businesses locating within Enterprise Zone. Years 1-5 receive 66.7% reduction, while years 6-10 receive 33.3% reduction;
WAIVER OF PERMIT BUILDING FEES for all commercial and industrial businesses within Enterprise Zone;
REAL ESTATE TAX EXEMPTION CREDITS for rehabilitated commercial and residential real estate over 25 years old, where years 1-5 receive credits equivalent to 100% of increased value; where years 6-10 receive 50% of increased value;
WAIVER OF ALL UTILITY CONNECTION AND HOOK-ON FEES for new businesses and industries locating within Enterprise Zone;
$500 FACADE GRANTS to businesses to improve building facades and other outside improvements based on a dollar to dollar match, provided improvements are in accordance with Narrows Community Design Guidelines;
PROVISION OF NARROWS COMMUNITY DESIGN GUIDELINES and guidance on their implementation;
PROVISION OF $1000/YR. CERTIFIED PUBLIC ACCOUNT POOL on a dollar to dollar match basis, where 5 or more businesses participate per year, CPA to assist businesses in qualifying for Virginia Enterprise Zone tax incentives;
CREATION OF A BANK LOAN POOL for business start-up and expansion within Enterprise Zone where loan interest will be "bought down" by one percentage point by town funds, $2000/yr. cap on Town Funds.
