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PHONE:  (540) 375-3007|HOURS:  M-F 8am-5pm |E-MAIL:  econdev@salemva.gov
LOCATION: City Hall, 114 North Broad Street, Salem, VA 24153

Incentive Programs

PHONE:  (540) 375-3007|HOURS:  M-F 8am-5pm |E-MAIL:  econdev@salemva.gov
LOCATION: City Hall, 114 North Broad Street, Salem, VA 24153

Incentive Assistance

ASSISTANCE FROM THE CITY  

We do not have a standard set of incentives for projects because each project is different. Given that, we structure our incentives based on the project that is before us. Typically, the City Manager will meet with the executives of the business seeking to locate in Salem to find out what types of incentives are being sought. That information is then shared with members of City Council at which time we evaluate what is feasible.

However, a new business can expect to receive assistance with:

  • Permitting and fees, which can amount to thousands of dollars.
  • The expansion of water and sewer lines.
  • Upgrades to electric service needed for business production.
  • Utility connection fees.
  • Street upgrades.

In addition to financial incentives, city staff is willing to provide technical assistance with building and site issues that can result in costs savings during construction.

FAÇADE GRANT

The Façade Improvement Program provides grants of up to $5,000 financial assistance to assist small businesses and property owners in the downtown area of Salem with building facade and other general property improvements undertaken in accordance with established design guidelines.  The Façade Improvement Program is a matching grant fund. Property owners or business accepted into the program are required to match dollar for dollar (50%) of all funding received for façade improvements. There are several objectives for this incentive, which include but are not limited to:

  • Stimulating the redevelopment of Downtown Salem adding to both the employment base and activity level;
  • Bringing about the recycling and environmental upgrading of presently vacant or under-utilized and buildings;
  • Assisting in financing and financial packaging of public and private downtown revitalization efforts;
  • Assisting in the preservation or restoration of the historic visual character of older buildings in downtown Salem;
  • Encouraging the retention of existing or the recruitment of new commercial tenants in participating buildings.

To apply contact the Economic Development office at 375-3007.

 

TAX INCENTIVES

HISTORIC TAX CREDIT

The preservation of historic buildings benefits communities and connects us to our heritage, enriching the quality of our lives in many tangible and intangible ways. Their preservation also provides demonstrable economic benefits.

Through the federal and state rehabilitation tax credit programs, property owners are given substantial incentives for private investment in preservation, resulting in enormous advantages to the public.

Both the federal and state tax credit programs are administered in Virginia through the Department of Historic Resources.

For additional information please visit https://www.dhr.virginia.gov/tax_credits/tax_credit.htm

RECYCLABLE MATERIALS PROCESSING EQUIPMENT TAX CREDIT

This credit has been extended until Dec. 31, 2019.

A Virginia resident or manufacturing business entity may claim an income tax credit for purchases of equipment that can produce tangible personal property items from recyclable materials. The manufacturing facility must be located within Virginia, and must be engaged in the manufacturing, production, processing, or compounding of tangible personal property for sale. The recycling machinery or equipment must be used predominantly in or on the premises of manufacturing facilities or plant units which manufacture, process, compound, or produce items of tangible personal property from recyclable materials, within the Commonwealth.

For more information please visit https://www.tax.virginia.gov

MAJOR BUSINESS FACILITY JOB CREDIT

Companies engaged in any business in Virginia, except for retail trade business, may claim a Virginia Jobs Tax Credit if the taxpayer creates new full-time jobs in excess of the threshold amounts established for 1 of the 2 credit tiers. A qualified major business facility may spread the credit allowed per qualified full-time employee over 2 taxable years. The thresholds for the 2 credit tiers are:

  • Tier 1: The qualifying threshold amount is 100 new jobs for the establishment or expansion of a major business facility in Virginia. Note: For taxpayers whose expansion year began on or after Jan. 1, 2010, the threshold has been reduced to 50 new jobs.
  • Tier 2: The qualifying threshold amount is 50 new jobs for the establishment or expansion of a major business facility in a locality identified by the Virginia Economic Development Partnership as an economically distressed area or has been designated as an Enterprise Zone. Note: For taxpayers whose expansion year began on or after Jan. 1, 2010, the threshold has been reduced to 25 new jobs.

Taxpayers can qualify for and claim a credit for only 1 tier per facility. Credits are subject to recapture if employment decreases during the 5 years following the credit year.

The credit year is defined as the first taxable year following the taxable year in which the major business facility was established or expanded. The credit is earned in 1/3 increments over 3 taxable years beginning with the credit year. Note: For taxable years beginning on or after Jan. 1, 2009, the credit can be earned in 1/2 increments over a 2-year period. The allowable credit may not exceed your tax liability. Unused credits may be carried forward for 10 years. Credits will be recaptured proportionately if employment decreases during the 5 years following the initial credit year.

The credit allows a qualifying business to receive both an Enterprise Zone grant and a Major Business Facility Tax Credit. The grant and tax credit can't be earned/claimed for the same job.

The taxpayer can't claim the Major Business Facility Job Tax Credit and the Coalfield Employment Enhancement Tax Credit, the Clean Fuel Vehicle and Advanced Cellulosic Biofuels Job Credit or the Green Job Creation Tax Credit.

For more information please visit https://www.tax.virginia.gov

WORKER RETRAINING TAX CREDIT

This credit allows an employer to claim a tax credit for the training costs of providing eligible worker retraining to qualified employees for taxable years beginning on Jan. 1, 1999.

The credit may be applied against individual income tax, estate and trust tax, corporate income tax, bank franchise tax, and taxes imposed on insurance companies and utility companies.

Eligible worker retraining includes noncredit courses that are approved by the Virginia Economic Development Partnership. It also includes credit or non-credit retraining courses taken through an apprenticeship agreement approved by the Commissioner of Labor and Industry.

Generally, the credit is 30% of all classroom training costs but is limited to $200 annual credit per student if the course work is incurred at a private school or $300 per qualified employee with retraining in a STEM or STEAM discipline. We are authorized to issue up to $2,500,000 of retraining credits annually. If total requested credits exceed this amount, we will prorate the authorized credits.

Credits taken may not exceed your tax liability in any 1 taxable year. Unused credits may be carried forward for 3 years.

For more information please visit https://www.tax.virginia.gov

VEC WORK OPPORTUNITY TAX CREDIT

The Work Opportunity Tax Credit (WOTC) is a Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment. WOTC joins other workforce programs that incentivize workplace diversity and facilitate access to good jobs for American workers. The list includes:

•    Unemployed Veterans (including disabled veterans)
•    Temporary Assistance for Needy Families (TANF) Recipients
•    Long-Term Temporary Assistance for Needy Families (TANF) Recipient
•    Food Stamp (SNAP) Recipients
•    Designated Community Residents (living in Empowerment Zones or Rural Renewal Counties)
•    Vocational Rehabilitation Referred Individuals
•    Ex-Felons
•    Supplemental Security Income Recipients
•    Summer Youth Employees (living in Empowerment Zones)

The WOTC program’s legislative authority for all WOTC target groups expired on April 30, 2015 for all 2014 applications.  As a result, the program is currently undergoing an authorization lapse. The WOTC unit will adhere to the following procedure until there is further legislative action and guidance relating to the program:  The WOTC unit will accept and retain certification requests for employers’ new hires made on or after January 1, 2015. Eligibility certifications will NOT be issued, however, unless the program is reauthorized.
CONTACT:  Kathy Holcomb, 540-204-9660 or Katherine.Holcomb@vec.virginia.gov
http://www.vec.virginia.gov/