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Instructions for 2022 Schedule 500AP
Modified Apportionment Schedule for VEDP-Certified Companies
General Information but before January 1, 2025, and any improvements to real
property in a qualified locality or qualified localities on or
For taxable years beginning on or after January 1, 2018, after January 1, 2018, but before January 1, 2025.
but before January 1, 2025, certified companies conducting
New Job – a permanent, full-time position of indefinite
business in certain disadvantaged localities may elect to
duration that pays at least 150 percent of the minimum wage,
apportion Virginia income using modified apportionment
as defined in the Virginia Minimum Wage Act (§ 40.1-28.8
factors. To be eligible, the company must not have any
et seq.), and that requires a minimum of (i) 35 hours of an
existing property and payroll in Virginia as of January 1, 2018,
employee’s time a week for the entire normal year of the
and must be certified by the Virginia Economic Development
eligible company’s operations, which normal year shall
Partnership Authority (“VEDP”) as meeting the following
consist of at least 48 weeks, or (ii) 1,680 hours per year.
qualifications before January 1, 2025:
Traded Sector Company – a company that directly or
(1) either spend at least $5 million on a new capital
indirectly derives more than 50 percent of its revenue from
investment in a qualified locality or localities; or create
out-of-state sources.
at least 50 new jobs in a qualified locality or qualified
localities (see list of qualified localities on Page 4); Certification Overview
(2) is a traded-sector company; and Prior to using certified company apportionment on the Virginia
(3) generates a positive fiscal impact. income tax return, companies must be certified by VEDP
and must be recertified annually. To become certified,
A certified company may use the modification on the Virginia VEDP will determine whether a company will generate a
income tax return for the taxable year in which it becomes positive fiscal impact based on the following factors:
eligible and for the 6 subsequent, consecutive taxable years.
However, an eligible company may not use the modification (1) job creation;
for any year in which (i) the total, cumulative new capital (2) private capital investment; and
investment falls below the applicable initial threshold or (3) anticipated additional state and local tax revenue.
(ii) the number of new jobs falls below the applicable initial
threshold. VEDP will also consider the additional revenue Virginia likely
would expend in and for the localities if the economy in the
Modified Apportionment Factors localities continues to erode.
Certified companies may elect to modify the application of its A company will be denied certification if VEDP determines
Virginia apportionment method according to the provisions it has engaged in a merger, acquisition, similar business
of Va. Code §§ 58.1-407 through 58.1-420, 58.1-422, 58.1- combination, name change, change in business form, or
422.1, or 58.1-422.2. This includes companies transacting other transaction if the primary purpose is to obtain status as
or conducting business entirely within Virginia as well as an eligible company.
companies operating within and without of Virginia.
For details on the certification process, contact:
If the entire business of a qualified company is transacted or
conducted in Virginia, it may elect to (i) apportion its income Virginia Economic Development Partnership
between qualified localities and other localities in Virginia One James Center, Suite 900
provided that it does not apportion any of its income to a 901 East Cary Street
state other than Virginia and (ii) use any modification for Richmond, VA 23219
which it may be eligible as provided in Va. Code §§ 58.1-407 Phone: (804) 545-5706
through 58.1-420, 58.1-422, 58.1-422.1, or 58.1-422.2.
In general, certified companies may decrease the amount of Instructions
income apportioned to and taxed by Virginia. This decrease
Part I – Single Factor Apportionment
in income is accomplished by allowing certified companies
the ability to subtract the amount reported in the numerator Companies that are required to use a single factor
of each of their apportionment ratio(s). The computation apportionment method must complete the applicable line in
depends upon whether the companies are subject to Part I and then transfer the amount in Column C as follows:
Virginia’s standard apportionment method or a specialized • Corporations: Schedule 500A, Section B, Line 1,
apportionment method, and is described later in these Column B.
instructions.
• Consolidated/Combined Filers: Schedule 500AC,
Definitions Section C, Line 1, Column B.
New capital investment – real property acquired in a qualified • Pass-Through Entities: Schedule 502A, Section B,
locality or qualified localities on or after January 1, 2018, Line 1, Column B.
Va. Dept. of Taxation 2601123 Rev. 09/22 Page 1
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