For taxable years beginning on or after July 1, 2012, but before July 1, 2014, retail companies are required to determine their Virginia taxable income by using an apportionment formula with a triple-weighted sales factor. For taxable years beginning on or after July 1, 2014, but before July 1, 2015, a quadruple-weighted sales factor must be used. A single sales factor apportionment formula will apply for taxable years beginning on and after July 1, 2015. 

For taxable years beginning on or after Jan. 1, 2014, Interest Charged-Domestic International Sales Corporations (IC-DISCs) are exempt from the Virginia Corporation Income Tax. Under prior law, IC-DISCs weren't exempt from taxation in Virginia, and were required to file and pay Virginia corporate income taxes even when exempt from federal taxation.

• A new Schedule VAC was created to allow taxpayers to contribute all or part of their income tax refunds to one or more of their Virginia529SM accounts. Virginia529SM is a college savings plan that offers tax-advantaged savings for qualified higher education expenses. Programs include Virginia529 prePAIDSM, Virginia529 inVESTSM, CollegeAmerica®, and CollegeWealth®. Other Voluntary Contributions, which were previously reported on the Schedule ADJ, have been moved to the Schedule VAC. 
• The field for political contribution credit has been moved from the Schedule CR to the tax return.
• Did you purchase merchandise by Internet, telephone or mail, or outside Virginia without being charged sales tax? If so, you may owe Consumer's Use Tax on those purchases. Use the new Consumer's Use Tax line in the return to report any amount you may owe.

Did you receive a refund from a return claiming itemized deductions filed in 2014? Or were you paid refund interest on a Virginia income tax refund issued during 2014? If so, you can access your Form 1099G/1099INT by visiting our webpage. 

Beginning with taxable year 2014, Virginia allows a subtraction for gains from home buyer savings accounts that were taxed for federal purposes. An individual may designate one or more accounts at a financial institution as a first-time home buyer savings account. Distributions from an account must be used for the sole purpose of paying or reimbursing the down payment and allowable closing costs for the purchase of a single-family residence in Virginia by a qualified beneficiary. 

More information on subtraction and addition requirements related to home buyer savings accounts is available in your form instructions. 

Educational Improvement Scholarships Tax Credit: For taxable years beginning on or after Jan. 1, 2014, an income tax credit may be claimed for monetary or marketable securities donations made to scholarship foundations included on an approved list published by the Virginia Department of Education. The credit is equal to 65 percent of the monetary or marketable securities donation made to the scholarship foundation. Tax credits will be awarded to taxpayers on a first-come, first-served basis in accordance with procedures established by the Virginia Department of Education.

Taxpayers can claim credits earned during both 2013 and 2014 on the 2014 tax return. In the following years, taxpayers will only be able to claim the credit for the current year. For more information about this credit, see Tax Department's 2013 Legislative Summary.

Research & Development Expenses Tax Credit: Effective for taxable years beginning on or after Jan. 1, 2014, the tax credit amounts are increased to 15 percent of the first $234,000 in Virginia qualified research and development expenses, or 20 percent of the first $234,000 of Virginia qualified research and development expenses if the research was conducted in conjunction with a Virginia public or private college or university, to the extent the expenses exceed a base amount.  Pass-through entities now have the election to claim the credit at entity level, rather than allocating the credit to the entity owners. Effective for fiscal years beginning on or after July 1, 2014, the annual cap has been increased to $6 million. Additionally, the credit sunset date was extended to Dec. 31, 2018.