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.

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.