How Will the NVTC’s Virginia Income Tax Legislation Affect Me?

Tax Reform and Investments Can be Confusing

HB 2074 is the new tax law proposed and passed in the Commonwealth of Virginia. Virginia income tax laws can be confusing, and typically when a new tax reform comes out investors want to know how it will affect their assets or projected investments—as they cringe and brace for the impact of higher payments and less capital gains, but some reforms are really tax breaks that should encourage investing. As an investor in Northern Virginia, you know the market is hot and commercial real estate is a way to safely invest your money, as Northern Virginia only continues to grow and expand. Therefore, we are going to summarize the House Bill 2074, which affects Virginia venture capital account investments, and explain how HB 2074 will benefit you.

What is HB 2074?

HB 2074 is in your favor (if you qualify). It is an individual and corporate income tax subtraction concerning income from a Virginia venture capital account in the Commonwealth of Virginia. Simply stated: it is a tax break for investments made after January 1, 2018, but before December 31, 2023.

How is a ‘Virginia Venture Capital Account’ Defined?

A Virginia Venture Capital Account is defined as an, “investment fund that is certified by the Department of Taxation as investing at least 50 percent of its investments in qualified portfolio companies and employing at least one investor with at least four years’ experience in venture capital investment or substantially equivalent experience.”

What is a ‘Qualified Portfolio’ Mentioned in the Bill?

A qualified portfolio company is one whose location is within the Commonwealth of Virginia and the company’s primary purpose is production, sale, research or development of a product or service that provides equity in exchange for the investment.

What is the Main Purpose of HB 2074?

HB 2074 was created to encourage investment in the local economy and the growth of Northern Virginia, which through commercial real estate can be done. Investors can consider retail, business development, IT and beyond in the region and find success with the proximity to Washington D.C. and the ongoing need for overflow office space. If you are going to invest, you might as well invest where you can also obtain a tax break and make the most of your capital gains.

How to Begin?

You can begin today, with an agent at Coldwell Banker Commercial Elite, to start the search for your commercial real estate investment. January 2018 is closer than you think and you want to be prepared to take advantage when the HB 2074 becomes available! A qualified agent knows the region and aims to work with you so that you are able to find what best meets your needs and abilities as an investor!

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