April 1st is the deadline to file for a tax credit against 2015 individual or corporate income on “qualified capital expenditures” made in connection with establishing or improving a Virginia farm winery or vineyard. The credit is 25% of qualified capital expenditures, which include purchases of certain equipment, soils, plants, barrels, and other materials used in growing grapes or producing wine in the Commonwealth.
If you qualify for the credit, you should file Virginia Form FWV Application for Farm Wineries and Vineyards Tax Credit by Friday, April 1st. Late applications are not considered. The credit must be approved before you may claim it on your 2015 tax return. Once you receive notice of the allowable credit amount, you may claim that amount on your income tax return and compute any carryover credit.
The total amount of Virginia Farm Wineries and Vineyards tax credits available for 2015 is $250,000. If requests from taxpayers exceed this amount, the Department of Taxation will allocate them to qualifying taxpayers pro rata. If you qualify for credits exceeding your tax liability, you may carry them over for up to ten years.
The credit cannot be claimed to the extent you have claimed a deduction for the same expenses for federal income tax purposes.
The amount of the credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company (LLC) must be allocated to the individual partners, shareholders, or members in proportion to their ownership or interest within the business entity using Form PTE within 30 days after the credit is granted.