Virginia wineries and vineyards have until April 1, 2013 to file for a tax credit against 2012 income on qualified capital expenditures made in connection with establishing or improving a Virginia farm winery or vineyard. The credit equals 25 percent of qualified capital expenditures, which include purchases of certain equipment, soils, plants and other materials used in growing grapes or producing wine in the Commonwealth.
Wineries and vineyards that qualify for this tax credit must file Virginia Form FWV Application for Farm Wineries and Vineyards Tax Credit by the deadline. The credit must be approved before it is claimed on 2012 tax returns.
The total amount of 2012 tax credits available to Virginia farm wineries and vineyards equals $250,000. If requests from taxpayers exceed this amount, then the Department of Taxation will allocate 2012 tax credits to qualifying taxpayers pro rata. Wineries and vineyards that qualify for credits exceeding their tax liability may carry over the credits for up to 10 years.
This tax credit cannot be claimed by a winery or vineyard that has claimed a deduction for the same expense for federal income tax purposes.