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Incentives & Financing

Federal, state, and local incentive programs and are based on three (3) types of incentives:

Site Acquisition / Development / Infrastructure

Economic Development Incentive Plan

The Hanover County Board of Supervisors, at the recommendation and support of the Department of Economic Development, has allocated funding to assist with infrastructure improvements for priority economic development projects.  The funding availability is subject to certain criteria, with a primary emphasis on tax revenues, jobs created and salaries, and the county’s target sectors.  Funds are typically used for water and sewer improvements and capacity fee payments, road improvements, traffic signals, stormwater management improvement or fees, or other improvements authorized by the Board of Supervisors.  These incentive funds are not issued for retail businesses and cannot be used if a Commonwealth Opportunity Fund (COF) Grant is requested.  Funds can be used to match up to 50 percent of the cost of eligible improvements.

Fast Track Designation

For priority economic development projects, Hanover County will assign the project a fast track designation. Hanover County staff will review the site plan and provide written comments within seven working days. County staff will arrange a meeting with the applicant and project engineer to discuss any comments and identify changes to the plans required for site plan approval. The building permit review process may run concurrently with the site plan review and is also eligible for fast track status.

Commonwealth of Virginia’s Discretionary Incentives

The Commonwealth of Virginia offers an array of discretionary incentives for competitive projects evaluating a Virginia location, providing financial inducements that make good fiscal sense for all parties. Performance-based incentives target the needs of companies as well as the development plans of localities and the Commonwealth.

  • Agriculture & Forestry Industries Development Fund (AFID) – Provides grants to localities for businesses that add value to Virginia-grown agriculture and forestry products.
  • Commonwealth’s Development Opportunity Fund (COF) – Provides grants at the Governor’s discretion to secure a company location or expansion in Virginia.
  • Major Eligible Employer Grant Program (MEE) – Provides grants to companies to make investments and provide a significant number of stable jobs through a significant expansion or new operation.
  • Port of Virginia Economic and Infrastructure Development Grant (POV Grant) – Provides grants to companies that construct new maritime-related employment centers or expand existing centers.
  • Virginia Economic Development Incentive Grant (VEDIG) – Provides grants to companies that invest and create new employment opportunities by locating significant headquarters, administrative, or service sector operations in Virginia.
  • Virginia Investment Performance Grant (VIP) – Provides grants to existing Virginia manufacturers or manufacturing-related research and development services that continue capital investment in the Commonwealth.

Rail Industrial Access Program

The Rail Industrial Access Program provides funds to construct railroad tracks for new or substantially expanded industrial and commercial projects having a positive impact on economic development in Virginia.  The Department of Rail and Public Transportation (DRPT) administers the RIA, which is subject to the approval of the Commonwealth Transportation Board (CTB).  This program is open to businesses, municipalities, economic development entities, and railroads.  The limited funding shall be used for track facilities and engineering, but not for utility relocation or right‐of‐way acquisition.  Financial assistance to any one county, city or town is limited to $750,000 in any one fiscal year.  The grant shall be awarded based on a 70/30 split (70% Department with 30% grantee match).  Funds may be used to construct, reconstruct, or improve part or all of the necessary tracks and related facilities on public or private property.  Funds may not be used for right-of-way acquisition or adjustment of utilities.

Economic Development Access Program

The Economic Development Access (EDA) Program is a state-funded incentive to assist localities in providing adequate road access to new and expanding manufacturing and processing companies, research and development facilities, distribution centers, regional service centers, corporate headquarters, and other basic employers with at least 51% of the company’s revenue generated from outside the Commonwealth. EDA is administered by the Virginia Department of Transportation (VDOT). The program may be used to:

  • Improve existing secondary highway system roads and city streets to accommodate the anticipated additional traffic generated by an eligible economic development site.
  • Construct a new road from a publicly maintained road to the new eligible establishment’s primary entrance when no road exists.

A qualified business establishment looking to locate or expand its operations within a Virginia locality will need to work with the local economic development office or governing body to apply for VDOT’s Economic Development Access program.

Subject to available funding, the maximum unmatched allocation to a locality within any one fiscal year is $700,000; allocations may be used for one or more projects. The EDA Program can provide localities with funding for Design-Only projects and projects which serve an MEI (Major Employment and Investment) Site.  When the cost of an individual access project exceeds $700,000, the locality may request up to $150,000 in supplemental funds, which must be matched on a dollar-for-dollar basis by a contribution from the general fund of the county, city, or town.

Development Revenue Bonds

Tax-exempt Industrial Revenue Bonds (IRBs) are issued through Hanover County’s Economic Development Authority and the Virginia Small Business Financing Authority (VSBFA). IRBs can be used to assist businesses in acquiring land, constructing or expanding buildings and purchasing equipment.  Additionally, the bonds are designed to provide capital for new or expanding manufacturing facilities and exempt projects such as solid waste disposal facilities. Through IRBs, creditworthy businesses can obtain long term financing at favorable interest rates for up to 100 percent of the cost of acquiring, constructing and equipping a facility, including site preparation. The bonds may also be used to lease facilities and equipment at tax-exempt rates.

All projects financed with IRBs must meet federal tax code requirements for eligibility. Tax exempt financing may be used for projects within a single political jurisdiction with a total capital investment value of less than $10 million.

Foreign Trade Zone

A Foreign Trade Zone (FTZ) is a secure or restricted-access site in or near a United States port of entry and is authorized by the U.S. Foreign-Trade Zones Board and operated under the supervision of the United States Customs Service.

Operating as an international airport expansion into Hanover County, Richmond International Airport (RIC) handles freight and customs clearances with efficiency and speed.  A major business advantage sponsored by the airport is Richmond’s Foreign Trade Zone (FTZ) #207.  Central Virginia’s FTZ #207 includes on-airport warehousing options at RIC and over 100 acres available for development on-airport. Additional magnet sites are located in Ashland, VA. The approved Alternative Site Framework (ASF) service area in FTZ #207 includes Hanover County.  (ASF) designated, which allows greater flexibility when adding new zone operations as well as expedited FTZ Board applications. Any property within the ASF-designated area of a particular FTZ can obtain status as a usage-driven FTZ site. All zones provide space for storage, distribution, and light assembly operations.

Foreign Trade Zone Benefits include:

  • No duty is paid on re-exported merchandise.
  • If foreign merchandise is sold domestically, no duty is paid until it leaves the zone or zones.
  • Businesses are allowed to store goods within FTZs for an unlimited period of time.
  • No duty is charged on most waste and scrap from production in an FTZ.
  • Businesses are allowed to manufacture products within FTZs and pay duties at the duty rate of either the foreign parts used or on the finished product, whichever is most advantageous to the company.

Virginia Talent Accelerator Program

The Virginia Talent Accelerator Program, delivered by VEDP in partnership with the Virginia Community College System, provides world-class training and recruitment solutions that are fully customized to a company’s unique operations, equipment, standards, and culture. All program services are provided at no cost to qualified new and expanding companies as an incentive for job creation.


Industrial Development Revenue Bonds

Tax-exempt Industrial Revenue Bonds (IRB) are issued through Hanover County’s Industrial Development Authority and can be used to assist businesses in acquiring land, constructing or expanding buildings and purchasing equipment. The bonds may also be used to lease facilities and equipment at tax-exempt rates.  All projects financed with IRBs must meet federal tax code requirements for eligibility. Tax exempt financing may be used for projects within a single political jurisdiction with a total capital investment value of less than $10 million.

The Virginia Department of Business Assistance (DBA) Financial Services Division administers the programs of the Virginia Small Business Financing Authority (VSBFA), which is a statewide conduit issuer of industrial development bonds and is the vehicle through which DBA provides financial assistance to Virginia businesses. DBA staff work with businesses, bankers and other state agencies to provide direct funding and credit enhancements through a variety of financing programs for the benefit of eligible new and expanding businesses.

Loan Guaranty Program (LGP)

Through the Loan Guaranty Program (LGP), the Virginia Small Business Financing Authority will guarantee a portion of a loan or line of credit extended by a commercial bank to a qualified Virginia business.  The maximum guaranty under the program is 75% of the loan or line of credit up to a maximum guaranty of $750,000.

To qualify as an applicant under the program, the Virginia business must e currently operating in Virginia and be in good standing with the State Corporation Commission or other applicable
state or local licensing authority. Businesses must also meet at least one of the following criteria to be an eligible borrower: Have $10 million or less in annual revenues over each of the last three years; or have a net worth of $2 million or less; or have fewer than 250 employees; or be a 501(c) (3) non-profit entity.

Economic Development Loan Fund (EDLF)

The Virginia Small Business Financing Authority’s  Economic Development Loan Fund (EDLF) is designed to fill the financing gap between private debt financing and private equity. Funds are available to economic development authorities and qualifying new and expanding businesses that are creating new jobs or saving “at risk” jobs.  Businesses in designated economically distressed areas may qualify for higher loan amounts. Funds are also available to Virginia businesses which derive 15% or more of their revenues from defense-dependent activities and can demonstrate economic hardship related to defense downsizing.

VSBFA Microloan for Small Businesses

The Microloan for Small Businesses is a direct loan from the VSBFA to the business client that does not require a bank’s participation in the transaction. It is an ideal tool for bankers who are faced with business loan requests for very small amounts where the bank would prefer to refer the client to an alternative source of funds.

Child Care Financing Program

The Child Care Financing Program offered through the Virginia Small Business Financing Authority offers loans of up to $250,000 per location for Child Care Centers and up to $15,000 for Family Home Providers can be available for eligible providers with terms up to 10-years.  Currently, no interest or fees apply.

Eligible borrowers are any regulated child care center licensed by the Virginia Department of Social Services (DSS) or filed as religious-exempt with DSS; and Family Home Providers licensed by the Virginia DSS, registered through the Voluntary Registration Program, part of a Licensed Family Day Care System, or participating in the USDA Food Program. Eligible uses include quality enhancement projects or renovations and repairs necessary to comply with health and safety standards required by DSS; playground equipment and learning aids; and fixed assets that directly impact the health, safety and welfare of the children.

Tax Credits

Virginia offers stable, low-tax costs for companies, including the benefits of no franchise or net-worth tax, a modest sales tax with a broad range of exemptions, and a 6% corporate income tax rate, which has not changed since 1972. Aiding the stable tax environment in the Commonwealth is a toolbox of credits and exemptions that companies can claim on taxes ranging from the sales and use tax to the corporate income tax.

  • Agriculture Materials and Equipment Sales & Use Tax Exemptions
  • Barge and Rail Usage Tax Credit
  • Commercial and Industrial Sales & Use Tax Exemption
  • Data Center Retail Sales & Use Tax Exemption
  • Green and Alternative Energy Job Creation Tax Credit
  • International Trade Facility Tax Credit
  • Major Business Facility Job Tax Credit
  • Major R&D Expenses Tax Credit
  • New Company Incentive Program
  • Port Volume Increase Tax Credit
  • Recyclable Materials Processing Equipment Tax Credit
  • Refundable R&D Expense Tax Credit
  • Worker Training Tax Credit

Local Tax Programs

Land Use Program

The Land Use Program which encourages the conservation of land devoted to agricultural, horticultural, forest and open space uses, has been expanded to encourage property owners — with land located inside the Suburban Services Area and which is designated for specific commercial uses on the County’s General Land Use Plan Map — to rezone to certain uses without requiring them to immediately leave the land use taxation program.

The Land Use Program allows qualified land to be taxed on a deferred basis.  Five years of qualifying real estate taxes can be deferred (with accruing interest) until there is a change to a disqualifying use.  Previously, if the parcel was rezoned to anything other than its qualified agricultural use, the deferred taxes (and accrued interest) would have been due at the time of rezoning from its qualified agricultural use.

It enables property, enrolled in the Land Use Program, to remain eligible –and not be immediately subject to roll-back taxes—when it is rezoned from agricultural use to specific commercial and industrial uses.  The qualified uses permitted include Manufacturing, Transportation and Warehousing, Professional, Scientific and Technical Services, Hotels and Motels and Professional Offices, as described in the North American Industrial Classification System (NAICS).  To increase the odds of a successful rezoning application, the land should be designated for such uses on the County’s adopted Land Use Plan map and located inside the Suburban Service Area.

With this expanded program, five years of deferred real estate taxes (and accrued interest) for the rezoned property would not be required until the issuance of a building permit or when the physical attributes of the property are modified.  Hanover County’s Office of the Commissioner of Revenue administers the Land Use Program and makes determinations of eligibility.

Rehabilitation Tax Exemption Program

The Hanover County Board of Supervisors. The purpose of the program for certain rehabilitated residential, industrial and commercial real estate is to encourage and provide incentives to Hanover County property owners to invest in improvements to existing structures. The tax exemption incentives are available for residential, commercial and industrial use properties.

Tangible Personal Property Reduced Tax Rate

Hanover County taxes the following tangible personal property at a reduced rate:

  • Aircraft – $0.50 per $100 of assessed value
  • Data Centers – $0.45 per $100 of assessed value