58.1-339 - Tax credit for rent reductions.
§ 58.1-339. Tax credit for rent reductions.
For taxable years beginning on or after January 1, 1991, through December 31,1999, any individual shall be entitled to a credit against the tax leviedpursuant to § 58.1-320, and any corporation shall be entitled to a creditagainst the tax levied pursuant to § 58.1-400, provided the followingrequirements are satisfied: (i) the individual or corporation is engaged inthe business of the rental of dwelling units and subject to the VirginiaResidential Landlord and Tenant Act (§ 55-248.2 et seq.), (ii) the landlordprovides a reduced rent to low income tenants who either (a) exceed the ageof sixty-two, (b) are disabled from a physical or mental condition, or (c)have been homeless at any time within the twelve months preceding thecommencement of the lease term, and (iii) the rent charged for the elderly,disabled, or previously homeless tenants is at least fifteen percent lessthan the rent charged to other tenants for comparable units in the sameproperty or, if none, for comparable units in the same market area, andprovided further, that no individual or corporation shall be entitled toclaim a credit under this section for reduction of rents charged to a tenanton or after July 1, 1996, on any dwelling unit unless a credit for rentalreductions was validly claimed on such dwelling unit for all or part of themonth of June 1996 and unless such tenant was an occupant of such dwellingunit on June 30, 1996, or unless a credit is claimed for a tenant who washomeless at any time within the twelve months preceding the commencement ofthe lease term. As used herein, a homeless person includes only persons whoresided in a domestic violence shelter or homeless shelter during the twelvemonths preceding the lease term.
The allowable credit amount shall be fifty percent of the total rentreductions allowed during the taxable year to the elderly, disabled andpreviously homeless tenants. The amount of the credit for each individual orcorporation for each taxable year shall not exceed $10,000 or the totalamount of the tax imposed by this chapter, whichever is less. If the amountof such credit exceeds the taxpayer's tax liability for such taxable year,the amount which exceeds the tax liability may be carried over for creditagainst the income taxes of such individual or corporation in the next fivetaxable years until the total amount of the tax credit has been taken.Credits granted to a partnership or electing small business corporation (Scorporation) shall be passed through to the individual partners orshareholders in proportion to their ownership or interest in the partnershipor S corporation.
The Virginia Housing Development Authority shall certify to the Department ofTaxation that the individual or corporation claiming a credit is providingrent reductions as authorized under this section. The Authority shallestablish regulations detailing the requirements and procedures applicable toclaiming the credit provided for hereunder and setting forth thecertification process, and may request that the individual or corporationrequesting certification submit records and other documents indicating thatthe requirements of this section have been satisfied. The total amount ofcredits which may be approved by the Authority in any fiscal year prior tofiscal year 1996-1997 shall not exceed one million dollars. Commencing infiscal year 1996-1997, the total amount of credits which may be approved bythe Authority in any fiscal year shall not exceed $250,000.
Under regulations adopted by the Authority, prior to July 1, 1996, theCommonwealth shall be divided into low income housing tax credit allocationareas to permit the division or allocation of the one million dollars in taxcredits on a statewide regional basis, to assure that such credits are fairlyallocated across the various regions of the Commonwealth.
Applicants for the tax credits shall be landlords doing business in theallocation area. Prior to July 1, 1996, such credits shall be allocated asfollows:
Low Income Housing Tax Percent Share of
Credit Allocation Area Tax Credits
Allocation Area 1 10.79
Allocation Area 2 12.09
Allocation Area 3 6.70
Allocation Area 4 20.98
Allocation Area 5 4.70
Allocation Area 6 5.22
Allocation Area 7 12.68
Allocation Area 8 5.15
Allocation Area 9 21.69
(1990, c. 953; 1992, c. 369; 1993, c. 37; 1996, c. 521; 1997, c. 184.)