Virginia · Recycling / Equipment · VA-REC-001
Recyclable Materials Processing Equipment Tax Credit
Publication revised September 24, 2026. Sourcebook page 266.
Credit amount / calculation
20% of qualifying machinery/equipment purchase price, subject to annual statewide cap/proration and Department of Environmental Quality certification.
Business fit and eligible activity
Potentially relevant to manufacturers producing products from recyclable material; current authorization runs through tax years beginning before 2027. Qualified investment or approved project activity; confirm eligible property, location and taxpayer type.
Illustrative business benefit
A sawmill invests $900,000 in qualifying production machinery. At 20%, the nominal credit is $180,000 before annual caps, tax-liability limits, carryforward rules, or negotiated adjustments. The company should isolate eligible machinery from buildings, vehicles, land, and other costs that the statute does not treat the same way.
Timing / first action
Check application or certification requirements before incurring the qualifying expense or beginning the qualifying activity.
Official sources
- Virginia Tax — Environmental Credits (tax.virginia.gov)
Related programs
Worker Training Tax Credit
35% of eligible training expenses
Forest-products employers can claim credits for qualifying worker training, including manufacturing training.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Clean Electricity Production Credit (Internal Revenue Code §45Y)
Production-based
Alternative to the investment credit for owners/operators of qualifying clean-electricity facilities; potentially relevant to qualifying on-site generation.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.