The Virginia Research and Development Exemption

Many companies take advantage of the Virginia Sales and Use Tax Research and Development Exemption.  The exemption is applicable to tangible personal property purchased for use or consumption directly and solely in research and development.   Some examples of exempt products are chemicals, equipment, machinery, supplies, fuel and tools.

Typically, contractors are considered the end users of tangible personal property, and therefore sales and use tax is applied to their purchases.  However, the Research and Development Exemption also applies to contractors when property purchased is used exclusively in research and development. 

Virginia requires tangible personal property meet specific criteria in order to qualify for the exemption.  Tangible personal property must be used with a goal of creating new products, improving existing products, or the development of new uses for existing products.  Modifications to existing products which may be requested by customers do not qualify for the exemption.

In recent months, this exemption was expanded to include tangible personal property used in a federally funded research and development center.

For more information on this exemption and its application please contact tax@allynintl.com.

Tips for the Taxpayer

Review the tax regulations regularly for any applicable exemptions to your business.  Focus on states where you may have a substantial physical presence, a large operation or future business expansion.  Researching and identifying which exemptions apply to your business can result in substantial sales and use tax savings for your organization.

For More Information

If you are interested in learning more about this topic or other tax topics, please visit our Tax Publications under News and Events at www.allynintl.com.

 

 

 

 

 

 

How Can We Help?

Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of Federal, multi-state and local tax compliance and consulting for large US and global corporations. We use that experience to your advantage.

Allyn files state and local sales and use tax returns in every US taxing jurisdiction. We can manage your tax compliance, create a solid tax process, and provide audit defense for your company.

Contact us and we can provide a customized cost-effective solution to meet your company’s needs. For further information on Allyn Tax services, please contact: tax@allynintl.com.

 

About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia and Allyn regional headquarters are strategically located in Fort Myers FL USA, Shanghai P.R. CHINA and Prague, CZECH REPUBLIC. For more information, log on to www.allynintl.com.