Sunday, June 26, 2011
State of Virginia Gives Wine Industry Tax Break
Virginia gives wine industry a tax break
Wineries can get tax credit for new equipment
Date published: 6/26/2011
by CHELYEN DAVIS
The Free Freelance-Star
Wineries in the state can get a tax credit for part of the cost for new or upgraded equipment.
A new law passed in this year's General Assembly session provides a corporate income tax credit for farm wineries.
The tax credit, which is available starting in the current tax year, allows farm wineries and vineyards to get credit for up to 25 percent of the cost of certain equipment and materials--everything from barrels to fertilizer. The credit is capped at $250,000 a year.
It's not a lot of money compared to the cost of setting up or expanding a vineyard, but winery owners say it's yet another example of Virginia's support for wine and wine tourism.
Ann Heidig, of Lake Anna Winery and president of the Virginia Wineries Association, said it can cost up to $15,000 to put in just one new acre of vines.
A credit for 25 percent of that isn't necessarily a lot. But, Heidig said, every bit helps in the current economy, when it's hard for small business owners to get loans.
"Any help on the part of the government is really a value added to us and to the government," she said.
Heidig said helping wineries expand also helps create jobs, a benefit to the state.
Carl Henrickson, of the Virginia Farm Wineries Council, is opening a new winery himself, Little Washington Winery in Rappahannock County. His estimate of the cost was about $10,000 per acre.
No one's choice to become a wine-maker--which Henrickson called a lifestyle decision--will be made based on the tax credit alone, he said.
"But the tax credit does in fact make it easier when tax time comes around," he said.
He and Heidig both said Virginia's government has been very supportive of wineries and vineyards. The tax credit bill came from Gov. Bob McDonnell.
Henrickson compares Virginia's wine climate to that of Maryland. In Virginia, there are currently 197 wine tasting rooms, Henrickson said. Maryland, by contrast, only has about 40.
That speaks to "the bigger picture of a friendly relationship as a whole" between wineries and the state, he said.
"In Virginia they're doing everything they can to promote wineries," said Jim Livingston, of Hartwood Winery in Stafford. "It's unbelievable what they're trying to do for us."
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