City Council adopted a technology zone program with an effective date of January 1, 2017, with amendments as of February 26, 2019, to encourage technology businesses to form, locate and expand in specific areas within the City (see, Technology Zone map). Qualified Technology Businesses are eligible for an abatement of the Business, Professional, and Occupational License (BPOL) or Machinery & Tools tax, depending on the nature of the company.
The following is provided as guidance only. If you are interested in this program it is highly recommended you read the entire ordinance, which can be found at:
Qualified Technology Businesses
- Either a New Technology Business or a Divested Technology Business that (a) is within the boundaries of a Technology Zone as established in the City Code and (b) either creates at least five  new full-time jobs or makes a capital investment of at least $200,000 in either (i) tangible personal property or machinery and tools or (ii) real estate improvements used exclusively in such business, or any combination thereof; or
- An Expansion Technology Business (a) that is within the boundaries of a Technology Zone established in this Chapter and (b) for businesses with twenty  or fewer full-time employees, creates five  net new jobs in any calendar year or, for businesses with over twenty  full-time employees, creates net new jobs in any calendar year equal to twenty-five percent [25%] of its total number of full-time employees. The baseline number of employees is determined by the average number of employees reported to the Virginia Employment Commission in December of the year prior to the increase. The new jobs created and capital investment must be located at the business’ Definite Place of Business in a Technology Zone. The full-time job requirement may be met with part-time jobs using a full-time equivalency of forty  hours per week.
Qualifying Business Activities
The types of business activities that qualify as technology include:
- Cybersecurity, personal security and property security;
- Sea level rise and recurrent flooding;
- Medical devices, medical diagnostics, pharmaceuticals, biotechnology, biochemical engineering and other life sciences and health care technologies;
- Advanced materials and advanced manufacturing;
- Computer hardware and software;
- Electronics and instrumentation;
- Photonics and sensors;
- Internet and e-commerce;
- Educational and training technologies, including modeling and simulation;
- Bio-informatics and data analytics;
- Logistics and maritime commerce;
- Information technology, telecommunications and wireless technology;
- Green technologies, renewable energy research and development, and energy conservation;
- Advanced transportation technologies;
- Financial technology; and
- Aerospace engineering, systems, and products and parts manufacturing.
The use of computers, telecommunications services, or a web page or internet site shall not, in itself, be sufficient to qualify as a technology business.
Definite place of business - means an office or a location at which a regular and continuous course of dealing occurs over a period of thirty (30) consecutive days or more. A definite place of business for a person engaged in business may include a location leased or otherwise obtained from another person.
New Technology Business - means a technology business that either (a) establishes its initial definite place of business in the technology zone and thereafter maintains its principal definite place of business within the boundaries of the technology zone or (b) has no definite place of business in the city before establishing a definite place of business in the technology zone and thereafter maintains its principal definite place of business in the technology zone.
Divested Technology Business - means a new business resulting from the divestiture by an existing Technology Business located within the city of a subsidiary Technology Business when the subsidiary Technology Business is purchased or otherwise acquired by a new owner that is not an affiliate of the existing Technology Business and the resulting new Technology Business must, as a result of its divestiture, relocate from its existing place of business in the city to a new place of business and subsequently conduct business in a Technology Zone for eighteen (18) consecutive months.
Expansion Technology Business - means an existing Technology Business located within a Technology Zone that meets the new jobs incentive threshold criteria set forth in Section 45.6-4(5).
Non-Manufacturing Technology Businesses
A qualified New Technology Business, shall be entitled to a reduction of its business, professional and occupational license tax imposed against gross receipts derived from its technology business as follows:
- One hundred percent (100%) reduction in year one of operation;
- One hundred percent (100%) reduction in year two of operation;
- Fifty percent (50%) reduction in year three of operation;
- Fifty percent (50%) reduction in year four of operation; and
- Fifty percent (50%) reduction in year five of operation.
A qualified Divested Technology Business, shall be entitled to a reduction of its business, professional and occupational license tax imposed against gross receipts derived from its technology business as follows:
- One hundred percent (100%) reduction in the calendar year during which the business is certified as a Qualified Technology Business, prorated as of the effective date of its certification as a Qualified Technology Business;
- One hundred percent (100%) reduction in year two of certification; and
- One hundred percent (100%) reduction in year three of operation but only for such period of time that makes the total duration of the benefits afforded by this chapter to such Divested Technology Business equal to two (2) years.
A qualified Expansion Technology Business, shall be entitled to a reduction of its business, professional and occupational license tax imposed against gross receipts derived from its technology business as follows:
- Fifty percent [50%] reduction in each business tax year for which the new jobs incentive threshold is met but in no event shall the benefits afforded to the Expansion Technology Business be provided more than five  business tax years in any consecutive ten  year period after the business’ initial application for certification.
Manufacturing Technology Businesses
Any advanced manufacturing business, New, Divested or Expansion, that is not subject to business professional and occupational license tax and that is certified as a qualified technology business shall be entitled to a reduction of its machinery and tools tax imposed by Section 24¬3 of the Norfolk City Code against gross receipts derived from its Technology Business by an amount equal to the amount such Qualified Technology Business would have received under Section 45.6-6(1) above if it were subject to business professional and occupational license tax; provided, however, if such benefit amount is greater than the machinery and tools tax that would otherwise be payable by such Qualified Technology Business, such excess amount may not be rolled over to any subsequent year, and in any event the benefits provided are subject to the limitation of Section 45.6-6(1)(d) above.
In no event shall the benefits afforded to a Qualified Technology Business pursuant to this Chapter 45.6 be greater than One Hundred Thousand and 00/100 Dollars ($100,000.00) in any given year of certification, and a Qualified Technology Business may not roll over any benefits which are in excess of such $100,000.00 cap or which are not provided due to the five (5) year cap on Expansion Technology Businesses to any successive years.
The tax reduction shall begin as of the month of certification of a technology business as a qualified technology business by the city manager or designee. To maintain eligibility for the tax reduction after year one, the business must reapply annually to the city manager or designee to demonstrate that it continues to be a qualified technology business. The tax reduction provided in this section shall apply to a qualified technology business for no more than five (5) calendar years, including any partial initial calendar year.
- The qualified technology business must file a business license application annually with the Commissioner of the Revenue and shall provide the commissioner with an annual certification from the City Manager or designee that the business is a qualified technology business.
- The amount of gross receipts estimated to be earned from qualified technology business activities must be set out in the license application and shall be subject to verification by the Commissioner of the Revenue by auditor inspection of documents.
- All business license tax reductions are subject to adjustment by the Commissioner of the Revenue based on actual gross receipts earned from qualifying technology business activities. If a business is certified a qualified technology business prior to payment of its business license tax liability to the city, such tax liability shall be reduced according to the schedule above.
- If a business is certified a qualified technology business after it has paid its business license tax liability to the City in full, it shall receive a refund, without interest, in accordance with the schedule above. No local taxes or fees may be outstanding at the time of application for the business license and reduction.
- If a business ceases to be a qualified technology business during a calendar year in which tax reductions apply, business license taxes shall be payable at one hundred percent (100%) of the tax amount imposed by Chapter 24, Article II-A of the Norfolk City Code from the month the business ceased to be qualified until the end of the calendar year.
- Prepare a formal letter requesting designation as a qualified technology zone technology business.
- Send Letter to:
Mr. Jared Chalk
Interim Director of Development
City of Norfolk
Department of Development
999 Waterside Drive, Suite 2430
Norfolk, VA 23510
- Economic Development
- Verification of:
- Business Location
- Business Technology Activities
- Business type (New, Divested or Expansion)
- Preparation of Certification Memorandum
- Send Memorandum to City Manager for approval.
- Verification of:
- City Manager
- Review Certification Memorandum and sign with approval or disapproval.
- Return to Development
- Forward to Commissioner of the Revenue.
- Commissioner of the Revenue
- Review to ensure company is current in all taxes and fees owed to city.
- Issue tax reduction
If you have any further questions, please contact the Economic Development Department at 757-664-4338.