VA HB504

Creates a $2,500 nonrefundable income tax credit for eligible small businesses in retail trade (NAICS 44-45) or accommodation and food services (NAICS 72) industries that commence operations in designated Virginia Main Street Communities

Requires businesses to meet U.S. Small Business Administration size standards and lease or purchase a place of business in a qualifying Main Street Community during the taxable year

Applies to taxable years beginning January 1, 2026 through December 31, 2030, with a $5 million annual cap on total credits allocated on a first-come, first-served basis

Limits credit to one time per taxpayer, with unused credits carrying forward for up to five succeeding taxable years

Pass-through entities (partnerships, LLCs, S corporations) allocate credits proportionally to partners, members, or shareholders based on ownership interest