BRU: Application for Barge and Rail Usage Tax Credit (2024)

Virginia · Virginia Tax · Used for tax years 2024

Virginia Form BRU is an application for the Barge and Rail Usage Tax Credit. It reports current-year and prior-year cargo moved by barge or rail instead of trucks on Virginia highways and calculates the credit requested for the increase. The credit must be approved before it is c

Who files this form

An international trade facility seeking the Barge and Rail Usage Tax Credit must apply using Form BRU. This is an application for a credit, not a filing requirement for every business.

To qualify, the facility must:

  • Do business in Virginia and engage in port-related activities, such as warehousing, distribution, freight forwarding and handling, or goods processing.
  • Use maritime port facilities in Virginia and have sole discretion and authority to move cargo containers originating or terminating in Virginia.
  • Have an ownership interest in the cargo and control the choice of transportation.
  • Move qualifying cargo by barge or rail instead of trucks or other motor vehicles on Virginia highways.

The credit applies only to qualifying shipments above the preceding taxable year's volume.

When it's due

For credits earned in tax year 2024, the application schedule falls in the following year:

  • April 1: Complete and mail Form BRU and supporting documents no later than this date.
  • May 1: The Department will contact you by this date if it needs additional information.
  • May 15: Deadline to respond to that request.
  • May 31: If you have not received acknowledgment of your application by this date, call (804) 786-2992.
  • June 30: The Department will issue the credit by this date.
  • July 15: If you have not received your credit certification by this date, call (804) 786-2992.

If an application has no postmark, the Department uses the date it receives the application to determine whether it met the deadline.

The text also states that no credits can be issued after the fiscal year ending June 30, 2025.

What you'll need

Prepare these items for your application:

  • Completed, signed Form BRU, including the tax year, business information, FEIN or SSN, entity type, contact information, and shipment totals.
  • VPA validation summaries for the current and previous taxable years. Every applicant must submit both.
  • Schedule A, if you have shipments through non-VPA-owned ports or shipments not listed on the VPA validation summary. It asks for shipment dates, container sizes and numbers, bill of lading numbers, and terminals. Additional copies may be used.

Keep supporting records, such as bills of lading showing shipment amounts and dates.

When claiming the approved credit on a return, a corporation must enclose Schedule 500CR, an individual Schedule CR, and a pass-through entity Schedule 502ADJ.

How to file

  1. Have your shipments validated by the Virginia Port Authority before filing.
  2. Complete Form BRU. Enter current-year qualifying TEUs on Line 2 and prior-year qualifying TEUs on Line 3. Subtract the combined Line 3 total from the combined Line 2 total, then multiply the difference by $25.
  3. Sign the application and include the required validation summaries and any applicable Schedule A.
  4. Mail Form BRU and enclosures to:

Department of Taxation

ATTN: Tax Credit Unit

P.O. Box 715

Richmond, VA 23218-0715

You may also fax them to (804) 774-3902.

  1. Wait for written certification of the allowable credit before claiming it on your applicable Virginia return.

A pass-through entity allocating the credit must also file Form TCA within 30 days after the credit is granted, but at least 90 days before participants file their income tax returns. Send it to the same address or fax number, but do not do both. Give each participant Schedule VK-1.

Common mistakes

  • Claiming the credit before approval. The credit must be approved before you claim it on a return.
  • Filing before VPA validation. Shipments must be validated before you file Form BRU.
  • Duplicating shipments on Schedule A. Do not include containers already listed in the VPA validation summary.
  • Overlooking the prior-year comparison. The form says you do not qualify if prior-year combined TEUs exceed current-year combined TEUs.
  • Skipping business registration. Business taxpayers should be registered with the Department before completing Form BRU. If not registered, complete Form R-1.
  • Missing Form TCA. Failure to file it may cause a participant's credit claim to be disallowed or delay return processing. Do not submit Form TCA by both mail and fax.

Questions people ask

How much is the credit?

The credit is $25 per qualifying TEU above the preceding taxable year's volume. No more than $500,000 in credits may be issued in any fiscal year. If requests exceed that amount, credits are allocated proportionately among qualified taxpayers.

How do I convert cargo to TEUs?

A 40-foot or 45-foot container equals 2 TEUs. One unit of roll-on/roll-off cargo or 16 tons of noncontainerized cargo equals 1 TEU. Convert noncontainerized tonnage to TEUs for Lines 2 and 3.

Can I carry forward unused credit?

Yes. Unused credit may be carried over for 5 taxable years.

What if my return is due before I receive approval?

If the return on which you will claim the credit is due on or before May 1, you may need to submit an extension payment for tax due or file an amended return after receiving the credit certification.

Where can I get help?

For tax credit assistance, call (804) 786-2992. For help with the VPA Validation Report or cargo verification, call (757) 391-6235 or email Helpdesk@vit.org.

Official sources

All versions of BRU