Commonwealth of Virginia (TDFP)

The Tourism Development Financing Program (TDFP) is a state-level funding initiative administered by the Commonwealth of Virginia, created in 2011 by the Virginia General Assembly. It was developed based on recommendations from a jobs commission and codified in Virginia Code (§ 58.1-3851.1 – § 58.1-3851.3). Its purpose is to support tourism-related projects that address a local deficiency in tourism infrastructure, such as inadequate lodging, dining, or sports facilities, particularly where visitor demand outpaces supply. The TDFP functions as a gap-financing tool rather than an up-front grant or subsidy. Eligible projects must first be proven to fill a tourism deficiency as identified in local Comprehensive Plans, Tourism Development Plans, and supported by independent Market or Feasibility Studies. Once a project is open and generating taxable sales revenue, a portion of the new tax revenue is used to pay down the developer’s financing gap. The financing model is akin to Tax Increment Financing (TIF), where the State, Locality, and Developer each contribute a third of the debt service on the project’s financing gap. TDFP projects must generate Virginia sales and use tax from qualifying activities such as lodging, dining, and space rental. Projects that rely solely on admissions tax—such as theme parks or museums—are not eligible, as Virginia does not collect admissions tax. Potentially eligible projects include large-scale or boutique hotels, sports complexes with revenue-generating facilities, and restaurant districts under common ownership. Projects must demonstrate sufficient revenue to attract lending and support quarterly repayments. The application must be submitted by a Locality (not the Developer) and includes multiple required documents: a comprehensive Tourism Development Plan, proof of deficiency, developer feasibility studies, ordinances establishing a tourism zone, a $500 application fee, and a signed Performance Agreement. Projects are categorized into three tiers based on total capital investment: Tier 1 (<$100M), Tier 2 ($100M+), and Tier 3 ($500M+ with 500+ jobs), with corresponding contribution rates of 1%, 1.5%, and 2% of quarterly revenue, respectively. Certified projects may begin construction only after formal approval by the State Comptroller. The program does not operate on a rolling basis, and applicants must coordinate closely with the Virginia Tourism Corporation (VTC) and Virginia Resources Authority (VRA) throughout the process. Application materials are reviewed by VTC and VRA, and large projects may also require approval from the Major Employment and Investment (MEI) Project Approval Commission. Once certified, quarterly payments are calculated and remitted in coordination with the Tax Commissioner’s Office. For assistance, applicants can contact Wirt Confroy, Director of Business Development at the Virginia Tourism Corporation via email at wconfroy@virginia.org or by phone at (804) 545-5552. Detailed guidelines, forms, and timelines are available at www.vatc.org/tdfp. While specific application deadlines are not listed, the process requires substantial pre-planning and coordination, so early engagement is encouraged.

Ensure market study proves high demand and local deficiency. Submit all ordinances and signed performance agreements in the correct order.