West Virginia Code of State Rules
Agency 110 - Tax
Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT
Series 110-13C - Business Investment And Jobs Expansion Tax Credit, Corporation Headquarters Relocation Tax Credit, Sma
Section 110-13C-2 - Overview of the credit

The business investment and jobs expansion tax credit is available to a taxpayer or a group of project participant taxpayers against the portion of certain taxes imposed by this State which are attributable to and the consequence of the taxpayer's qualified investment in a new or expanded business in West Virginia which results in the creation of new jobs. The maximum allowable credit is determined by multiplying the amount of the taxpayer's qualified investment by the taxpayer's new jobs percentage.

The amount of qualified investment is based on the useful life and the cost of real and personal property as follows:

PERCENTAGE OF

COST WHICH CAN

BECOME QUALI-FIED INVESTMENT

USEFUL LIFE

Qualified investment for the purposes of the business investment and jobs expansion tax credit, generally consists of the investment of the taxpayer in real and tangible personal property, with certain exclusions, multiplied by the appropriate qualified investment percentage as described above. Leases of tangible personal property and real property can qualify as investment for purposes of the credit.

The percentage of qualified investment available as credit is determined by the number of new jobs created which are directly attributable to the taxpayer's qualified investment as follows:

A new job must be filled by a West Virginia domiciled West Virginia resident and must be directly attributable to the making of new investment.

The credit is applied over a ten (10) year period (at 1/10th per year) beginning in the taxable year in which the qualified investment is placed in service or use, or, at the taxpayer's option, in the next succeeding tax year.

The business investment and jobs expansion tax credit may be used to offset up to eighty percent (80%) of the tax liability apportioned to the qualified investment for the following State taxes in the following order.

Business and Occupation Tax

Carrier Income Tax

Telecommunications Tax

Business Franchise Tax

Corporation Net Income Tax

Personal Income Tax

Sales and Use Taxes

The credit may offset the severance tax for certain taxpayers who have placed investment into service or use during certain time periods, generally, prior to March 10, 1990, or who are subject to certain statutory rules. The credit may also be sued as an indirect offset of up to twenty percent (20%) of workers' compensation premiums directly attributable to the qualified investment and eighty percent (80%) of ad valorem property tax attributable to the qualified investment, and eighty percent (80%) of unemployment insurance tax attributable to the qualified investment. The property tax, unemployment insurance tax and workers' compensation premiums are offset by means of a rebate of the remaining twenty percent (20%) of the business taxes listed above, except for the sales and use taxes, provided that sufficient credit for the year remains available. Unused credit equal to the remainder of rebate credit for eighty percent (80%) of property tax, eighty percent (80%) of unemployment insurance tax and twenty percent (20%) of workers' compensation premiums not offset during the taxable year may be carried forward to the twelfth (12th) year subsequent to the year during which qualified investment was placed in service or use. The amount of taxes attributable to the new investment is determined by multiplying the total tax liability by a fraction, the numerator of which is the compensation paid to the employees hired as a result of the new investment, and the denominator of which is the compensation paid to all West Virginia employees of the taxpayer.

The statute provides for business investment and jobs expansion tax credit projects whereby multiple parties may engage in a business enterprise such that the parties together will create at least fifty (50) jobs and make qualified investment subject to the credit. A business entity may qualify as a project participant in a multiple party project by contributing either property, as a direct purchaser or lessee of qualified investment property, or jobs, as an employer, to a business investment and jobs expansion tax credit project.

The statute provides for multiple year projects wherein the qualified investment will be made over a period of up to three (3) tax years, rather than over a single taxable year. A project involving both multiple parties and multiple years can also be approved by the Tax Commissioner.

The regular business investment and jobs expansion tax credit is available for an entity or for project participants which make qualified investment in West Virginia and which create at least fifty (50) new jobs.

The small business tax credit is available for businesses which have an annual payroll and annual gross receipts not exceeding those maximums set forth in Sections 3.2b and 7a of these regulations. This credit is available to businesses which make qualified investment which results in the creation of at least ten (10) new jobs. Only multiple year projects may be created by small business tax credit investors. Multiple party small business tax credit projects may not be created under the statute.

Effective February 1, 1986, a corporation that moves its corporate headquarters to West virginia from a location outside this State may be entitled to a credit. The amount of the credit varies depending on the number of new jobs created in West Virginia by relocation of the corporate headquarters. If the relocation creates at least fifteen (15) new jobs, but less than fifty (50) new jobs, or if the corporation headquarters relocation is part of a business development project being conducted in West Virginia by the corporation, which is also placed into service or use, during the same tax year that the corporate headquarters is relocated, which together result in at least fifty (50) new jobs being created, then the credit available is determined by multiplying the applicable "new jobs percentage" by the "adjusted qualified investment."

If the relocation creates at least fifteen (15) but less than fifty (50) new jobs, then the amount of credit is equal to ten percent (10%) of the corporation's adjusted qualified investment. The new jobs percentage will range from fifty percent (50%) for fifty (50) new jobs to ninety percent (90%) for one thousand (1,000) new jobs, although the taxpayer corporation may at its option choose to take the ten percent (10%) credit even though fifty (50) or more new jobs have been created.

The "adjusted qualified investment" means the qualified investment of the taxpayer in real and tangible personal property purchased for business expansion plus the cost of the reasonable and necessary expenses incurred by the taxpayer to relocate the corporate headquarters from its out-of-state location to West Virginia.