Current through Register Vol. XLI, No. 38, September 20, 2024
As used in these regulations and unless the context clearly
requires a different meaning, the following terms shall have the meaning
ascribed herein, and shall apply in the singular or in the plural.
3.1. Business. - The term "business" means
any activity taxable under W. Va. Code ''11-12A et seq. or 13 et seq. (or
both), which is engaged in by any person in this State: provided, That on and
after the July 1, 1987, the term "business" means any activity taxable under
article 13, 13-a, 13-b, 21, 23 and 24 of this chapter (or any one or
combination of such articles of this chapter).
3.2. Business expansion. - The term "business
expansion" means capital investment in a new or expanded business facility in
this State.
3.3. Business facility.
- The term "business facility" means any factory, mining operation, mill,
plant, refinery, warehouse, building or complex of buildings located within
this State, including the land on which it is located, and all machinery,
equipment and other real and personal property located at or within such
facility, used in connection with the operation of such facility, in a business
that is taxable in this State, and all site preparation and start-up costs of
the taxpayer for the business facility which it capitalizes for federal income
tax purposes.
3.3.1. "Mining operation" means
the place at which a person extracts ores or minerals from the ground. It
includes both surface and underground mining operations.
3.3.2. "Surface mine" means the surface of
land upon which activities are conducted which disturb the natural surface of
the land and result in the production of ores or minerals.
3.3.3. "Underground mine" means the surface
effects associated with the shafts, slopes, lifts or inclines connected with
excavations penetrating seams or strata of minerals, and the equipment
connected therewith which contribute to the mining, preparation or handling or
ores or minerals.
3.4.
Commissioner or Tax Commissioner. - The terms "Commissioner" and "Tax
Commissioner" are used interchangeably herein and mean the Tax Commissioner of
the State of West Virginia, or his delegate.
3.5. Compensation. - The term "compensation"
means wages, salaries, commissions and any other form of remuneration paid to
employees for personal services.
3.6. Construction contract. - The term
"construction contract" means any contract for the building, construction,
reconstruction or rehabilitation of, or the installation of any integral
components to, or improvements of, a new or existing business
facility.
3.7. Controlled group. -
The term "controlled group" means one or more chains of corporations connected
through stock ownership with a common parent corporation if stock possessing at
least fifty percent (50%) of the voting power of all classes of stock of each
of the corporations is owned directly or indirectly by one (1) or more of the
corporations; and the common parent owns directly stock possessing at least
fifty percent (50%) of the voting power of all classes of stock of at least one
(1) of the other corporations.
3.8.
Corporation. - The term "corporation" means any corporation, joint-stock
company or association, and any business conducted by a trustee or trustees
wherein interest or ownership is evidenced by a certificate of interest or
ownership or similar written instrument.
3.9. Delegate. - The term "delegate" in the
phrase "or his delegate," when used in reference to the Tax Commissioner, means
any officer or employee of the Department of Tax and Revenue duly authorized by
the Tax Commissioner directly, or indirectly by one or more redelegations of
authority, to perform the functions mentioned or described in W. Va. Code
'11-13C et seq.
3.10. Eligible
taxpayer. - The term "eligible taxpayer" means any person subject to the taxes
imposed by W. Va. Code '11-12a et seq. or 13 et seq. (or both) who makes
qualified investment in a new or expanded business facility located in this
State that results in the creation of at least fifty (50) new jobs: provided,
That on and after July 1, 1987, the phrase "eligible taxpayer" means any person
subject to the taxes imposed by W. Va. Code '11-13, 13-a, 13-b, 21, 23 and 24
et seq. (or any one (1) or combination of such articles of this chapter).
"Eligible taxpayer" shall also include an affiliated group of taxpayers if such
group elects to file a consolidated corporation net income tax return under W.
Va. Code, '11-24. et seq.
3.11.
Expanded facility. - The term "expanded facility" means any business facility
(other than a new or replacement business facility) resulting from the
acquisition, construction, reconstruction, installation or erection of
improvements or additions to existing property if such improvements or
additions are purchased on or after March 1, 1985, but only to the extent of
the taxpayer's qualified investment in such improvements or
additions.
3.12. Includes and
including. - The terms "includes" and "including," when used in a definition
contained in W. Va. Code '11-13C et seq. or these regulations, shall not be
deemed to exclude other things otherwise within the meaning of the term
defined.
3.13. Leased property. -
For property leased or purchased pursuant to a so-called capital lease, as
determined under generally accepted accounting principles, on or after March
10, 1990, the term "leased property" does not include property which the
taxpayer is required to show on its books and records as an asset under
generally accepted principles of financial accounting. If the taxpayer is
prohibited from expensing the lease payments for federal income tax purposes,
the property shall be treated as purchased property under this Section if the
property was purchased or leased on or after March 10, 1990. Property leased
prior to March 10, 1990 shall be treated as leased property without regard to
whether the lease is a capital lease or an operating lease.
3.14. New business facility. - The term "new
business facility" means a business facility which satisfies all the
requirements of subsections 3.14.1, 3.14.2, 3.14.3 and 3.14.4 of this Section
3.14.
3.14.1. The facility is employed by the
taxpayer in the conduct of a business the net income of which is or would be
taxable pursuant to W. Va. Code '11-21 or 24 et seq. Such facility shall not be
considered a new business facility in the hands of the taxpayer if the
taxpayer's only activity with respect to such facility is to lease it to
another person or persons. This restriction will not apply where the lease is
between project participants and the lessee's lease payments do not constitute
qualified investment, and investment in the property will qualify only at the
level of third party transactions between a participant and an entity outside
of the circle of project participants under 3.14.3 of these
regulations.
3.14.2. For periods
subsequent to March 9, 1990, such facility is purchased by, or leased to, the
taxpayer and placed in service or use on or after March 1, 1985. For periods
prior to March 10, 1990, such facility was placed in service or use on or after
March 1, 1985, without regard to the time of purchase or leasing.
3.14.3. The facility was not purchased or
leased by the taxpayer from a related person or a project participant, or
related person of a project participant, in any certified project in which the
taxpayer is a participant. The Tax Commissioner may waive this requirement if
the facility was acquired from a related party for its fair market value and
the acquisition was not tax motivated. Note that this provision does not
disqualify investment in property purchased or leased by a project participant
from an unrelated outside third party. However, the investment in lease or
sublease payments between project participants in such property resulting from
a subsequent lease arrangement would not qualify; nor would the purchase of
such property by one project participant from another project participant
qualify.
3.14.3.1. Given the statutory
mandate for a reasonable construction of the business investment and jobs
expansion tax credit statute enacted by the Legislature in W. Va. Code
'11-13C-14(b)
on March 10, 1990, the Tax Commissioner shall exercise the discretion granted
in this Section of these regulations and W. Va. Code ''11-13C-3(b)(12)(C) and
11-13C-14(e)(3)(C)
by refusing to grant any waiver of the proscription set forth therein except in
extraordinary circumstances.
3.14.4. Such facility was not in service or
use during the ninety (90) days immediately prior to transfer of the title to
such facility, or prior to the commencement of the term of the lease of such
facility: Provided, That this ninety (90) day period may be waived by the Tax
Commissioner prior to March 10, 1990 for good and sufficient cause, and
subsequent to March 9, 1990 if the Commissioner determines that persons
employed at the facility may be treated as "new employees" as that term is
defined in W. Va. Code '11-13C-14 and elsewhere in W. Va. Code '11-13C and in
these regulations for periods subsequent to March 9, 1990.
3.14.5. Notwithstanding the provisions of
subparagraphs 3.14.1, 3.14.2, 3.14.3 and 3.14.4 of this Section 3.14, the
purchase or leasing of a facility or of property from a nonparticipant
unrelated party by a participant in a certified project who then leases,
subleases or sells such property to a participant in the same certified project
may constitute qualified investment in a new business facility or in property
purchased or leased for business expansion or in new property, as defined in
these regulations if such facility or property otherwise qualifies as such in
accordance with W. Va. Code '11-13C and these regulations; and lease, sublease
or purchase price payments between project participants shall not constitute
qualified investment.
3.15. New employee.
3.15.1. The term "new employee" means a
person residing and domiciled in this State, hired by the taxpayer to fill a
position for a job in this State which previously did not exist in the
taxpayer's business enterprise in this State prior to the date on which the
taxpayer's qualified investment is placed in service or used in this State. In
no case shall the number of new employees directly attributable to such
investment for purposes of this credit exceed the total net increase in the
taxpayer's employment in this State: Provided, That with respect to taxpayers
who file application for certification of a project under W. Va. Code
'11-13C-4b
after March 10, 1990, and other taxpayers which place qualified investment into
service or use after March 10, 1990, the Tax Commissioner may require that the
net increase in the taxpayer's employment in this State be determined and
certified for the taxpayer's controlled group; and in the case of a project
involving more than one (1) person for the controlled groups of all
participants, taken as a whole: Provided, however, That persons filling jobs
saved as a direct result of taxpayer's qualified investment in property
purchased or leased for business expansion on or after March 10, 1990 may be
treated as new employees filling new jobs if the taxpayer certifies the
material facts to the Tax Commissioner and the Tax Commissioner expressly finds
that:
3.15.1.1. But for the new employer
purchasing the assets of a business in bankruptcy under chapter seven or eleven
of the United States Bankruptcy Code and such new employer making qualified
investment in property purchased or leased for business expansion, the assets
would have been sold by the United States bankruptcy court in a liquidation
sale and the jobs so saved would have been lost; or
3.15.1.2. But for taxpayer's qualified
investment in property purchased or leased for business expansion in this
State, taxpayer would have closed its business facility in this State, taxpayer
would have closed its business facility in this State and the employees of the
taxpayer located at such facility would have lost their jobs: Provided, That
the Tax Commissioner shall not make this certification unless the Tax
Commissioner finds that the taxpayer is insolvent as defined in 11 U.S.C.
'101(31) or that the taxpayer's business facility was destroyed in whole or in
significant part by fire, flood or other act of God.
3.15.1.2.a. This Section 3.15.1.2 shall apply
when,
But for the making of qualified investment in property
purchased or leased for business expansion in this State, the business facility
in which such property purchased or leased for business expansion is placed in
service or use, or which itself constitutes property purchased or leased for
business expansion, would have closed and the employees at the facility would
have lost their jobs: Provided, That the Tax Commissioner shall not make this
certification unless the Tax Commissioner finds that the entity which owned the
facility prior to the making of the qualified investment was insolvent as
defined in 11 U.S.C. '101(31) immediately prior to the making of such qualified
investment, or that the business facility was destroyed in whole or in
significant part by fire, flood or other act of God.
3.15.1.3. Jobs relating to an
insolvent business may be saved by:
3.15.1.3.a. The purchase of the assets of an
insolvent entity by an unrelated entity, with or without the making of
additional capital investment to be added to those assets, with the resulting
continuation of employment and operations formerly maintained by the insolvent
entity;
3.15.1.3.b. The purchase
of, or merger of, an insolvent entity, by or with an unrelated entity, and the
resulting continuation of operations formerly carried out by the formerly
insolvent entity, and a resulting continuation of employment; or
3.15.1.3.c. Purchase of the assets of an
insolvent entity by a partnership, or the joining of an insolvent entity with a
partnership, as a partner, whereby the assets, or assets and liabilities, of
the insolvent entity, as a partner, are absorbed by and become assets and
liabilities of the partnership which, subsequent to the addition of the
insolvent entity as a partner, shall not be insolvent, with the resultant
continuation of employment and operations relating to the formerly insolvent
entity.
3.15.1.4.
Whether a facility was destroyed in whole, or in significant part, by an act of
God depends on the facts and circumstances of each case.
3.15.2. A person shall be deemed to be a "new
employee" only if such person's duties in connection with the operation of the
business facility are on:
3.15.2.1. A
regular, full-time and permanent basis; or
3.15.2.2. A regular, part-time and permanent
basis: Provided, That such person is customarily performing such duties at
least twenty (20) hours per week for at least six (6) months during the taxable
year.
3.15.2.3. "Full-time
employment" means employment for at least one hundred forty (140) hours per
month at a wage not less than the prevailing state or federal minimum wage,
depending on which minimum wage provision is applicable to the business:
Provided, That for new jobs filled prior to March 10, 1990, "full-time
employment" means employment for at least one hundred twenty (120) hours per
month at a wage not less than the prevailing state or federal minimum wage,
depending on which minimum wage provision is applicable to the
business.
3.15.2.4. "Permanent
employment" does not include employment that is temporary or seasonal and
therefore the wages, salaries and other compensation paid to such temporary or
seasonal employees will not be considered for purposes of this
credit.
3.16.
New job. - The term "new job" means a job which did not exist in the business
of the taxpayer in this State prior to the taxpayer's qualified investment
being made, or which is a saved job as discussed in Section 3.15 and the
subsections thereof of these regulations and W. Va. Code '11-13C-14(e)(4),
and which is filled by a new employee.
3.17. New property. - The term "new property"
means:
3.17.1. Property the construction,
reconstruction or erection of which is completed on or after March 1, 1985 and
which was placed in service or use after such date; and
3.17.2. Property leased or acquired by the
taxpayer that is placed in service or use in this State on or after March 1,
1985, if the original use of such property commences with the taxpayer and
commences on or after such date.
3.17.3. New property must constitute property
purchased or leased for business expansion in order for investment in such
property to qualify for this credit.
3.18. Original use. - The term "original use"
means the first use to which the property is put, whether or not such use
corresponds to the use of the property by the taxpayer.
3.19. Partnership and partner. - The term
"partnership" includes a syndicate, group, pool, joint venture or other
unincorporated organization through or by means of which any business,
financial operation or venture is carried on, and which is not a trust or
estate, a corporation or a sole proprietorship. The term "partner" includes a
member in such a syndicate, group, pool, joint venture or
organization.
3.20. Person. - The
term "person" includes any natural person, corporation or
partnership.
3.21. Property
purchased or leased for business expansion.
3.21.1. Included property. - Except as
provided in subparagraph 3.21.2, the term "property purchased or leased for
business expansion" means real property, and improvements thereto, and tangible
personal property, but only if such real or personal property was constructed,
purchased, or leased and placed in service or use by the taxpayer, for use as a
component part of a new or expanded business facility, as defined in this
Section, which is located within West Virginia. This term includes only:
3.21.1.1. Real property, and improvements
thereto having a useful life of four or more years, placed in service or use on
or after March 1, 1985, by the taxpayer.
3.21.1.2. Real property, and improvements
thereto, or tangible personal property acquired by written lease having a
primary term of ten (10) or more years and placed in service or use by the
taxpayer on or after March 1, 1985.
3.21.1.3. Tangible personal property placed
in service or use by the taxpayer on or after March 1, 1985, with respect to
which depreciation, or amortization in lieu of depreciation, is allowable in
determining the personal or corporation net income tax liability of the
business taxpayer under W. Va. Code, '11-21 or 24 et seq., and which has a
useful life, at the time such property is placed in service or use in this
State, of four (4) or more years.
3.21.1.4. Tangible personal property acquired
by written lease having a primary term of four (4) years or longer, that
commenced and was executed by the parties thereto on or after February 1, 1986,
if used as a component part of a new or expanded business facility, shall be
included within this definition.
3.21.1.5. Tangible personal property owned,
or leased, and used by the taxpayer at a business location outside this State
which is moved into this State on or after February 1, 1986, for use as a
component part of a new or expanded business facility located in this State:
Provided, That if the property is owned, it must be depreciable or amortizable
personal property for income tax purposes, and have a useful life of four (4)
or more years remaining at the time it is placed in service or use in this
State, and if the property is leased, the primary term of the lease remaining
at the time the leased property is placed in service or use in this State must
be four (4) or more years.
3.21.2. Excluded property. - The term
"property purchased or leased for business expansion" shall not include:
3.21.2.1. Property owned or leased by the
taxpayer and for which the taxpayer was previously allowed tax credit for
industrial expansion, tax credit for industrial revitalization, tax credit for
coal loading facilities or the tax credits allowed by W. Va. Code
'11-13C-1 et seq. (the
business investment and jobs expansion tax credit or supercredit, small
business credit and corporate headquarters relocation credit).
3.21.2.2. Property owned or leased by the
taxpayer and for which the seller, lessor, or other transferor, was previously
allowed tax credit for industrial expansion, tax credit for industrial
revitalization, tax credit for coal loading facilities, or the tax credits
allowed by W. Va. Code '11-13-1 et seq. (the
business investment and jobs expansion tax credit or supercredit, the small
business tax credit or the corporate headquarters relocation credit).
3.21.2.3. Repair costs, including materials
used in the repair, unless for federal income tax purposes the cost of the
repair must be capitalized and not expensed.
3.21.2.4. Airplanes.
3.21.2.5. Property which is primarily used
outside this State, with use being determined based upon the amount of time the
property is actually used both within and without this State.
3.21.2.6. Property which is acquired incident
to the purchase of the stock or assets of the seller, unless for good cause
shown, the Tax Commissioner consents to waiving this requirement.
3.21.2.7. Natural resources in place
purchased or leased prior to March 1, 1985, and placed in service or use after
March 9, 1990, or purchased or leased after March 1, 1985 pursuant to an option
to purchase or lease such natural resources in place acquired prior to March 1,
1985 but exercised in whole or in part on or after March 10, 1990, and not
subject to the transition rules of W. Va. Code '11-13C-14(c)(2)
unless pursuant to a written contract to purchase or lease executed prior to
March 10, 1990, and subject, to one (1) or more of the transition rules set
forth in W. Va. Code '11-13C-14(c)(2).
Property purchased or leased prior to March 1, 1985, but placed in service or
use on or after March 1, 1985 and prior to March 10, 1990 may constitute
property purchased or leased for business expansion if other requirements for
such property are otherwise met.
3.21.2.8. Property purchased or leased on or
after March 10, 1990, and not subject to the transition rules of W. Va. Code
'11-13C-14(c)(2)
unless pursuant to a written contract to purchase or lease executed prior to
March 10, 1990, and subject, to one (1) or more of the transition rules set
forth in W. Va. Code '11-13C-14(c)(2),
the cost or consideration for which cannot be quantified with any reasonable
degree of accuracy at the time such property is placed in service or use:
Provided, That when the contract of purchase or lease specifies a minimum
purchase price or minimum annual rent, the amount thereof shall be used to
determine the qualified investment in such property under W. Va. Code
'11-13C-6 if
the property otherwise qualifies as property purchased or leased for business
expansion.
3.21.3.
Assumption of liabilities of the seller by the purchaser of property purchased
or leased for business expansion in consideration for such property will count
toward the cost of such property in determining qualified investment.
3.21.4. Investment in intangibles is excluded
from the measure of property purchased or leased for business
expansion.
3.21.5. Purchase date. -
Property shall be deemed to have been purchased prior to a specified date only
if:
3.21.5.1. The physical construction,
reconstruction or erection of the property was begun prior to the specified
date, or such property was constructed, reconstructed, erected or acquired
pursuant to a written contract as existing and binding on the purchase prior to
the specified date;
3.21.5.2. The
machinery or equipment was owned by the taxpayer prior to the specified date or
was acquired by the taxpayer pursuant to a binding purchase contract which was
in effect prior to the specified date; or
3.21.5.3. In the case of leased property,
there was a binding written lease or contract to lease identifiable property in
effect prior to the specified date.
3.22. Purchase. - The term "purchase" means
any acquisition of property, but only if:
3.22.1. The property is not acquired from a
person whose relationship to the person acquiring it would result in the
disallowance of deductions under Section 267 or 707(b) of the United States
Internal Revenue Code of 1954, as amended, and in effect on January 1,
1985.
3.22.2. The property is not
acquired by one (1) component member of a controlled group from another
component member of the same controlled group. The Tax Commissioner can waive
this requirement if the property was acquired from a related party for its then
fair market value; and
3.22.2.1. Given the
statutory mandate for a reasonable construction of the business investment and
jobs expansion tax credit statute enacted by the Legislature in W. Va. Code
'11-13C-14(b)
on March 10, 1990, the Tax Commissioner shall exercise the discretion granted
in this Section of these regulations and W. Va. Code '11-13C-3(b)(20)(B)
by refusing to grant any waiver of the proscription set forth therein except in
extraordinary circumstances.
3.22.3. The basis of the property for federal
income tax purposes, in the hands of the person acquiring it is not determined:
3.22.3.1. In whole or in part by reference to
the federal adjusted basis of such property in the hands of the person from
whom it was acquired; or
3.22.3.2.
Under Section 1014(e) of the United States Internal Revenue Code of 1954, as
amended, and in effect on January 1, 1985.
3.23. Qualified activity. - The term
"qualified activity" means any business or other activity subject to the tax
imposed by W. Va. Code '11-12A or 13 et seq. (or both): Provided, That on and
after July 1, 1987, the phrase "qualified activity" means any business or other
activity subject to the tax imposed by W. Va. Code '11-13, 13A, 13B, 21, 23 and
24 et seq. (or any one (1) or combination of such articles), but not the
activity of merely holding employment as an employee subject to personal income
tax and subject to withholding by the employer.
3.24. Related person. - The term "related
person" means:
3.24.1. A corporation,
partnership association or trust controlled by the taxpayer:
3.24.2. An individual corporation,
partnership, association or trust that is in control of the taxpayer;
3.24.3. A corporation, partnership,
association or trust controlled by an individual, corporation, partnership,
association or trust that is in control of the taxpayer; or
3.24.4. A member of the same controlled group
as the taxpayer.
For purposes of Sections 3.22 and 3.25 of these regulations,
"control," with respect to a corporation means ownership, directly or
indirectly, of stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of the stock of such corporation entitled
to vote. "Control," with respect to a trust, means ownership, directly or
indirectly, of fifty percent (50%) or more of the beneficial interest in the
principal or income of such trust. The ownership of stock in a corporation, of
a capital or profits interest in a partnership or association or of a
beneficial interest in a trust shall be determined in accordance with the rules
for constructive ownership of stock provided in Section 267(c) of the United
States Internal Revenue Code of 1954, as amended, other than paragraph (3) of
such Section.
3.25. Replacement facility. - The term
"replacement facility" means any property (other than an expanded facility)
that replaces or supersedes any other property located within this State that:
3.25.1. The taxpayer or a related person used
in or in connection with any activity for more than two (2) years during the
period of five (5) consecutive years ending on the date the replacement or
superseding property is placed in service by the taxpayer.
3.25.2. Is not used by the taxpayer or a
related person in or in connection with any qualified activity for a continuous
period of one (1) year or more commencing with the date the replacement or
superseding property is placed in service by the taxpayer.
3.26. Small business.
3.26.1. July 1, 1987 to March 9, 1990. - For
periods prior to March 10, 1990, and after June 30, 1987, the term "small
business" means a small business which has either annual payroll or annual
gross receipts of not more than the following amounts for the first tax year
when investment is first placed in service or use and beginning during a period
listed. Refer to Section 7a of these regulations for material relating to small
businesses.
|
Period |
Annual Payroll |
Annual
GrossReceipts |
|
July 1, 1987
to
Dec. 31, 1988 |
$1,500,000 |
$5,000,000 |
|
Jan. 1, 1989
to
Dec.31, 1989 |
$1,562,050 |
$5,206,850 |
|
Jan. 1, 1990
to
March 9, 1990 |
$1,637,150 |
$5,457,250 |
3.26.1.1.
Annual payroll. - For small businesses which have placed investment into
service or use before March 10, 1990, or which are subject to a transition rule
set forth in W. Va. Code '11-13C-14(c)(2),
the annual payroll of a business shall include the employees of the business
whether employed on a full-time, part-time, temporary, or other basis, during
the preceding twelve (12) months, the payroll of the business shall be divided
by the number of weeks, including fractions of a week, that it has been in
business, and the result multiplied by fifty-two (52).
3.26.1.2. Annual gross receipts. - For small
businesses which have placed investment into service or use before March 10,
1990, or which are subject to a transition rule set forth in W. Va. Code
'11-13C-14(c)(2),
the annual gross receipts of a business shall be calculated as follows:
3.26.1.2.a. The "annual gross receipts" of a
business which has been in business for three (3) or more complete fiscal years
means the highest annual gross revenues of the business from among the last
three (3) fiscal years. For purposes of this definition, the gross revenues of
the business includes revenues from sales of tangible personal property and
services, interest, rents, royalties, fees, commissions and receipts from any
other source, but less returns and allowances, sales of fixed assets,
interaffiliated transactions between a business and its domestic and foreign
affiliates, and taxes collected for remittance to a third party, as shown on
its books for federal income tax purposes.
3.26.1.2.b. The annual receipts of a business
that has been in business for less than three (3) complete fiscal years means
its total receipts for the period it has been in business, divided by the
number of weeks including fractions of a week that it has been in business, and
multiplied by fifty-two (52).
3.26.2. Subsequent to March 10, 1990. - The
term "small business" means a small business which has an annual payroll of one
million seven hundred thousand dollars ($1,700,000) or less, and annual gross
receipts of not more than five million five hundred thousand dollars
($5,500,000): Provided, That on or before January 15, 1991, and on or before
each January 5th thereafter, the Tax Commissioner shall prescribe amounts which
shall apply in lieu of the above amounts for taxable years beginning on or
after January 1 of the calendar year in which the determination is made:
Provided, however, That this determination shall not apply to small business
projects which have received certification from the Tax Commissioner prior to
March 10, 1990, if the said small business projects which have previously
received certification continue to meet the requirements of a small business as
in effect at the time of the certification of the project. Such prescribed
amounts shall be determined in accordance with W. Va. Code '11-13C et seq. and
notice thereof shall be filed in the State Register. For purposes of this
definition:
3.26.2.1. Annual payroll. - For
small businesses which place qualified investment into service or use after
March 9, 1990, and which are not subject to a transition rule set forth in W.
Va. Code '11-13C-14(c)(2),
the annual payroll of a business shall include the employees of its domestic
and foreign affiliates, whether employed on a full-time, part-time, temporary,
or other basis, during the preceding twelve (12) months, the payroll of the
business shall be divided by the number of weeks, including fractions of a
week, that it has been in business, and the result multiplied by fifty-two
(52). That amount shall then be added to the twelve (12) month payrolls of its
domestic and foreign affiliates to determine the annual payroll of the business
for purposes of this Section.
3.26.2.2. Annual gross receipts. - The annual
gross receipts of a business shall include the annual gross receipts of its
foreign and domestic affiliates.
3.26.2.2.a.
The "Annual gross receipts" of a business which has been in business for three
(3) or more complete fiscal years means the highest annual gross revenues of
the business for the last three (3) fiscal years. For purposes of this
definition, the gross revenues of the business includes revenues from sales of
tangible personal property and services, interest, rents, royalties, fees,
commissions and receipts from any other source, but less returns and
allowances, sales of fixed assets, interaffiliated transactions between a
business and its domestic and foreign affiliates, and taxes collected for
remittance to a third party, as shown on its books for federal income tax
purposes.
3.26.2.2.b. The annual
receipts of a business that has been in business for less than three (3)
complete fiscal years means its total receipts for the period it has been in
business, divided by the number of weeks including fractions of a week that it
has been in business, and multiplied by fifty-two (52).
3.26.2.2.c. The annual payroll, annual gross
receipts and annual median compensation requirements applicable to any small
business except a certified project credit taker under Section 3.26.2 of these
regulations shall, be determined when qualified investment is first placed in
service or use, and the subsequently redetermined inflation adjusted amounts
for each year, shall be the requirements applicable to that business for each
year throughout the ten (10) year credit period and any further carryover or
other extended credit period for the original credit to which the requirements
relate.
3.26.2.3.
Affiliates. - The term "affiliates" includes all concerns which are affiliates
of each other when either directly or indirectly one concern controls or has
the power to control the other or a third party or parties controls or has the
power to control both. In determining whether concerns are independently owned
and operated and whether or not affiliation exists, consideration shall be
given to all appropriate factors, including common ownership, common management
and contractual relations.
3.26.2.4. Concern. - The term "concern" means
any business entity organized for profit (even if its ownership is in the hands
of a nonprofit entity), having a place of business located in this State, and
which makes a contribution to the economy of this State through payment of
taxes, or the sale or use in this State of tangible personal property, or the
procurement or providing of services in this State, or the hiring of employees
who work in this State. "Concern" includes but is not limited to any person as
defined in W. Va. Code '11-13C-3(b)(18).
3.27. Taxpayer. - The
term "taxpayer" means any person subject to taxes imposed by W. Va. Code
''11-13, 11-13a, 11-13b, 11-21, 11-23 or 11-24 et seq. or any one or
combination thereof.
3.28. This
Code. - The term "this Code" means that the Code of West Virginia, 1931, as
amended.
3.29. This State. - The
term "this State" means the State of West Virginia.
3.30. Used property. - The term "used
property" means property acquired after February 28, 1985, that is not "new
property."
