Current through Register Vol. XLI, No. 38, September 20, 2024
7.1. In
general. - The new jobs percentage is based on the number of new jobs created
in this State that are directly attributable to the qualified investment of the
taxpayer.
7.2. Applicable
percentage. - For the purpose of Section 7.1 of these regulations, the
applicable new jobs percentage shall be determined under the following table:
|
IF THE NUMBER OF THE APPLICABLE |
|
NEW JOBS IS: |
PERCENTAGE IS: |
|
1,000 |
90 |
|
760 |
80 |
|
520 |
70 |
|
280 |
60 |
|
50 |
50 |
7.3.
When a job is attributable. - An employee's position is directly attributable
to the qualified investment if:
7.3.1. the
employee's service is performed or his base of operations is at the new or
expanded business facility;
7.3.2.
the position did not exist prior to the construction, renovation, expansion or
acquisition of the business facility and the making of the qualified
investment, or will qualify as a saved job under W. Va. Code '11-13C-14(e)(4);
and
7.3.3. but for the qualified
investment, the position would not have existed.
7.3.4. Where under a collective bargaining
seniority system, new jobs at a new facility are actually filled by persons who
have been employees of the taxpayer for some time and where the newly hired
employees will back-fill the jobs vacated by such long-time employees, the
positions created by the new investment will constitute new jobs for purposes
of the business investment and jobs expansion tax credit, notwithstanding the
fact that they are filled by employees who have been employed by the taxpayer
in other positions for some time prior to the placement of the investment into
service or use.
For purposes of making the payroll factor calculations
required under W. Va. Code ''11-13C-4b and 11-13C-5, the payroll of new
employees and "wages, salaries and other compensation paid during the taxable
year to all employees of the taxpayer in this State, whose positions are
directly attributable to the qualified investment" relating to such seniority
system filled jobs will be the payroll of employees filling the new positions,
not payroll of new hires employed to back-fill the existing positions.
7.3.5. The individuals holding new
jobs can be replaced by other individuals, and the job title applicable to
those jobs can be changed, and it is even possible that certain job positions
may evolve into other functional positions involving new or different
operational duties. However, it is necessary that the fifty (50) or more jobs
created during the period between the applicable statutory dates be identified
and continue in a manner traceable to their original creation. Only those jobs
will county toward the determination of the amount of credit available.
For determining new jobs filled by new employees and for
determining whether a job is attributable to qualified investment, it is
irrelevant that job titles or job functions may change or that jobs are filled
by individuals different from those originally holding the positions.
Factors which indicate that a job is directly attributable to
qualified investment include, but are not limited to: the fact that a job is at
or in a new business facility constituting qualified investment, that a job
entails operation, maintenance, management or support of machinery or equipment
which constitutes qualified investment, that a job did not exist prior to the
placement of investment in service or use at a new or expanded business
facility and that a job is an integral part of the business operation of a new
business facility or of the expanded business operations of an expanded
business facility.
7.3.5.1. If a
project participant ended employment contracts with a participant which was a
contract employer and replaced that contract employment with its own or some
other participant's newly hired employees, the loss of the contract jobs from
the project would not county as lost jobs if those jobs were then filled by new
hires employed by any other participant in the project. The number of jobs
attributable to the project investment would be unchanged. It would be
irrelevant that the project participant employing the persons filling the jobs
had changed.
However, if a contractor providing jobs to the project were
eliminated, and the jobs formerly performed by the contract employees were
performed by employees who were already holding project jobs, then the total
number of jobs attributable to project investment would decrease, and the jobs
lost would be counted as such in making the new jobs determination for purposes
of calculating the credit and for calculating the payroll factor for jobs
attributable to qualified investment.
7.3.5.2. Construction worker jobs held during
the construction of a facility or start-up management or start-up consulting
jobs which are temporary or not permanent jobs resulting from the placement of
qualified investment into service or use cannot qualify as new jobs even though
such jobs may last for a substantial period of time, even a period of
years.
7.4.
Certification of new jobs. - With the annual return for the taxes imposed by W.
Va. Code ''11-12a or 11-13 et seq. filed for the taxable year in which the
qualified investment is first placed in service or use in this State, the
taxpayer shall estimate and certify the number of new jobs reasonably projected
to be created by it in this State within the period prescribed in Section 7.6
and the subsections thereof of these regulations, that are, or will be,
directly attributable to the qualified investment of the taxpayer: Provided,
That on and after July 1, 1987, the phrase "taxes imposed by W. Va. Code
''11-12A or 11-13 et seq. (or both) shall mean taxes imposed by W. Va. Code
''11-13, 11-13A, 13B, 21, 23, and et seq. 24 (or any one or combination of such
articles).
7.5. Equivalency of
permanent employees. - The hours of part-time employees shall be aggregated to
determine the number of equivalent full-time employees for the purpose of
Section 7.2 hereof for the purpose of determining the new jobs percentage, but
not for the purposes of Section 7.3 hereof for purposes of determining the W.
Va. Code '11-13C-5(c),
(d), (e), (f), (g), (h), (i), (j)(1)(B) and
(j)(1)(C) payroll factor multiplier, but the
W. Va. Code '11-13C-4b(c)(3)
multiple party certified project payroll factor will include part-time
employees' payroll. See Section 4b.3.4 through 4b.3.4.6.d.2 and Section 5.13 of
these regulations.
7.5.1. W. Va. Code
'11-13C-7(e)
reads as follows:
Equivalency of permanent employees. - The hours of part-time
employees shall be aggregated to determine the number of equivalent full-time
employees for the purpose of subsection (b) hereof but not for the purposes of
subsection (c) hereof.
This provision excludes part-time employees from qualifying
as employees holding jobs "directly attributable to the qualified investment"
under Section 11-13C-7(c).
W. Va. Code ''11-13C-4b(d) and 11-13C-3(b)(13) define a
part-time basis job as one being performed at least twenty (20) hours per week
for at least six (6) months during the taxable year. For temporary or seasonal
jobs, unlike part-time jobs, as defined above, the hours cannot be aggregated
to determine equivalent full-time employees. Indeed, temporary or seasonal
employees are specifically excluded from the definition of "permanent
employees" as defined in W. Va. Code ''11-13C-4b(d) and 11-13C-3(b)(13), and
payroll of seasonal and temporary employees cannot be included in the
apportionment fraction numerator for multiple party project participants or any
other project or nonproject credit taker.
7.5.2. Only those part-time jobs where the
employee is customarily performing work related duties at least twenty (20)
hours per week for at least six (6) months during the taxable year, may be
counted as part-time jobs for which full-time job equivalency can be calculated
for purposes of the business investment and jobs expansion tax credit under W.
Va. Code '11-13C-7(e).
Temporary or seasonal employment may not be counted toward the determination of
the number of new jobs created for purposes of the credit.
7.5.3. If employees are employed for less
than six (6) months during the year, even though they may work more than twenty
(20) hours per week, or even a full forty (40) hours per week or more during
that part of the year when they are working, they will not fall within the
statutory definition of new employees, and may not be counted for the
determination of the amount of the credit available. Likewise, any part-time
job held by an employee working six (6) months or more per year but less than
the statutory minimum of twenty (20) hours per week cannot be counted for the
determination of the amount of credit available.
7.5.4. Jobs transferred into West Virginia
from outside of the State will constitute new jobs for purposes of the West
Virginia business investment and jobs expansion tax credit, provided that the
new jobs are within West Virginia, are created within the statutory time
requirements and are held by West Virginia domiciled West Virginia residents.
It is quite acceptable if persons domiciled or residing outside of West
Virginia move into West Virginia and become West Virginia domiciled West
Virginia residents in order to fill jobs created in or moved into West
Virginia.
7.6.
Redetermination of new jobs percentage. - With the annual return for the taxes
imposed by W. Va. Code ''11-21 or 11-24 et seq., filed for the third taxable
year in which the qualified investment is in service or use, the taxpayer shall
certify the actual number of new jobs created by it in this State, that are
directly attributable to the qualified investment of the taxpayer. For purposes
of this credit, the third taxable year shall be the second tax year subsequent
to the tax year during which investment is first placed in service or use. The
third taxable year for multiple year certified projects is coterminous with the
"three (3) year" multiple year investment period, as determined under Section
4.3 of these regulations.
7.6.1. If the
actual number of jobs created would result in a higher new jobs percentage, the
credit allowed under W. Va. Code '11-13C et seq. shall be redetermined and
amended returns filed for the first and second taxable years that the qualified
investment was in service or use in this State.
7.6.2. If the actual number of jobs created
would result in a lower new jobs percentage, the credit previously allowed
under W. Va. Code '11-13C et seq. shall be redetermined and amended returns
filed for the first and second taxable years. In applying the amount of
redetermined credit allowable for the two preceding taxable years, the
redetermined credit shall first be applied to the extent it was originally
applied in such prior two (2) years to personal income taxes, then to
corporation net income taxes, then to business franchise taxes, then to
telecommunications taxes, then, for credit relating to original taxable periods
prior to March 10, 1990, to severance taxes, then to carrier income taxes and
lastly to business and occupation taxes, then to the sales and use taxes. Any
additional taxes due under W. Va. Code Chapter 11 shall be remitted with the
amended returns filed with the Tax Commissioner, along with interest, as
provided in W. Va. Code '11-10-17, and a ten
percent (10%) penalty, which may be waived by the Tax Commissioner if the
taxpayer shows that the overclaimed amount of the new jobs percentage was due
to reasonable cause and not due to willful neglect.
7.6.2.1. W. Va. Code '11-13C-3(b)(13),
in defining the term "new employees" for the purpose of determining the number
of new jobs attributable to qualified investment, states, in relevant part,
that:
In no case shall the new employees allowed for purposes of
this credit exceed the total increase in the taxpayer's employment in this
state.
Thus, the allowable amount of credit must always be based
upon the net number of new jobs created. Any decrease in the number of West
Virginia employees in any area or segment of a taxpayer's business must count
directly against the number of new jobs attributable to qualified investment
over the (generally) ten (10) year credit period.
7.6.3. Calculation of new jobs attributable
to qualified investment placed in service or use after March 9, 1990.
7.6.3.1. The taxpayer shall determine the
number of new jobs in place in the third taxable year or, for small businesses,
any taxable year, attributable to qualified investment by calculating the
average number of full-time and equivalent part-time new employees holding new
jobs attributable to qualified investment for each month of the third taxable
year or, for small business taxpayers, the taxable year, then totalling the
monthly averages and dividing that total by twelve (12).
7.6.3.2. The Tax Commissioner may prescribe
alternative methods for determining the number of new jobs in place in the
third taxable year or, for small businesses, any taxable year, attributable to
qualified investment in circumstances where such alternative methods are
determined by the Tax Commissioner to be appropriate for ascertaining an
accurate and realistic determination of new jobs attributable to qualified
investment.
7.6.4.
Calculation of new jobs attributable to qualified investment placed in service
or use prior to March 10, 1990.
7.6.4.1. The
number of new jobs in place in the third taxable year attributable to qualified
investment shall be determined as the average of the number of full-time and
equivalent part-time new employees holding new jobs attributable to qualified
investment employed by the taxpayer on the first day of the third taxable year
and the last day of the third taxable year.
7.6.4.2. At the taxpayer's election the
taxpayer may determine the number of new jobs in place in the third taxable
year or, for small businesses, any taxable year, attributable to qualified
investment by calculating the average number of full-time and equivalent
part-time new employees holding new jobs attributable to qualified investment
for each month of the third taxable year or for small business taxpayers, the
taxable year, then totalling the monthly averages and dividing that total by
twelve (12): Provided, That use of this section is mandatory for small business
taxpayers, and is not subject to election.
7.6.4.3. The Tax Commissioner may prescribe
alternative methods for determining the number of new jobs in place in the
third taxable year attributable to qualified investment in circumstances where
such alternative methods are determined by the Tax Commissioner to be
appropriate for ascertaining an accurate and realistic determination of new
jobs attributable to qualified investment.
