Source: http://www.legis.state.wv.us/WVCODE/code.cfm?chap=11&art=13D&section=7
Timestamp: 2016-05-27 20:31:21
Document Index: 437581590

Matched Legal Cases: ['§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§ 3401', '§ 401', '§ 401', '§ 51', '§ 3304', '§11', '§11', '§11', '§11', '§11', '§11', '§11']

Chapter 11 | Article 11 - 13D
11 - 13 D- 1 11 - 13 D- 2 11 - 13 D- 3 11 - 13 D- 3 A 11 - 13 D- 3 B 11 - 13 D- 3 C 11 - 13 D- 3 D 11 - 13 D- 3 E 11 - 13 D- 3 F 11 - 13 D- 4 11 - 13 D- 5 11 - 13 D- 5 A 11 - 13 D- 5 B 11 - 13 D- 6 11 - 13 D- 7 11 - 13 D- 8 11 - 13 D- 9 11 - 13 D- 10 13E - BUSINESS AND OCCUPATION TAX 13F - BUSINESS AND OCCUPATION TAX 13G - TAX CREDIT FOR REDUCING TELE
13H - BUSINESS AND OCCUPATION TAX 13I - TAX CREDIT FOR EMPLOYING FOR
13W - APPRENTICESHIP TRAINING TAX 13X - WEST VIRGINIA FILM INDUSTRY 13Y - THE WEST VIRGINIA MANUFACTUR
WVC 11 - 13 D- ARTICLE 13D. TAX CREDITS FOR INDUSTRIAL EXPANSION AND REVITALIZATION, RESEARCH AND DEVELOPMENT
PROJECTS, CERTAIN HOUSING DEVELOPMENT PROJECTS, MANAGEMENT INFORMATION SERVICES FACILITIES, INDUSTRIAL FACILITIES PRODUCING COAL-BASED LIQUIDS USED TO PRODUCE SYNTHETIC FUELS, AND AEROSPACE INDUSTRIAL FACILITY INVESTMENTS.
WVC 11 - 13 D- 1 §11-13D-1. Legislative findings and purpose.
The Legislature finds that the encouragement of the location
of new industry in this state; the expansion, growth and
revitalization of existing industrial facilities in this state; the
conduct of research and development in this state, for purposes of
expanding markets for sales and uses of this state's natural
resources and industrial products, the construction of residential
housing and the creation or expansion of management information
services facilities are all in the public interest and promote the
general welfare of the people of this state.
In order to encourage capital investment in this state and
thereby increase employment and economic development, there is
hereby provided a tax credit for industrial expansion and
revitalization in this state, for certain research and development
related expenditures in this state, for certain housing and
development related expenditures in this state and for the creation
or expansion of certain management information services facilities
WVC 11 - 13 D- 2 §11-13D-2. Definitions.
(a) Any term used in this article shall have the same meaning
as when used in a comparable context in article thirteen of this
chapter, unless a different meaning is clearly required by the
context of its use or by definition in this article.
(b) For purpose of this article, the term:
(1) "Eligible investment" means that amount determined under
either section four of this article, for investment in a new or
expanded or revitalized industrial facility, or under section five
of this article, in the case of an eligible research and
development project, under section five-a for a qualified housing
development project, or under section five-b for a management
information services facility.
(2) Eligible taxpayer.
(A) "Eligible taxpayer" means an industrial taxpayer who
purchases new property for the purpose of industrial expansion, or
for the purpose of revitalizing an existing industrial facility in
this state; or a taxpayer who purchases property or services, or
both, for the purpose of conducting an eligible research and
development project in this state or for the purpose of
constructing a qualified housing development project in this state.
(B) An eligible taxpayer for purposes of the management
information services facility credit means a taxpayer fulfilling
the requirements of paragraph (C) or (D) of this subdivision which
has purchased, or leased, and placed into service or use in amanagement information services facility, qualified investment, as
defined under section five-b of this article, of two million
dollars or more over a time period of not more than three hundred
sixty-five consecutive days and which operates such management
information services facility, without regard to whether such
taxpayer is an industrial taxpayer or engages in an industrial
business or operates an industrial facility as herein defined.
(C) An eligible taxpayer for purposes of the management
information services facility credit is a person or entity which
had no operations and owned or leased no property in West Virginia
during the five-year period prior to the creation of the management
information services facility in West Virginia, and which is not a
successor in business to any person or entity which had operations
or owned or leased property in West Virginia during the five-year
period prior to the creation of the management information services
facility in West Virginia.
A person or entity shall not constitute an eligible taxpayer
for purposes of the management information services facility credit
if any related person (as defined in Section 267(b) of the
Internal Revenue Code of 1986, as amended) had operations or owned
or leased property in West Virginia during the five-year period
prior to the creation of the management information services
facility in West Virginia or if any such related person is a
or owned or leased property in West Virginia during the five-yearperiod prior to the creation of the management information services
(D) Notwithstanding paragraph (C) of this subdivision, a
person, entity, successor in business which would otherwise not
constitute an eligible taxpayer under paragraph (C) of this
subdivision may nevertheless constitute an eligible taxpayer for
purposes of this management information services facility credit if
such person, entity, successor places qualified investment into
service or use in West Virginia for the purpose of establishing in
this state a management information services facility that is new
to West Virginia and which services do not include any management
information services previously conducted by such person, entity,
successor, or a related person (as defined in Section 267(b) of the
Internal Revenue Code of 1986, as amended) in West Virginia, or if
such person, entity or successor places qualified investment into
service or use in West Virginia in a management information
services facility for the purpose of consolidating or relocating
significant existing national, regional or international management
information services operations in West Virginia, and such
consolidation or relocation results in the placement of at least
two million dollars of qualified investment into service or use in
West Virginia within the time periods described in paragraph (B) of
this subdivision, and such consolidation or relocation results in
the relocation of significant management information services
operations into West Virginia which did not previously exist inWest Virginia, and the taxpayer otherwise constitutes an eligible
taxpayer under such paragraph (B). For purposes of this section,
the term "regional" means an area including more than one state or
portions of more than one state of the United States.
(3) "Eligible research and development project" means a
research and development project engaged in or conducted within
this state, by a person who is engaged in this state in the
business of producing natural resources or in an industrial
business when such research and development project is conducted
for purposes relating to the technical, economic, financial,
engineering or marketing aspects of expanding markets for, and
increasing sales of, this state's natural resource products, or
industrial products, or both.
(4) "Industrial business" means any privilege taxable under
section two-b or two-m, article thirteen of this chapter, and
includes a manufacturing service taxable under section two-h of
said article: Provided, That on and after the first day of July,
one thousand nine hundred eighty-seven, the term "industrial
business" shall mean the business of manufacturing, compounding or
preparing tangible personal property for sale, profit or commercial
use, the business of generating electric power, and the business of
providing a manufacturing service, which were taxable,
respectively, under sections two-b, two-m and two-h, article
thirteen of this chapter, on the first day of January, one thousand
nine hundred eighty-five.
(5) "Industrial facility" means any factory, mill, plant,
refinery, warehouse, buildings or complex of buildings located
within this state, including the land on which it is located, and
all machinery, equipment and other real and tangible personal
property located at or within such facility used in connection with
the operation of such facility in an industrial business.
(6) "Industrial revitalization" means capital investment in an
industrial facility located in this state to replace or modernize
buildings, equipment, machinery and other tangible personal
property used in connection with the operation of such facility in
an industrial business of the taxpayer, including the acquisition
of any real property necessary to the industrial revitalization.
(7) "Industrial expansion" means capital investment in a new
or expanded industrial facility in this state.
(8) "Industrial taxpayer" means any person subject to business
and occupation taxes under article thirteen of this chapter,
exercising any privilege taxable under section two-b or two-m of
said article thirteen, or providing a manufacturing service taxable
under section two-h of said article thirteen: Provided, That on
and after the first day of July, one thousand nine hundred eighty-seven, "industrial taxpayer" shall mean any person subject to tax
under section two-m, article thirteen of this chapter; or any
person subject to tax under article thirteen-a or twenty-three of
this chapter engaging in any activity that was taxable under
section two-b, article thirteen of this chapter, on the first dayof January, one thousand nine hundred eighty-five; or any person
taxable under article twenty-three of this chapter providing a
manufacturing service that was taxable under section two-h, article
thirteen of this chapter on the first day of January, one thousand
(9) "Management information services facility" means a
building, or any part thereof, or a complex of buildings, or any
part thereof, including the machinery and equipment located
therein, that is exclusively dedicated to providing management
information services to the owner or operator thereof or to another
(10) "Management information services" means, and is limited
to, data processing, data storage, data recovery and backup,
programming recovery and backup, telecommunications, computation
and computer processing, computer programming, electronic
information, and data management activities, or any combination of
such activities, when such activity, or activities, is not subject
to regulation by the West Virginia public service commission and
such activity, or activities, is for the purpose of managing,
planning for, organizing or operating, any industrial or commercial
business, or any enterprise, facility or facilities of an
industrial or commercial business, whether such industrial or
commercial business or enterprise, facility or facilities of an
industrial or commercial business is located within or without this
state and without regard to whether such industrial or commercialbusiness, or enterprise, facility or facilities of an industrial or
commercial business is owned by the provider of the management
information services or by a "related person", as defined in
Section 267(b) of the Internal Revenue Code of 1986, as amended.
(11) "Manufacturing service" means a privilege that would be
taxable under section two-b, article thirteen of this chapter, if
title to the raw materials used in the manufacturing process was
vested in the taxpayer exercising the privilege taxable under
section two-h of said article thirteen.
(12) Subject to subdivision (15) below, "property purchased
for an eligible research and development project" means real
property, and improvements thereto, and tangible personal property,
but only if such real or personal property is constructed or
purchased on or after the first day of July, one thousand nine
hundred eighty-five, for use as a component part of an eligible
research and development project which is located within this state
eighty-five. This term includes only tangible personal property
with respect to which depreciation or amortization, in lieu of
depreciation, is allowable in determining the personal income tax
or corporation net income tax liability of the purchaser under
article twenty-one or twenty-four of this chapter. Property
acquired by written lease for a term of ten years or longer, if
used as a component part of an eligible research and development
project, shall be included within this definition.
(13) Subject to subdivision (15) below, "property purchased
for industrial expansion" means real property, and improvements
thereto, and tangible personal property, but only if such property
was constructed, or purchased, on or after the first day of July,
one thousand nine hundred sixty-nine, for use as a component part
of a new or expanded industrial facility as defined in subdivision
(5) of this subsection located within this state. This term
includes only tangible personal property with respect to which
depreciation, or amortization in lieu of depreciation, is allowable
in determining the personal income tax or corporation net income
tax liability of the industrial taxpayer under articles twenty-one
or twenty-four of this chapter, and has a useful life, at the time
such property is placed in service or use in this state, of four
years or more. Property acquired by written lease, for a primary
term of ten years or longer, if used as a component part of a new
or expanded industrial facility, shall be included within this
(14) Subject to subdivision (15) below, "property purchased
for industrial revitalization" means real property, and
improvements thereto, and new tangible personal property, but only
if such property was constructed, or purchased, on or after the
first day of July, one thousand nine hundred eighty-one, for use as
a component part of an ongoing industrial facility as defined in
subdivision (5) of this subsection located within this state. This
term includes only tangible personal property with respect to whichdepreciation is allowable in determining the personal income tax or
corporation net income tax liability of the industrial taxpayer
under article twenty-one or twenty-four of this chapter, and has a
useful life at the time the property is placed in service or use in
this state of four years or more. Property acquired by written
lease for a primary term of ten years or longer, if used as a
component part of an industrial revitalization, shall be included
(15) "Property purchased for industrial expansion", "property
purchased for industrial revitalization", "property purchased for
an eligible research and development project", "property purchased
for a qualified housing development project" and "property
purchased or leased for a management information services facility"
shall not include:
(A) 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;
(B) Motor vehicles licensed by the department of motor
(C) Airplanes;
(D) Off-premise transportation equipment;
(E) Property which is primarily used outside this state; and
(F) Property which is acquired incident to the purchase of the
stock or assets of an industrial taxpayer, which property was or
had been used by the seller in his industrial business in thisstate, or which property was previously designated "property
purchased for industrial expansion", or "property purchased for
industrial revitalization", or "property purchased for an eligible
research and development project", or "property purchased for a
qualified housing development project", and used to qualify for
business and occupation tax credit for industrial expansion or
revitalization, or for an eligible research and development
project, or for a qualified housing development project, or
property which was subject to or gave rise to the management
information services facility credit in the hands of the
transferor, except that successors in business shall have successor
credit available pursuant to section seven of this article.
(16) Subject to subdivision (15) above, property purchased for
a qualified housing development project means real property, and
improvements thereto, and tangible personal property incorporated
into real property, whether or not attached thereto, but only if
such real or tangible personal property was constructed, or
purchased, on or after the first day of July, one thousand nine
hundred eighty-six, for use as a component part of a housing
development project, as defined in section five-a of this article,
located within this state.
(17) Subject to subdivision (15) above, "property purchased or
leased for a management information services facility" means
tangible personal property purchased from a West Virginia vendor in
West Virginia or leased through or from a West Virginia vendor fora primary lease term of three years or more. For purposes of this
section the term "tangible personal property" shall include
prewritten or "canned" computer software, "custom" software and
computer programming services which result in the production of
custom software: Provided, That the term "property purchased or
leased for a management information services facility" shall not
(A) Land or building or any part thereof whether leased or
(B) Natural resources in place;
(C) Property, 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;
(D) Property purchased or leased or placed in service or use
prior to the first day of April, one thousand nine hundred
ninety-one, or property purchased or leased or placed in service or
use after the thirty-first day of March, one thousand nine hundred
ninety-three; or
(E) Property purchased for use in a management information
services facility when such property is not purchased for the
purpose of either:
(i) Expanding an existing management information services
facility in West Virginia pursuant to a relocation or consolidation
of significant national, regional or international management
information services operation to West Virginia; or
(ii) Establishing in this state a management information
services facility that is new to West Virginia.
(18) Property shall be deemed to have been purchased prior to
a specified date only if:
(A) 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
taxpayer prior to the specified date;
(B) 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 such date;
(C) 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.
(19) "Taxpayer" means any person taxable under article
thirteen of this chapter: Provided, That on and after the first
day of July, one thousand nine hundred eighty-seven, "taxpayer"
shall mean any person taxable under article thirteen, thirteen-a or
twenty-three of this chapter.
WVC 11 - 13 D- 3 §11-13D-3. Amount of credit allowed for industrial expansion or
revitalization, for eligible research and
development projects, and for qualified housing
(a) Credit allowed. -- There shall be allowed to eligible
taxpayers a credit against the taxes imposed by article thirteen,
thirteen-a or twenty-three of this chapter, for industrial
expansion or revitalization, and for eligible research and
development projects and for qualified housing development
projects. The amount of credit shall be determined as hereinafter
(b) Qualified investment for industrial expansion; July 1,
1969 - March 31, 1978. -- For property purchased for industrial
expansion during the period beginning the first day of July, one
thousand nine hundred sixty-nine, and ending the thirty-first day
of March, one thousand nine hundred seventy-eight, the amount of
allowable credit shall be equal to ten percent of the qualified
investment (as determined in section four) made for industrial
expansion, and shall reduce the business and occupation tax
liability of the industrial taxpayer under article thirteen of this
chapter, subject to the following conditions and limitations:
(1) The amount of credit allowable shall be applied over a
ten-year period, at the rate of one tenth thereof per taxable year,
beginning with the taxable year in which the qualified investment
is first placed in service or use in this state.
(2) The amount of annual credit allowed shall not reduce the
business and occupation tax under article thirteen of this chapter,
below fifty percent of the amount which would be imposed for such
taxable year in the absence of this credit against tax, computed
before application of the annual exemption allowed by section
three, article thirteen of this chapter.
(3) No carryover to a subsequent taxable year or carryback to
a prior taxable year shall be allowed for the amount of any unused
portion of any annual credit allowance. Such unused credit shall
(c) Qualified investment for industrial expansion; April 1,
1978 - February 28, 1985. -- For property purchased for industrial
expansion during the period beginning the first day of March, one
thousand nine hundred seventy-eight, and ending the twenty-eighth
day of February, one thousand nine hundred eighty-five, the amount
of allowable credit shall be equal to ten percent of the qualified
liability of the industrial taxpayer under section two-b, two-h and
two-m, article thirteen of this chapter, subject to the following
business and occupation taxes imposed by section two, article
thirteen of this chapter, under sections two-b, two-h and two-m,
article thirteen of this chapter, below fifty percent of the amount
which would be imposed for such taxable year, in the absence of
this credit against tax, computed before application of the annual
exemption allowed by section three, article thirteen of this
chapter: Provided, That the tax under section two-h of said
article thirteen, shall not be reduced by more than fifty percent
of the tax attributable to the privilege of manufacturing for
another, which privilege would be taxable under section two-b of
said article thirteen, if title to the raw materials involved in
the manufacturing process were vested in the taxpayer exercising
the privilege taxable under section two-h of said article thirteen.
(d) Eligible investment for industrial revitalization; July 1,
1981 - February 28, 1985. -- For property purchased for industrial
revitalization during the period beginning the first day of July,
one thousand nine hundred eighty-one, and ending the twenty-eighth
of allowable credit shall be equal to ten percent of the eligible
investment (as determined under section four) made for industrialrevitalization, and shall reduce the business and occupation tax
under sections two-b and two-h, article thirteen of this chapter,
subject to the following conditions and limitations:
(1) The allowable credit shall be applied over a ten-year
period at the rate of one tenth of the amount thereof per taxable
year, beginning with the taxable year in which the eligible
investment is first placed in service or use in this state.
thirteen of this chapter, under sections two-b and two-h of said
article, below fifty percent of the amount which would be imposed
for the taxable year in the absence of this credit against tax,
computed before application of the annual exemption allowed by
section three, article thirteen of this chapter: Provided, That
the tax under section two-h of said article thirteen, shall not be
reduced by more than fifty percent of the tax attributable to the
privilege of manufacturing for another, which privilege would be
taxable under section two-b of said article thirteen, if title to
the raw materials involved in the manufacturing process were vested
in the taxpayer exercising the privilege taxable under section two-h of said article thirteen.
(3) When in any taxable year the eligible industrial taxpayer
is entitled to claim credit under both this subsection (d) and
under subsections (b) or (c), or both, of this section, the total
amount of all credits allowed under this section shall not exceedthe fifty percent rule outlined in paragraph (2) of this subsection
(4) No carryover to a subsequent taxable year or carryback to
portion of any annual credit allowance. Any unused credit shall be
(5) No credit shall be allowed under this section for any
property purchased for industrial revitalization prior to the first
day of July, one thousand nine hundred eighty-one.
(e) Eligible investment for industrial expansion or
revitalization after February 28, 1985. -- For property purchased
for industrial expansion or industrial revitalization on or after
the first day of March, one thousand nine hundred eighty-five, the
amount of allowable credit shall be equal to ten percent of the
eligible investment (as determined in section four) made for
industrial expansion or industrial revitalization, and shall reduce
the business and occupation tax imposed under article thirteen of
this chapter subject to the following conditions and limitations:
ten-year period, at the rate of one-tenth thereof per taxable year,
beginning with the taxable year in which the eligible investment is
first placed in service or use in this state.
business and occupation taxes imposed by article thirteen of this
chapter, below fifty percent of the amount which would be imposedfor such taxable year in the absence of this credit against tax,
section three, article thirteen of this chapter.
(3) When in any taxable year the industrial taxpayer is
entitled to claim credit under this subsection (e) and under
subsections (b), (c) or (d) of this section (or any combinations
thereof), the total amount of all credits allowed under this
section shall not exceed the fifty percent rule outlined in
paragraph (2) of this subsection (e).
(5) When in any taxable year the industrial taxpayer is
entitled to claim credit under this article and article thirteen-e
of this chapter, the total amount of all such credits allowable for
the taxable year shall not reduce the amount of business and
occupation taxes imposed by article thirteen of this chapter, below
fifty percent of the amount which would be imposed for such taxable
year, computed before allowance of the annual exemption allowed by
(6) No credit shall be allowed under this subsection (e) or
any property purchased on or after the first day of March, one
thousand nine hundred eighty-five, for which credit is allowed
under article thirteen-c of this chapter.
(7) No credit shall be allowed under this subsection (e) or
any property purchased for industrial expansion or industrial
revitalization prior to the first day of March, one thousand nine
hundred eighty-five.
(f) Eligible investment for research and development project
after June 30, 1985. -- For property and services purchased for an
eligible research and development project on or after the first day
of July, one thousand nine hundred eighty-five, the amount of
allowable credit shall be equal to ten percent of the eligible
investment (as determined in section five) made for an eligible
research and development project, and shall reduce the business and
occupation taxes under sections two-a, two-b, two-m, article
thirteen of this chapter, subject to the following conditions and
investment is first placed in service or use in this state, or is
expensed for federal income tax purposes.
thirteen of this chapter, under section two-a of said article, on
the business of producing natural resources; under section two-b of
said article thirteen, on the business or manufacturing,
compounding or preparing tangible personal property for sale; undersection two-h of said article thirteen on the providing of a
manufacturing service; and under section two-m of said article
thirteen, on the business of generating electric power, below fifty
percent of the amount which would be imposed for the taxable year
in the absence of this credit against tax, computed before
application of the annual exemption allowed by section three,
article thirteen of this chapter.
(3) When in any taxable year the eligible taxpayer is entitled
to claim credit under both this subsection (f) and subsections (b),
(c), (d) or (e) of this section (or any combinations thereof), the
total amount of all credits allowed under this section shall not
exceed the fifty percent rule outlined in paragraph (2) of this
(4) No carryover to a subsequent tax year or carryback to a
prior taxable year shall be allowed for the amount of any unused
(5) No credit shall be allowed under this subsection (f) for
any property purchased for an eligible research and development
project, when such property is used to determine the eligible
investment under section four of this article, or determine the
amount of credit allowable under article thirteen-c of this
(6) No credit shall be allowed under this subsection (f) for
any property purchased for research and development prior to thefirst day of July, one thousand nine hundred eighty-five.
(g) Eligible investment for qualified housing development
project after June 30, 1986. -- For property and services purchased
for a qualified housing development project on or after the first
day of July, one thousand nine hundred eighty-six, the amount of
investment (as determined in section five-a) made for a qualified
housing development project, and shall reduce the business and
occupation taxes under sections two-c and two-e, article thirteen
of this chapter, subject to the following conditions and
year, beginning with the taxable year in which any combination of
residential housing units (as defined in section five-a of this
article) available for occupancy or occupied in the qualified
housing development project is five or more residential housing
thirteen of this chapter, under section two-c of said article on
the business of selling tangible property and under section two-e
on the business of contracting below fifty percent of the amount
which would be imposed for the taxable year in the absence of this
credit against tax, computed before application of the annualexemption allowed by section three, article thirteen of this
to claim credit under both this subsection (g) and subsections (b),
(c), (d), (e) or (f) of this section (or any combinations thereof),
the total amount of all credits allowed under this section shall
not exceed the fifty percent rule outlined in paragraph (2) of this
(5) No credit shall be allowed under this subsection (g) for
any property purchased for an eligible housing development project,
when such property is used to determine the eligible investment
under section four of this article, or determine the amount of
credit allowable under article thirteen-c of this chapter.
(6) No credit shall be allowed under this subsection (g) for
(h) Credit limitation. -- The aggregate amount of credit
allowable under this article and article thirteen-e of this
chapter, against the taxes imposed by article thirteen of thischapter for the taxable year, shall in no event exceed fifty
percent of the tax due for the taxable year, computed prior to
application of the tax credits provided by this article and
articles thirteen-c and thirteen-e of this chapter, and the annual
exemption allowed provided by section three, article thirteen of
(i) Application of credit after June 30, 1987. -- On and after
the first day of July, one thousand nine hundred eighty-seven, the
credits allowed under subsections (b), (c), (d), (e), (f) and (g)
of this section shall be applied to and reduce the taxes imposed by
articles thirteen, thirteen-a and twenty-three of this chapter: Provided, That this credit shall not reduce the sum of the net tax
liability of the taxpayer under articles thirteen, thirteen-a and
twenty-three of this chapter, for the taxable year below fifty
percent of the amount thereof, determined before application of the
credits allowed by this article and article thirteen-c or
thirteen-e, or both, of this chapter.
WVC 11 - 13 D- 3 A
§11-13D-3a. Application of credit after June 30, 1987.
On and after the first day of July, one thousand nine hundred
eighty-seven, the credits allowed under section three shall be
applied to and reduce the taxes imposed by articles thirteen,
thirteen-a, fifteen, fifteen-a and twenty-three of this chapter: Provided, That this credit shall not reduce the sum of the net tax
twenty-three of this chapter, or under articles fifteen and
fifteen-a of this chapter on purchases directly used or consumed in
taxpayer's qualified investment activity, for the taxable year
below fifty percent of the amount thereof, determined before
application of the credits allowed by this article and article
thirteen-c or thirteen-e, or both, of this chapter.
WVC 11 - 13 D- 3 B
§11-13D-3b. Application of credit after June 30, 1989.
For taxable years ending on and after the first day of July,
one thousand nine hundred eighty-nine, the credits allowed under
section three shall continue to be applied as provided in section
three-a. In addition, the credit allowed under subsection (f) of
section three that remains after its application as provided in
section three-a of this article shall be applied to reduce the tax
imposed by article twenty-four of this chapter: Provided, That
this credit may not reduce by more than fifty percent the amount of
the net tax liability of the taxpayer for the taxable year under
article twenty-four of this chapter, which amount of net tax
liability shall be determined before application of the credit
allowed by article thirteen-c of this chapter.
WVC 11 - 13 D- 3 C
§11-13D-3c. Amount of credit allowed and application of credit
for qualified investment in a management
taxpayers a credit against the taxes imposed by articles twenty-three and twenty-four of this chapter for qualified investment in
a management information services facility. The amount of credit
shall be determined as hereinafter provided in this section.
(b) Investment period limitations subject to extension upon
legislative amendment. -- It is the finding of the Legislature that
certain tax credits heretofore enacted have not effectively
fulfilled the intended legislative purpose of increasing employment
and economic growth and development in this state. Therefore, the
time period over which qualified investment property may be
purchased or leased and placed in service or use by eligible
taxpayers at a management information services facility is
expressly limited, for purposes of this credit, to two years under
paragraph (C), subdivision (17), subsection (b), section two of
this article, subsection (c) of this section, and paragraph (B),
subdivision (6), subsection (c), section five-b of this article. If the Legislature subsequently finds that this credit for a
management information services facility effectively fulfills the
legislative purpose for which it was enacted, the Legislature may,
in its discretion, extend, by statutory amendment, the time period
over which qualified investment may be purchased, or leased, andplaced in service or use.
(c) Credit amount for qualified investment purchased and
placed in service or use in a management information services
facility after the thirty-first day of March, one thousand nine
hundred ninety-one and prior to the first day of April, one
thousand nine hundred ninety-three. -- For property purchased or
leased by an eligible taxpayer and placed in service or use after
the thirty-first day of March, one thousand nine hundred ninety-one, and prior to the first day of April, one thousand nine hundred
ninety-three, for use as a component part of a management
information services facility, the amount of allowable credit shall
be equal to one hundred percent of the qualified investment, as
determined under section five-b of this article, and shall reduce
the business franchise tax under article twenty-three of this
chapter and the corporation net income tax under article
twenty-four of this chapter, subject to the following conditions
(1) Tax year time limitations for application of credit,
credit forfeiture. --
(A) The amount of this credit allowable shall be applied over
a time period of up to ten tax years.
(B) This credit shall first be applied against the tax
liabilities in the manner specified in subdivision (2) of this
subsection (c) beginning with the tax year during which the
qualified investment was first placed in service or use in thisstate by the eligible taxpayer.
(C) Any amount of this credit remaining after application of
this credit against tax as specified in paragraph (B) of this
subdivision (1) shall then be applied against the tax liabilities
in the manner specified in subdivision (2) of this subsection (c)
for the tax year immediately succeeding the tax year during which
the qualified investment was first placed in service or use in this
state and for each succeeding tax year thereafter up through the
ninth tax year subsequent to the first tax year in which the
qualified investment property was first placed in service or use.
(D) Any amount of this credit remaining after application of
this credit against tax as specified in paragraph (B) and then
paragraph (C) of this subdivision shall be forfeited and shall not
carry forward to any subsequent tax year.
(E) No carryback of credit to a prior tax year shall be
(2) Tax liability percentage offset limitations. --
(A) This credit for qualified investment in a management
information services facility shall first be applied to reduce the
annual West Virginia business franchise tax liability imposed under
article twenty-three of this chapter for the tax year by an amount
such that this credit, in combined application with all other
applicable credits allowable under articles thirteen-c, thirteen-d
and thirteen-e of this chapter and under chapter five-e of this
code and all other tax credits provided in this code, shall notreduce the annual business franchise tax liability for such tax
year below fifty percent of the amount of the annual tax liability
which would otherwise be imposed for such tax year in the absence
of this credit and all credits against such tax, except the credits
set forth in section seventeen, article twenty-three of this
(B) After application of this credit against business
franchise tax as provided in paragraph (A) of this subdivision (2),
remaining credit for qualified investment in a management
information services facility, if any, shall then be applied to
reduce the annual West Virginia corporation net income tax
liability imposed under article twenty-four of this chapter for the
tax year by an amount such that this credit in combined application
with all other applicable credits allowable under articles
thirteen-c, thirteen-d, thirteen-f and thirteen-g of this chapter
and under sections ten, eleven, eleven-a, twelve, twenty-two and
twenty-three-a, article twenty-four of this chapter and under
chapters five-e and eighteen-b of this code and all other tax
credits provided in this code, shall not reduce the annual
corporation net income tax liability for such tax year below fifty
percent of the amount of the annual tax liability which would
otherwise be imposed for such tax year in the absence of this
credit and all other credits against tax, except the credits set
forth in sections nine and nine-a, article twenty-four of this
(C) After application of this credit against business
franchise tax under paragraph (A) of this subdivision (2), and then
against corporation net income tax under paragraph (B) of this
subdivision (2); remaining credit for qualified investment in a
management information services facility, if any, shall then be
applied to further reduce the annual West Virginia business
franchise tax liability imposed under article twenty-three of this
chapter for the tax year by an amount such that this credit shall
not reduce the annual business franchise tax liability for such tax
year below ten percent of the amount of the annual tax liability
of this credit and all other credits against such tax, except the
credits set forth in section seventeen, article twenty-three of
(D) After application of this credit against business
franchise tax under paragraph (A) of this subdivision (2) and then
subdivision (2), and then against business franchise tax under
paragraph (C) of this subdivision (2); remaining credit for
qualified investment in a management information services facility,
if any, shall then be applied to further reduce the annual West
Virginia corporation net income tax liability imposed under article
twenty-four of this chapter for the tax year by an amount such that
this credit shall not reduce the annual corporation net income tax
liability for such tax year below ten percent of the amount of theannual tax liability which would otherwise be imposed for such tax
year in the absence of this credit and all other credits against
such tax, except the credits set forth in sections nine and nine-a,
article twenty-four of this chapter.
(d) Maximum annual credit allowance. -- (1) Notwithstanding
any other provision of this section, no taxpayer may take or apply
more than one million dollars of this credit against all taxes, in
the aggregate, against which this credit may apply in any taxable
year, and no related person or persons as defined in Section 267(b)
of the Internal Revenue Code of 1986, as amended, may, in the
aggregate, take or apply more than one million dollars of this
credit against all taxes, in the aggregate, against which this
credit may apply in any taxable year.
(2) Notwithstanding any other provision of this section, the
total amount of credit certified under this subsection (e) for all
taxpayers shall not exceed five million dollars per year. The tax
commissioner shall allocate this credit to eligible taxpayers in
the order that such taxpayers are certified under subsection (e) of
this section: Provided, That no taxpayer or any related person to
such taxpayer (as amended in section 267(b) of the Internal Revenue
Code of 1986, as amended), shall be allocated more than five
(e) Certification of credit required. --
(1) Application required. -- No credit shall be allowed or
applied under this section for any investment in any managementinformation services facility until the person asserting a claim
for the allowance of credit under this article makes written
application to the tax commissioner for allowance of credit as
provided in this section and receives written certification of its
claim from the tax commissioner. An application for credit shall
be filed, in such form as the tax commissioner shall prescribe,
prior to the first date when qualified investment property is first
placed in service or use, and whether such property will be placed
in service during the same tax year or over a period of two or more
successive tax years. All information required by such form shall
be provided. No credit shall be taken by a taxpayer applicant or
prospective applicant pursuant to this section and the exemption
from tax set forth under subsection (nn), section nine, article
fifteen of this chapter shall not be available to a taxpayer
applicant or prospective applicant until certification has been
issued by the tax commissioner.
(2) Failure to file. -- The failure to timely apply for
certification under this subsection (e) shall result in the
forfeiture of the credit otherwise allowable under this section.
(f) Forfeiture for reductions of employment. --
(1) With the annual return for the tax imposed by article
twenty-three of this chapter filed for the taxable year in which
the qualified investment is first placed in service or use in this
state, and for each succeeding taxable year thereafter during which
the taxpayer seeks to apply this credit against tax, the taxpayershall file a statement with the tax commissioner certifying that no
West Virginia jobs have been lost or terminated and no decrease of
working hours or layoffs of employees holding West Virginia jobs
have resulted from the making of the qualified investment upon
which this credit is based or from the establishment or operation
of the management information services facility upon which this
credit is based.
(2) The taxpayer shall forfeit all annual credit otherwise
available under this section during any year when West Virginia
jobs have been lost or terminated or decreases of working hours or
layoffs of employees holding West Virginia jobs have occurred as a
result of the making of the qualified investment upon which this
credit is based or the establishment or operation of the management
information services facility upon which this credit is based, and
the exemption from tax set forth in subsection (nn), section nine,
article fifteen of this chapter shall not be available to the
taxpayer during such year of forfeiture.
(3) The tax commissioner shall conduct such audits or reviews
of each taxpayer in any year a credit is asserted under this
section to verify the accuracy of a taxpayer's statement certifying
that no West Virginia jobs have been lost or terminated and that no
decrease of working hours or layoffs of employees holding West
Virginia jobs have resulted from the making of qualified
investments upon which this credit is based or from the
establishment or operation of the management information servicesfacility upon which this credit is based. Such audits shall also
verify that all other requirements applicable to the allowance
under a credit under this section continue to be met by the
(g) Information disclosure. -- Providing that such disclosure
can be made without directly or indirectly revealing the amount of
credit available to any particular taxpayer or taxpayer return
information other than the name and address of the taxpayer, and
notwithstanding any other provision of this code to the contrary,
the tax commissioner shall publish in the state register the name
and address of every taxpayer receiving this credit allowed under
this section by the thirty-first day of December, one thousand nine
hundred ninety-two, and annually thereafter by the thirty-first day
of December of each year. The tax commissioner shall publish in
the state register the amount of the credit asserted, by amount
category, for each taxpayer asserting such credit. The categories
by dollar amount of credit received shall be as follows:
(1) More than $1.00 but not more than $50,000;
(2) More than $50,000 but not more than $100,000;
(3) More than $100,000 but not more than $250,000;
(4) More than $250,000 but not more than $500,000; and
(5) More than $500,000 but not more than $1,000,000.
(h) Report by the governor's office of community and
industrial development. -- The governor's office of community and
industrial development shall produce a report to the Legislature tobe presented during the regular legislative session of one thousand
nine hundred ninety-two. Such report shall state the identity of
taxpayers who have received this management information services
facility credit, and shall contain an analysis of the expansion and
growth of management information services facilities in the state
of West Virginia, the expansion of commerce resulting from the
creation of this credit, and the number of jobs created as a result
of this credit. The report of the governor's office of community
and industrial development shall not directly or indirectly reveal
the amount of credit available to any particular taxpayer or
taxpayer return information other than the names and addresses of
WVC 11 - 13 D- 3 D
§11-13D-3d. Amount of credit allowed and application of credit
for qualified investment in a new industrial
facility producing coal-based liquids used to
produce synthetic motor fuel or synthetic special
taxpayers which have made qualified investment of at least ten
million dollars in a new industrial facility for producing coal-based liquids used to produce synthetic motor fuel or synthetic
special fuel a credit against the taxes imposed by articles twenty-three and twenty-four of this chapter for qualified investment in
a new industrial facility for producing coal-based liquids used to
produce synthetic motor fuel or synthetic special fuel. The amount
of credit shall be determined as hereinafter provided in this
section. Taxpayers who have not placed at least ten million
dollars of qualified investment in service or use over a period of
one year or less in a new industrial facility used to produce
synthetic motor fuel or synthetic special fuel shall not be
entitled to credit under this section.
(b) Credit amount for qualified investment purchased and
placed in service or use in a new industrial facility for producing
coal-based liquids used to produce synthetic motor fuel or
synthetic special fuel, after the thirtieth day of June, one
thousand nine hundred ninety-one. -- For property purchased or
leased by an eligible taxpayer and placed in service or use afterthe thirtieth day of June, one thousand nine hundred ninety-one, as
part of a new industrial facility for producing coal-based liquids
used to produce synthetic motor fuel or synthetic special fuel the
amount of allowable credit shall be equal to one hundred percent of
the qualified investment (as determined under section four of this
article), and shall reduce that portion of the taxpayer's business
franchise tax under article twenty-three of this chapter, which is
attributable to and the direct result of the taxpayer's qualified
investment, and that portion of the taxpayer's corporation net
income tax under article twenty-four of this chapter, which is
investment; subject to the following conditions and limitations:
(1) The total amount of credit allowable to all persons
claiming credit under this section shall not exceed ten million
dollars during any fiscal year of this state. If and to the extent
credit is claimed under this section in excess of ten million
dollars in any fiscal year of this state the amount in excess of
ten million dollars is lost. In determining which taxpayer or
taxpayers loses credit under this subdivision (1), the loss of
credit shall apply first to qualified investment property most
recently placed in service or use, going backwards in time, until
the tax commissioner determines that the total amount of credit
allowed under this section is not in excess of ten million dollars.
(2) The qualified investment must result in the creation of at
least ten new jobs.
(3) If, during any taxable year of the ten year tax credit
allowance period, the average number of employees of the taxpayer,
for the then current taxable year, employed in positions created
because of and directly attributable to the qualified investment
property is less than ten, the credit allowance for that taxable
year is forfeited.
(4) Tax year time limitations for application of credit;
credit forfeiture.
(B) This credit shall first be applied against tax liabilities
in the manner specified in subdivision (5) of this subsection (b),
beginning with the tax year during which the qualified investment
was first placed in service or use in this state by the eligible
this credit against tax as specified in paragraph (A) of
subdivision (5) of this subsection (b) shall then be applied
against the tax liabilities in the manner specified in paragraph
(B), subdivision (5) of this subsection (b) for the tax year
immediately succeeding the tax year during which the qualified
investment was first placed in service or use in this state and for
each succeeding tax year thereafter up through the ninth tax year
subsequent to the first tax year in which the qualified investment
property was first placed in service or use.
this credit against tax as specified in subdivision (5) of this
subsection (b) shall be forfeited and shall not carry forward to
any subsequent tax year.
(5) Tax liability percentage offset limitations.
(A) This credit for qualified investment in a new industrial
facility for producing coal-based liquids used to produce synthetic
motor fuel or synthetic special fuel shall first be applied to
reduce the annual West Virginia business franchise tax liability
imposed under article twenty-three of this chapter for the tax year
by an amount such that this credit, in combined application with
all other applicable credits allowable under articles thirteen-c,
thirteen-d and thirteen-e of this chapter and under chapter five-e
of this code and all other tax credits provided in this code, shall
franchise tax as provided in paragraph (A) of this subdivision (5),
the remaining credit for qualified investment in a new industrialfacility for producing coal-based liquids used to produce synthetic
motor fuel or synthetic special fuel (if any) shall then be applied
to reduce the annual West Virginia corporation net income tax
credits as provided in this code, shall not reduce the annual
franchise tax under paragraph (A) of this subdivision (5), and then
subdivision (5), the remaining credit for qualified investment in
produce synthetic motor fuel or synthetic special fuel (if any)
shall then be applied to further reduce the annual West Virginia
business franchise tax liability imposed under article twenty-threeof this chapter for the tax year by an amount such that this credit
shall not reduce the annual business franchise tax liability for
such tax year below ten percent of the amount of the annual tax
liability which would otherwise be imposed for such tax year in the
absence of this credit and all other credits against such tax,
except the credits set forth in section seventeen, article
franchise tax under paragraph (A) of this subdivision (5) and then
subdivision (5), and then against business franchise tax under
paragraph (C) of this subdivision (5), the remaining credit for
qualified investment in a new industrial facility for producing
synthetic special fuel (if any) shall then be applied to further
tax year by an amount such that this credit shall not reduce the
annual corporation net income tax liability which would otherwise
be imposed for such tax year in the absence of this credit and all
other credits against such tax, except the credits set forth in
sections nine and nine-a, article twenty-four of this chapter.
(c) Application for credit required.
applied under this section for any investment in any new industrialfacility for producing coal-based liquids used to produce synthetic
motor fuel or synthetic special fuel until the person asserting a
claim for the allowance of credit under this article makes written
prior to the date when qualified investment property is first
placed in service or use, and all information required by such form
shall be provided. No credit shall be taken by a taxpayer
applicant or prospective applicant pursuant to this section until
certification has been issued by the tax commissioner.
certification under this subsection (c) shall result in forfeiture
of the credit otherwise allowable under this section.
(d) Definitions. -- For purposes of this section:
(1) "Synthetic motor fuel" means any product suitable for use
in an internal combustion engine except special fuel as defined in
this section, containing at least ten percent coal-based liquids
blended to meet specifications.
(2) "Synthetic special fuel" means special fuel containing at
least ten percent coal-based liquids blended to meet
(e) Report by the governor's office of community and
industrial development. -- The governor's office of community andindustrial development shall produce a report to the Legislature to
be presented during the regular legislative session of one thousand
nine hundred ninety-three and annually thereafter. Such report
shall state the identity of taxpayers who have received this credit
and shall contain an analysis of the expansion and growth of
facilities in this state producing coal-based liquids used to
produce synthetic fuels, the expansion of commerce resulting from
the creation of this credit, and the number of jobs created as a
result of this credit. The report of the governor's office of
community and industrial development shall not directly or
indirectly reveal the amount of credit available to any particular
taxpayer or taxpayer return information other than the names and
addresses of taxpayers.
WVC 11 - 13 D- 3 E
§11-13D-3e. Application of credit after June 30, 1993.
contrary, for taxable years ending on and after the first day of
July, one thousand nine hundred ninety-three, the credits allowed
under section three may not be applied to reduce the taxes imposed
by articles fifteen and fifteen-a of this chapter: Provided, That
this section shall not apply to credits allowed under subsection
(g), section three of this article for qualified housing
development projects existing in this state on or before the first
day of July, one thousand nine hundred ninety-two.
WVC 11 - 13 D- 3 F
§11-13D-3f. Amount of credit allowed and application of credit for
qualified investment in an aerospace industrial facility.
(a) Credit allowed. -- (1) There is allowed to eligible
taxpayers which have made qualified investment in an aerospace
industrial facility, a credit against the taxes imposed by articles
twenty-three and twenty-four of this chapter for qualified
investment in an aerospace industrial facility. The amount of
credit is determined as provided in this section.
(2) There is allowed to members, distributive interest holders
and partners of eligible taxpayers described in paragraph (3),
subsection (c) of this section, a credit against the taxes imposed
by article twenty-four of this chapter for qualified investment in
an aerospace industrial facility. The amount of credit is
determined as provided in this section.
(b) Credit amount for qualified investment in property placed
in service or use in an aerospace industrial facility after the
thirtieth day of June, one thousand nine hundred ninety-eight. --
For property purchased or leased by an eligible taxpayer and placed
in service or use after the thirtieth day of June, one thousand
nine hundred ninety-eight, as part of an aerospace industrial
facility, the amount of allowable credit is equal to fifteen
percent of the qualified investment (as determined under subsection
(e) of this section), and reduces the taxpayer's annual business
franchise tax liability under article twenty-three of this chapter and the taxpayer's annual corporation net income tax liability
under article twenty-four of this chapter, subject to the following
(1) The amount of credit allowable is applied over a ten-year
period, at the rate of one-tenth thereof per taxable year,
is first placed in service or use in this state. (2) When in any taxable year a taxpayer is entitled to claim
credit under this section and under any other section of this
article, (or any combination thereof), the total amount of all
credits allowed for the tax year under this article shall not
exceed the sixty percent of total tax liability offset limitations
set forth in subsection (c) of this section. (3) No carryover to a subsequent taxable year or carryback to
a prior taxable year is allowed for any unused portion of any
annual credit allowance. Such unused credit is forfeited. (4) No credit is allowed under this article for investment in
any property for which credit is allowed under article thirteen-c
of this chapter. (5) No credit is allowed under this section for investment in
any property for which credit is allowed under any other section of
this article. (c) Application of credit. -- (1) The annual credit for
qualified investment in an aerospace industrial facility is first applied to reduce the annual West Virginia business franchise tax liability imposed under article twenty-three of this chapter for
the tax year. The amount of annual credit allowed may not reduce
the annual liability for such tax year below sixty percent of the
amount of the annual tax liability which would otherwise be imposed
for such tax year in the absence of this credit and in the absence
of all other credits against such tax, except the credits set forth
in section seventeen, article twenty-three of this chapter. (2) After application of this credit against business
franchise tax as provided in subdivision (1) of this subsection,
the remaining annual credit, if any, is then applied to reduce the
annual West Virginia corporation net income tax liability imposed
under article twenty-four of this chapter for the tax year. The
amount of annual credit allowed may not reduce the annual
corporation net income tax liability for such tax year below sixty
credit and in the absence of all other credits against tax. (3) In the case of an eligible taxpayer that: (A) Is a limited liability company, partnership or other
business organization taxed under article twenty-three of this
chapter, but not taxed under article twenty-four of this chapter, (B) Is not treated as a corporation for federal income tax
(C) Is a "flow through" entity or conduit for income
distributed to members, distributional interest holders or partners, the following applies: Members, distributional interest
holders or partners, of the eligible taxpayer subject to the
corporation net income tax imposed under article twenty-four of
this chapter may apply this credit against that portion of their
annual corporation net income tax liability imposed under article
twenty-four of this chapter for the tax year on that distributive
income directly and solely derived from the eligible taxpayer. The
credit and in the absence of all other credits against tax.
(d) Definitions. -- For purposes of this section: (1) "Aerospace industrial facility" means a facility used by
an eligible taxpayer for the manufacturing, rebuilding or physical
refurbishment of:
(A) Aircraft,
(B) Aircraft engines,
(C) Aircraft engine parts,
(D) Other aircraft parts,
(E) Aircraft auxiliary equipment, including fluid power
aircraft subassemblies,
(F) Guided missiles,
(G) Space vehicles,
(H) Guided missile and space vehicle propulsion units,
(I) Guided missile parts,
(J) Propellers,
(K) Space vehicle parts, or
(L) Guided missile and space vehicle auxiliary parts.
(2) "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 of the
voting power of all classes of stock of each of the corporations is
owned directly or indirectly by one or more of the corporations;
and the common parent owns directly stock possessing at least fifty
percent of the voting power of all classes of stock of at least one
of the other corporations. (3) "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, and any
organization which is treated as a corporation for federal income
tax purposes. (4) "Eligible taxpayer" means, for purposes of this section,
a person subject to tax under article twenty-three or article
twenty-four of this chapter, and regularly engaged in the business
of manufacturing, rebuilding or physical refurbishment of:
The term "eligible taxpayer" does not include any person whose
only activity with respect to an aerospace industrial facility is
to lease it to another person or persons. (5) "Placed in service or use." For purposes of the credit
allowed by this section, property shall be considered "placed in
service or use" on the earliest of the following dates: (A) The date on which the property is physically placed in
service or use in an aerospace industrial facility;
(B) The closing date of the eligible taxpayer's federal income
tax year during which federal income tax depreciation with respect
to the property has begun, or in the case of leased property, the
closing date of the eligible taxpayer's federal income tax year
during which expenses for lease payments for the property are first
taken as a deduction from income for federal income tax purposes;
or (C) The closing date of the eligible taxpayer's federal income
tax year during which the property is placed in a condition or
state of readiness and availability for a specifically assigned
function in an aerospace industrial facility, but where the
property has not been physically placed in service or use in the
aerospace industrial facility on that closing date. (e) Qualified investment in an aerospace industrial facility.
-- (1) Purchased property. -- The qualified investment in tangible
personal property or real property purchased for use as a component
part of an aerospace industrial facility is the applicable
percentage of the cost of such property purchased for an aerospace
industrial facility, which is placed in service or use in this
state, by the eligible taxpayer during the tax year as determined
under this section. (2) Applicable percentage. -- For the purposes of this
subsection, the applicable percentage for any property shall be
determined under the following table: If useful life is:
4 years or more but less than 6 years33 1/3%
6 years or more but less than 8 years66 2/3%
The useful life of any property for purposes of this section shall
be the actual economic useful life determined as of the date such property is first placed in service or use in this state by the
taxpayer, determined for financial accounting purposes in
accordance with generally accepted principles of accounting. (3)(A) Cost. -- For purposes of this subsection, the cost of
each item of property purchased for use as a component part of an
aerospace industrial facility shall be the fair market value or the
actual cost, whichever is less, and in no event shall the cost
exceed the fair market value as of the date such property is first
placed in service or use in this state by the eligible taxpayer.
Cost is determined under the following rules: (B) Trade-ins. -- Cost does not include the value of property
given in trade or exchange for the property purchased for use as a
component part of an aerospace industrial facility. (C) Damaged, destroyed or stolen property. -- If property is
insurance proceeds received in compensation for the loss. (4) Rental property. -- (A) The qualified investment in
tangible personal property or real property leased for use as a
component part of an aerospace industrial facility is the portion
specified in this subdivision of the cost of such property
purchased for an aerospace industrial facility, which is placed in
service or use in this state, by the eligible taxpayer during the
tax year as determined under this section. (B) The qualified investment in leases of real property acquired by written lease for a primary term of ten years or longer
is one hundred percent of the rent reserved for the primary term of
the lease, not to exceed twenty years. Leases of realty having a
primary term of less than ten years do not qualify for purposes of
(C) The qualified investment in leases of tangible personal
property acquired by written lease for a primary term of: (i) Four years, or longer, is one third of the rent reserved
for the primary term of the lease; (ii) Six years, or longer, is two thirds of the rent reserved
for the primary term of the lease; or (iii) Eight years, or longer, is one hundred percent of the
rent reserved for the primary term of the lease, not to exceed
twenty years: Provided, That in no event does rent reserved
include rent for any year subsequent to expiration of the book life
of the property, determined using the straight-line method of
depreciation. (5) Transferred property. -- (A) The cost of property owned
and used by the taxpayer out-of-state and then brought into this
state, is determined based on the remaining useful life of the
property at the time it is placed in service or use in this state,
and the cost is the original cost of the property to the taxpayer
less straight line depreciation allowable for the tax years or
portions thereof taxpayer used the property outside this state.
(B) In the case of leased tangible personal property, cost is based on the period remaining in the primary term of the lease
after the property is brought into this state for use in an
aerospace industrial facility of an eligible taxpayer, and is the
rent reserved for the remaining period of the primary term of the
lease, not to exceed twenty years, or the remaining useful life of
the property, whichever is less.
(C) Qualified investment in transferred property is computed
by applying the four-year, six-year and eight-year requirements of
this section to the cost thereof with the applicable four year, six
year and eight year period determined based on the remaining useful
life or remaining primary lease term at the time the property is
placed in service or use in this state.
(6) Property purchased for multiple use. -- Investment in
property purchased for use in an aerospace industrial facility and
for some other use does not qualify for purposes of this credit. (7) Self-constructed property. -- In the case of
charged to the capital account for purposes of depreciation for
federal income tax purposes. (8) Specific exclusions from qualification. -- The following
investment does not constitute qualified investment in an aerospace
industrial facility, and does not qualify for purposes of this
(A) Investment by purchase or lease in natural resources in
(B) Investment in purchased or leased property, 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 which can be quantified or
minimum annual rent which can be quantified, the amount thereof
shall be used to determine the cost thereof. If the property and
lease otherwise qualify under the primary lease term requirements
and other requirements of this section for property purchased or
leased for use as a component part of an aerospace industrial
facility, then qualified investment in such property is determined
in accordance with the four-year, six-year and eight-year useful
life or primary lease term requirements of this subsection. (C) Investment in property purchased, or leased, or placed in
service or use prior to the first day of July, one thousand nine
hundred ninety-eight. (D) Investment in the purchase, acquisition or transfer of any
facility or component thereof that was in service or use during the
ninety days immediately prior to transfer of the title to such
facility or component thereof, or to the commencement of the term
of the lease of such facility or component thereof, unless upon
application of the taxpayer, setting forth good and sufficient
cause, the tax commissioner consents to waiving this ninety-day
period. (E) Investment in any facility or component part thereof that was acquired by the taxpayer from a related person. The tax
commissioner may waive this requirement if the facility was
acquired from a related party for its fair market value, and the
basis of the property for federal income tax purposes, in the hands
of the person acquiring it, is not determined: (i) 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 (ii) Under Section 1014(e) of the United States Internal
Revenue Code of 1986, as amended, and in effect on the first day of
January, one thousand nine hundred ninety-eight. (F) Investment in or cost incurred for property owned or
leased by the taxpayer and for which credit was previously taken
under article thirteen-c, article thirteen-d or thirteen-e of this
chapter: Provided, That this paragraph shall not be construed to
prevent the transfer of this credit in the event of a mere change
in the form of doing business of an eligible taxpayer, or transfer
of credit to successors in business in accordance with section
seven of this article.
(G) Repair costs, including costs or materials used in the
repair, unless for federal income tax purposes, the cost of the
repair must be capitalized. (H) Investment in airplanes.
(I) Investment in property which is primarily used outside
this state. (J) Investment in property acquired incident to the purchase
of a corporation, business organization or ongoing business or a
substantial portion thereof through transfer of stock, ownership
interests or assets thereof, or any other transfer, merger or
purchase, unless for good cause shown, the tax commissioner
consents to waiving this requirement: Provided, That this
paragraph shall not be construed to prevent the transfer of this
credit in the event of a mere change in the form of doing business
of an eligible taxpayer, or transfer of credit to successors in
business in accordance with section seven of this article.
(K) Investment in property acquired from a person whose
United States Internal Revenue Code of 1986, as amended, and in
effect on the first day of January, one thousand nine hundred
ninety-nine. (L) Investment in property acquired by one component member of
a controlled group from another component member of the same
controlled group: Provided, That, the tax commissioner can waive
this requirement if the property was acquired from a related party
for its then fair market value, and the basis of the property for
federal income tax purposes, in the hands of the person acquiring
it, is not determined: (i) 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 (ii) Under Section 1014(e) of the United States Internal
January, one thousand nine hundred ninety-nine.
WVC 11 - 13 D- 4 §11-13D-4. Eligible investment for industrial expansion or
(a) General. -- The eligible or qualified investment in
property purchased for industrial expansion or revitalization shall
be the applicable percentage of the cost of each property purchased
for the purpose of industrial expansion or revitalization, which is
placed in service or use in this state, by the eligible taxpayer
during the taxable year.
(b) Applicable percentage. -- For the purposes of subsection
(a), the applicable percentage for any property shall be determined
under the following table:
If useful life is: The applicable percentage is:
4 years or more but less than 6 years .................... 33 1/3
6 years or more but less than 8 years .................... 66 2/3
8 years or more .......................................... 100
The useful life of any property for purposes of this section
shall be determined as of the date such property is first placed in
service or use in this state by the taxpayer, determined in
accordance with federal income tax law.
(c) Cost. -- For purposes of subsection (a), the cost of each
property purchased for industrial expansion or revitalization, or
for conduct of an eligible research and development project, shall
be determined under the following rules:
(1) Trade-ins. -- Cost shall not include the value of property
given in trade or exchange for the property purchased forindustrial expansion or revitalization.
stolen, then the cost of replacement property shall not include any
property purchased for multiple business use including use as a
component part of a new or expanded or revitalized industrial
business, together with some other business or activity not
eligible for credit under this article, shall be apportioned
between such businesses and occupations. The amount apportioned to
the new or expanded or revitalized industrial business, shall be
considered to be as an eligible investment, subject to the
conditions and limitations of this section.
(5) Self-constructed property. -- In the case of self-constructed property, the cost thereof shall be the amount properly
charged to the capital account for purposes of depreciation.
WVC 11-13D-5 §11-13D-5. Eligible investment for research and development.
(a) General. -- The eligible investment in a research and
development project shall be the sum of the applicable percentage
of the cost of land and depreciable property purchased for the
conduct of an eligible research and development project, which is
placed in service or use in this state during the taxable year,
plus the amount of qualified research expenses (as defined in this
section) deducted by the eligible taxpayer, for federal income tax
(b) Applicable percentage of property. -- For the purpose of
subsection (a), the applicable percentage for land and depreciable
property shall be determined under the following table:
Less than 6 years ........................................ 33 1/3
(c) Cost of property. -- For purposes of subsection (a), the
cost of each property purchased for the conduct of an eligible
research and development project shall be determined under the
of the research and development project.
damaged or destroyed by fire, flood, storm or other casualty, or is stolen, then the cost of replacement property shall not include any
property purchased for multiple business use including direct use
in the conduct of an eligible research and development project,
together with some other business or activity not eligible under
amount apportioned to the conduct of the eligible research and
development project shall be considered to be eligible investment
(5) Self-constructed property. -- In the case of self-
constructed property, the cost thereof shall be the amount properly
(d) Qualified research expenses. -- For purposes of this
(1) "Qualified research expenses" means the sum of in-house
and contract research expenses for qualified research allocated to
this state, which are paid or incurred by the eligible taxpayer
during the taxable year in carrying on any trade or business
taxable under sections two-a, two-b and two-m, article thirteen of
this chapter, or under section two-h of said article thirteen (in
the case of manufacturing services only): Provided, That on and after the first day of July, one thousand nine hundred eighty-
seven, "qualified research expenses" shall mean the sum of in-house
and contract research expenses for qualified research, allocated to
taxable under article thirteen, thirteen-a or twenty-three of this
chapter, that would have been taxable under section two-a, two-b,
two-m or two-h (in the case of manufacturing services only) of said
article thirteen, as in effect on the first day of January, one
thousand nine hundred eighty-five.
In no event shall "qualified research expenses" include any
expense that must be capitalized and depreciated for federal income
tax purposes, or any expenditure paid or incurred for the purpose
of ascertaining the existence, location, extent or quality of any
deposit of coal, limestone or other natural resource, including oil
(2) "In-house research expenses" means:
services performed in this state by such employee;
of qualified research in this state; and
to use personal property in the conduct of qualified research in
(A) Engaging in qualified research in this state; or
(B) Engaging in the direct supervision or direct support of research activities in this state, which constitute qualified
If substantially all of the services performed by an
services meeting the requirements of subparagraph (A) or (B), the
term "qualified services" means all services performed by such
individual for the taxable year.
(A) Land or improvements to land; and
(5) "Wages" has the meaning given to such term by Section
3401(a) (26 U.S.C. § 3401(a)) of the Internal Revenue Code of 1954,
as amended. In the case of self-employed individuals and owner-
employees (within the meaning of Section 401(c)(1) (26 U.S.C.
§ 401(c)(1)) of said Internal Revenue Code), the term "wages"
includes the earned income (as defined in Section 401(c)(2) (26
U.S.C. § 401(c)(2)) of said Internal Revenue Code of such employee. The term "wages" shall not include any amount taken into account in
determining the federal targeted jobs credit under Section 51(a)
(26 U.S.C. § 51(a)) of said Internal Revenue Code.
(6) "Contract research expenses" means:
the taxpayer) for qualified research.
(B) If any contract research expenses paid or incurred during
any taxable year are attributable to qualified research to be conducted after the close of the taxable year, such amount shall be
treated as paid or incurred during the taxable year during which
the qualified research is conducted.
(7) "Qualified research" means research and development
conducted for purposes relating to the technical, economic,
financial, engineering or marketing aspects of expanding markets
for and increasing sales of this state's natural resource products
or manufactured products, or both: Provided, That it shall not
(A) Research or development conducted outside this state;
(B) Research or development not directly related to increasing
the uses for and sales of this state's natural resource products
and industrial products;
(C) Research in the social sciences or humanities; or
(D) Research and development to the extent funded by any
grant, contract or otherwise by another person (or any governmental
(e) Research by colleges, universities and certain research
organizations. -- In general, sixty-five percent of the amount paid
or incurred by a corporation to any nonprofit educational
organization which is an institution of higher education (as
defined in Section 3304(f) (26 U.S.C. § 3304(f)) of the Internal
Revenue Code of 1954, as amended), an institution of higher
education subject to the jurisdiction of the West Virginia board of
regents, or any other nonprofit organization exempt from federal
income taxes which is organized and operated primarily to conduct
scientific research and is not a private foundation for federal income tax purposes for research to be performed by such
organization shall be treated as contract research expenses. The
preceding sentence shall apply only if the amount is paid or
incurred pursuant to a written research agreement between the
corporation and the qualified organization.
(f) Standards for determining qualified research expenses. --
In prescribing standards for determining which research and
development expenses are considered to be West Virginia qualified
research expenses for purposes of this section, the tax
commissioner may consider: (1) The place where the services are
performed; (2) the residence or business location of the person or
persons performing the services; (3) the place where qualified
research supplies are consumed; and (4) other factors that the tax
commissioner believes relevant in determining whether or not the
research and development expenses, land and depreciable property
were purchased and used for qualified research, as defined in this
article, during the taxable year. WVC 11 - 13 D- 5 A
§11-13D-5a. Eligible investment for qualified housing development
(a) General. -- The eligible investment in a qualified housing
construction of a qualified housing development project, which is
placed in service or use in this state during the taxable year.
If useful life is:The applicable percentage is:
Less than 4 years ........................................ 0
8 years or more .......................................... 100 The useful life of any property for purposes of this section
cost of each item of property purchased for the conduct of an
eligible housing development project shall be determined under the
given in trade or exchange for the property purchased forconstruction of a qualified housing development project.
damaged or destroyed by fire, flood, storm or other casualty or is
(3) Self-constructed property. -- In the case of self-constructed property, the cost thereof shall be the amount properly
(d) "Qualified housing development" or "qualified housing
development project" means a residential housing development
located in this state that contains five or more single-family
contiguous residential housing units or multi-family residential
housing units or multi-family residential buildings containing five
or more residential housing units, which are contiguously located.
(e) "Residential housing unit" means any single-family
dwelling or a single-family unit in a multi-family dwelling that is
constructed for sale or lease to nontransients for use and
occupancy as their primary permanent residence.
WVC 11 - 13 D- 5 B
§11-13D-5b. Qualified investment for a management information
services facility.
(a) General. -- The qualified investment in property purchased
or leased for use as a component part of a management information
services facility shall be the applicable percentage of the cost of
each property purchased for a management information services
facility, which is placed in service or use in this state, by the
eligible taxpayer during the tax year as determined under this
If useful life or applicableThe applicable
lease term is: percentage is:
3 yrs. or more but less than 6 yrs.33-1/3%
6 yrs. or more but less than 8 yrs.66-2/3%
8 yrs. or more 100%
shall be the actual economic useful life determined as of the date
such property is first placed in service or use in this state by
the taxpayer, determined for financial accounting purposes in
accordance with generally accepted principles of accounting.
property purchased for a management information services facility
shall be the fair market value or the actual cost, whichever isless, and in no event shall the cost exceed the fair market value,
furthermore the cost shall be determined under the following rules:
given in trade or exchange for the property purchased for a
management information services facility.
(3) Rental property. -- The cost of tangible personal property
acquired by lease for a primary lease term of three or more years
shall be seventy-five percent of the rent reserved for the shorter
(A) The first ten years of the primary lease term; or
(B) The primary lease term.
Such cost of leased tangible personal property shall then be
multiplied by the applicable percentage determined under subsection
(b) of this section based upon the shorter of the first ten years
of the primary lease term or the primary lease term in order to
determine qualified investment in such leased property.
(4) Property purchased for multiple use. -- Investment in
property purchased for use in a management information services
facility together with some other use shall not qualify for
purposes of this credit.
(6) Specific exclusions. --
(A) Investment in land or buildings, whether purchased or
leased, shall not qualify for purposes of this management
information services facility credit.
(B) Investment by purchase or lease in natural resources in
place; and investment by purchase or lease in property, the cost or
or use, shall not qualify for purposes of this management
(C) Investment in property purchased, or leased, or placed in
service or use prior to the first day of April, one thousand nine
hundred ninety-one, or after the thirty-first day of March, one
thousand nine hundred ninety-three, shall not qualify for purposes
of this management information services facility credit.
(D) Investment in property not purchased, or leased, either
for the purpose of expanding an existing management information
services facility in West Virginia pursuant to a national, regional
or international relocation or consolidation of significant
management information services in West Virginia; or for the
purpose of establishing in this state a management information
services facility that is new to West Virginia, shall not qualifyfor purposes of this management information services facility
WVC 11 - 13 D- 6 §11-13D-6. Forfeiture of unused tax credits, redetermination of
credit required.
determined under section four, five, five-a or five-b of this
(2) Ceases to be used in the new or expanded or revitalized
industrial business, or in the eligible research and development
project, or in the qualified housing development project, or in a
management information services facility of the taxpayer in this
state prior to the end of its useful life, as determined under said
section four, five, five-a or five-b, then the unused portion of
the credit allowed for such property shall be forfeited for the
taxable year and all ensuing years. Additionally, except when the
property is damaged or destroyed by fire, flood, storm or other
percentage of cost of such property allowed under said section
four, five-a or five-b, to correspond with the percentage of cost
allowable for the period of time that the property was actually
used in this state in the industrial business or management
information services business of the taxpayer. The taxpayer shall
then file a reconciliation statement with its annual businessfranchise tax return for the year in which the forfeiture occurs
and pay any additional taxes owed due to reduction of the amount of
credit allowable for such earlier years, plus interest and any
applicable penalties: Provided, That on and after the first day of
July, one thousand nine hundred eighty-seven, the phrase "taxes
imposed by article twelve-a or thirteen, or both, of this chapter"
shall mean "taxes imposed by articles thirteen, thirteen-a and
twenty-three of this chapter or any one or combination of such
articles of this chapter".
(b) Cessation of operation of industrial facility or eligible
research and development project, qualified housing development
project or management information services facility. -- If during
any taxable year, the taxpayer ceases operation of an industrial
facility or a management information services facility in this
state, or of an eligible research and development project, or a
qualified housing development project, for which credit was allowed
under this article, or article thirteen-c of this chapter prior to
its repeal, before expiration of the useful life of the property
with respect to which tax credit has been allowed under this
article or article thirteen-c of this chapter prior to its repeal,
then the unused portion of the allowed credit shall be forfeited
for the taxable year and all ensuing years. Additionally, except
when the cessation is due to fire, flood, storm or other casualty,
the taxpayer shall redetermine the amount of credit allowed in
earlier years by reducing the applicable percentage of cost of suchproperty allowed under section four, five, five-a or five-b, to
correspond with the percentage of cost allowable for the period of
time that the property was actually used in this state in the
industrial business or management information services business of
the taxpayer. The taxpayer shall then file a reconciliation
statement with its annual business franchise tax return for the
earlier years, plus interest and any applicable penalties: Provided, That on and after the first day of July, one thousand
nine hundred eighty-seven, the phrase "taxes imposed by article
twelve-a or thirteen, or both, of this chapter" shall mean "taxes
imposed by articles thirteen, thirteen-a and twenty-three of this
chapter, or any one or combination of such articles of this
chapter".
WVC 11 - 13 D- 7 §11-13D-7. Transfer of eligible investment to successors.
treated as disposed of under section six of this article by reason
of a mere change in the form of conducting the business as long as
the property is retained in a similar industrial business or
management information services business activity in this state and
the taxpayer retains a controlling interest in the successor
business. In this event, the successor business may claim the
amount of credit still available with respect to the industrial
facility or facilities transferred or to the eligible research and
development project or management information services facility and
the taxpayer (transferor) may not be required to redetermine the
amount of credit allowed in earlier years.
(b) Transfer or sale to successor. -- Provided that the tax
commissioner gives prior approval for a transfer or sale, property
may not be treated as disposed of under section six by reason of
any transfer or sale to a successor business which continues to
operate the industrial facility or management information services
facility in this state. This requirement for prior approval may be
waived by the tax commissioner at any time prior to, or subsequent
to, the transfer or sale. Upon transfer or sale, the successor
shall acquire the amount of credit that remains available under
this article for each taxable year subsequent to the taxable year
of the transferor during which the transfer occurred and, for the
year of transfer, an amount of annual credit for the year in the same proportion as the number of days remaining in the transferor's
taxable year bears to the total number of days in the taxable year
and the taxpayer (transferor) shall not be required to redetermine
the amount of credit allowed in earlier years. In determining
whether or not to approve a disposition pursuant to this
subsection, the tax commissioner shall take into account the
legislative findings and purpose contained in section one of this
article in making the decision.
WVC 11 - 13 D- 8 §11-13D-8. Prior industrial expansion credit preserved.
Any tax credit which an industrial taxpayer was legally
entitled to claim under article thirteen-c of this chapter prior to
its repeal effective the first day of March, one thousand nine
hundred eighty-five, shall be fully and completely preserved under
the provisions of this article for the remainder of the ten-year
credit period that was then in existence under said article
thirteen-c.
WVC 11 - 13 D- 9 §11-13D-9. Severability.
(a) If any provision of this article or the application
thereof shall for any reason be adjudged by any court of competent
jurisdiction to be invalid, such judgment shall not affect, impair
or invalidate the remainder of said article, but shall be confined
in its operation to the provision thereof directly involved in the
controversy in which such judgment shall have been rendered, and
the applicability of such provision to other persons or
(b) If any provision of this article or the application
thereof shall be made invalid or inapplicable by reason of the
failure of the Legislature to enact any statute therein addressed
or referred to, or by reason of the repeal or any other
invalidation of any statute therein addressed or referred to, such
failure to reenact on such repeal or invalidation of any such
statute shall not affect, impair or invalidate the remainder of the
said article, but shall be confined in its operation to the
provision thereof directly involved with, pertaining to, addressing
or referring to the said statute, and the application of such
provision with regard to other statutes or in other instances not
affected by any such invalid or repealed statute shall not be
abrogated or diminished in any way.
WVC 11 - 13 D- 10 §11-13D-10. Termination of credit, exception for electricity
producers, preservation of entitlements.
(a) Except for persons taxable under section two-o, article
thirteen of this chapter as described in subsection (b) of this
section and persons described in subsection (c) of this section, no
credit is available to any taxpayer under this article after the
thirty-first day of December, two thousand two.
(b) Persons taxable under section two-o, article thirteen of
this chapter that make eligible investment that qualifies for
credit in accordance with the provisions of subsection (e), section
three of this article in property used in the business activity
taxable under section two-o, article thirteen of this chapter, are
entitled to the credit determined under subsection (e), section
three of this article, in accordance with the requirements and
limitations of this article, without regard to whether such
investment is made or credit claimed after the thirty-first day of
December, two thousand two.
(c) Taxpayers who gained entitlement to any tax credit
pursuant to the terms of this article prior to the first day of
January, two thousand three, retain that entitlement, and may apply
the credit in due course pursuant to the requirements and
limitations of this article until the original ten-year entitlement
has been exhausted or otherwise terminated.