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

Current through Register Vol. XLI, No. 28, July 12, 2024
The business investment and jobs expansion tax credit is
				  available to a taxpayer or a group of project participant taxpayers against the
				  portion of certain taxes imposed by this State which are attributable to and
				  the consequence of the taxpayer's qualified investment in a new or expanded
				  business in West Virginia which results in the creation of new jobs. The
				  maximum allowable credit is determined by multiplying the amount of the
				  taxpayer's qualified investment by the taxpayer's new jobs percentage.
The amount of qualified investment is based on the useful
				  life and the cost of real and personal property as follows:
PERCENTAGE OF
COST WHICH CAN
BECOME QUALI-FIED INVESTMENT
USEFUL LIFE
Less than 4 years
0
4 to 6 years
33-1/3
6 to 8 years
66-2/3
8 years or more
100
Qualified investment for the purposes of the business
				  investment and jobs expansion tax credit, generally consists of the investment
				  of the taxpayer in real and tangible personal property, with certain
				  exclusions, multiplied by the appropriate qualified investment percentage as
				  described above. Leases of tangible personal property and real property can
				  qualify as investment for purposes of the credit.
The percentage of qualified investment available as credit is
				  determined by the number of new jobs created which are directly attributable to
				  the taxpayer's qualified investment as follows:
IF THE NUMBER OF NEW JOBS IS:
THE APPLICABLE
						  PERCENTAGE IS:
1,000
90
760
80
520
70
280
60
80
50
A new job must be filled by a West Virginia domiciled West
				  Virginia resident and must be directly attributable to the making of new
				  investment.
The credit is applied over a ten (10) year period (at 1/10th
				  per year) beginning in the taxable year in which the qualified investment is
				  placed in service or use, or, at the taxpayer's option, in the next succeeding
				  tax year.
The business investment and jobs expansion tax credit may be
				  used to offset up to eighty percent (80%) of the tax liability apportioned to
				  the qualified investment for the following State taxes in the following
				  order.
Business and Occupation Tax
Carrier Income Tax
Telecommunications Tax
Business Franchise Tax
Corporation Net Income Tax
Personal Income Tax
Sales and Use Taxes
The credit may offset the severance tax for certain taxpayers
				  who have placed investment into service or use during certain time periods,
				  generally, prior to March 10, 1990, or who are subject to certain statutory
				  rules. The credit may also be sued as an indirect offset of up to twenty
				  percent (20%) of workers' compensation premiums directly attributable to the
				  qualified investment and eighty percent (80%) of ad valorem property tax
				  attributable to the qualified investment, and eighty percent (80%) of
				  unemployment insurance tax attributable to the qualified investment. The
				  property tax, unemployment insurance tax and workers' compensation premiums are
				  offset by means of a rebate of the remaining twenty percent (20%) of the
				  business taxes listed above, except for the sales and use taxes, provided that
				  sufficient credit for the year remains available. Unused credit equal to the
				  remainder of rebate credit for eighty percent (80%) of property tax, eighty
				  percent (80%) of unemployment insurance tax and twenty percent (20%) of
				  workers' compensation premiums not offset during the taxable year may be
				  carried forward to the twelfth (12th) year subsequent to the year during which
				  qualified investment was placed in service or use. The amount of taxes
				  attributable to the new investment is determined by multiplying the total tax
				  liability by a fraction, the numerator of which is the compensation paid to the
				  employees hired as a result of the new investment, and the denominator of which
				  is the compensation paid to all West Virginia employees of the taxpayer.
The statute provides for business investment and jobs
				  expansion tax credit projects whereby multiple parties may engage in a business
				  enterprise such that the parties together will create at least fifty (50) jobs
				  and make qualified investment subject to the credit. A business entity may
				  qualify as a project participant in a multiple party project by contributing
				  either property, as a direct purchaser or lessee of qualified investment
				  property, or jobs, as an employer, to a business investment and jobs expansion
				  tax credit project.
The statute provides for multiple year projects wherein the
				  qualified investment will be made over a period of up to three (3) tax years,
				  rather than over a single taxable year. A project involving both multiple
				  parties and multiple years can also be approved by the Tax Commissioner.
The regular business investment and jobs expansion tax credit
				  is available for an entity or for project participants which make qualified
				  investment in West Virginia and which create at least fifty (50) new
				  jobs.
The small business tax credit is available for businesses
				  which have an annual payroll and annual gross receipts not exceeding those
				  maximums set forth in Sections 3.2b and 7a of these regulations. This credit is
				  available to businesses which make qualified investment which results in the
				  creation of at least ten (10) new jobs. Only multiple year projects may be
				  created by small business tax credit investors. Multiple party small business
				  tax credit projects may not be created under the statute.
Effective February 1, 1986, a corporation that moves its
				  corporate headquarters to West virginia from a location outside this State may
				  be entitled to a credit. The amount of the credit varies depending on the
				  number of new jobs created in West Virginia by relocation of the corporate
				  headquarters. If the relocation creates at least fifteen (15) new jobs, but
				  less than fifty (50) new jobs, or if the corporation headquarters relocation is
				  part of a business development project being conducted in West Virginia by the
				  corporation, which is also placed into service or use, during the same tax year
				  that the corporate headquarters is relocated, which together result in at least
				  fifty (50) new jobs being created, then the credit available is determined by
				  multiplying the applicable "new jobs percentage" by the "adjusted qualified
				  investment."
If the relocation creates at least fifteen (15) but less than
				  fifty (50) new jobs, then the amount of credit is equal to ten percent (10%) of
				  the corporation's adjusted qualified investment. The new jobs percentage will
				  range from fifty percent (50%) for fifty (50) new jobs to ninety percent (90%)
				  for one thousand (1,000) new jobs, although the taxpayer corporation may at its
				  option choose to take the ten percent (10%) credit even though fifty (50) or
				  more new jobs have been created.
The "adjusted qualified investment" means the qualified
				  investment of the taxpayer in real and tangible personal property purchased for
				  business expansion plus the cost of the reasonable and necessary expenses
				  incurred by the taxpayer to relocate the corporate headquarters from its
				  out-of-state location to West Virginia.