Incentives and Tax Credits:

Economic Opportunity Tax Credit

Economic Opportunity Tax Credit for Small Business

Manufacturing Investment Credit

Strategic Research & Development Tax Credit

The Freeport Amendment

Special Property Valuation Statutes

Consumers Sales & Service Tax & Use Tax

Taxes:

Owner-occupied Houses (Class II)

Commercial Real Property (Class III & IV)

   *    Rounded off the the nearest cent

**    Assessed value is 60% of market value

State Taxes

Incentives & Tax Credits

Economic Opportunity Tax Credit

This credit is available to businesses that make a qualified investment (on or after January 1, 2003) in a new or expanded business in West Virginia and that, as a result of the investment, create at least 20 new jobs held by West Virginians.  Qualified businesses are those engaged in the activities of manufacturing, information processing, warehousing, non-retail goods distribution, qualified research and development, the relocation of a corporate headquarters or destination-oriented recreation and tourism.

A qualified business creating new jobs within three tax years (one year in the case of small businesses) is allowed a credit as follows:

The economic opportunity tax credit is prorated over a 10-year period at a rate of 10 percent per year.  The calculation of qualified investment is determined by multiplying the new cost of eligible property by an applicable useful life percentage based on actual economic useful life.  The following percentages apply:

The credit can offset a portion of the tax attributable to qualified investment for the business and occupation tax (electric power taxes only), the business franchise tax, the corporation net income tax and the personal income tax (on flow-through business profits only), in the order stated above.

If the annual median compensation paid to qualified new employees exceeds the statewide average non-farm payroll wage, then the taxpayer may use available credits to offset up to 100 percent of each of the above taxes.  All other qualified taxpayers may use available credits to offset up to percent of each of the above taxes.

Economic Opportunity Tax Credit for Small Business

A business of a controlled group of foreign and domestic affiliated businesses with annual gross sales of not more than $7 million may be entitled to an economic opportunity tax credit if the qualified investment creates at least 10 new jobs within 12 months.  If 10 new jobs are created, the small business may receive a credit equal to 10 percent of its qualified investment held by West Virginians.  An application for the credit must be filed on or before the due date of the income tax return without extensions.  Failure to timely file the application results in significant penalties.

Manufacturing Investment Credit

Manufacturers making qualified capital investments in a West Virginia industrial facility may be eligible for the Manufacturing Investment Tax Credit.  The credit is 5% of qualified investment.  It applies over 10 years to offset up to 50% of business franchise tax, severance tax and corporation net income tax.  Jobs creation is not required for entitlement to the Manufacturing Investment Credit.

Strategic Research & Development Tax Credit

Businesses engaged in a certified research and development project in West Virginia are eligible for the Strategic Research and Development Tax Credit.  The credit is the higher of 3% of annual qualified research expenses and investment, or 10% of the excess of annual qualified research expenses and investment over the average of those expenditures in the preceding 3 years.

The credit offsets up to 100% of the taxpayer's business franchise tax, corporation net income tax, and personal income tax (on flow-through business profits only) in the order stated.

Failure to timely file an application for the tax credits listed above will result in tax penalty.

The Freeport Amendment

The property tax Freeport Exemption applies to:

1. Manufactured finished goods inventories (but not raw materials or goods in process) stored in State for a short time before shipment out of West Virginia, and

2. Goods from outside West Virginia, warehoused a short time in State, then shipped to a destination outside of West Virginia.

Special Property Valuation Statutes

Special property valuation statutes can affect the assessed value of property, and in turn, the amount of property tax payable. 

Air and water pollution abatement equipment is valued for property tax purposes at 5% of original cost.

Molds, jigs, dies, forms, patterns and templates owned by a manufacturer, as defined by the statute, are valued for property tax purposes at the lower of the fair market value of the property or 5% of its original cost.

If a manufacturer has $100 million of original cost investment in place in a manufacturing facility in West Virginia, and makes more than $50 million of new investment in property for expansion of the facility, the new property is valued at 5% of original cost for a period of ten years, or until the property is disposed of or the facility ceases business. 

Consumers Sales & Service Tax & Use Tax

Purchases of tangible personal property and services for direct use in manufacturing are exempt from the consumers sales and service tax.  Purchases of tangible personal property and services for direct use in research and development are also exempt.