Business Assistance Programs
The State of West Virginia offers tax credits and incentives to help reduce operating costs.
Five for Ten Program — Manufacturing Facilities
Investments greater than $50M in a manufacturing facility having $100M or more of preexisting investment in place prior to the new investment are valued at 5% of cost of the new investment for property tax purposes. For capital additions certified on or after July 1, 2011, the value of the land before any improvements is subtracted from the value of the capital addition, and the unimproved land value is not given salvage value treatment.
High-Tech Manufacturing Credit
Businesses that manufacture certain computers and peripheral equipment, electronic components or semiconductors and which create at least 20 new jobs within one year after placement of qualified investment into service, can receive a tax credit to offset 100% of the corporate net income tax, and personal income tax on certain pass-through income for 20 consecutive years.
For lodging stays more than 30 consecutive days per person at the same facility, there is an exemption from the state consumers’ sales and service tax (6%).
Manufacturing Inventory Credit
Offsets the corporate net income tax in the amount of property tax paid on raw materials, goods in process, and finished goods manufacturing inventory.
Manufacturing Investment Credit
A tax credit is allowed against up to 60% of corporate net income tax and based on qualified investment in eligible manufacturing property, with no new job creation required.
Research and Development Sales Tax Exemption
Purchases of tangible personal property and services directly used in research and development are exempt from the consumer sales tax.
Sales Tax Exemption for Certain Warehouse and Distribution Centers
Purchases of certain tangible personal property in qualified warehouse and distribution centers may be exempt from the consumer sales and service tax.
Aircraft Valuation, Special Aircraft Property
All aircraft owned or leased by commercial airlines or private carriers, or any parts, materials or items used in the construction, maintenance or repair of aircraft which are, or are intended to become, affixed to or a part of an aircraft or of an aircraft’s engine or of any other component of an aircraft will be valued at “salvage value” or 5% of original costs, whichever is the lesser amount.
Economic Opportunity Credit
For qualified companies that create at least 20 new jobs within specified time limits (10 jobs in the case of qualified small businesses) as a result of their business expansion projects, the State's Economic Opportunity Tax Credit can offset up to 80% of the corporate net income tax and personal income tax (on flow-through income only) attributable to the qualified investment. If a qualified company that creates the requisite number of jobs pays an annual median wage higher than the statewide average non-farm payroll wage, then the qualified company can offset up to 100% of the corporate net income tax and personal income tax (on flow-through income only) attributable to the qualified investment.
For qualified businesses creating less than 20 new jobs within specified time limits, or for a qualified small business creating less than 10 new jobs, a $3,000 credit is allowed per new full-time job for five years, providing the new job pays at least $35,700 per year and the employee has employer provided health insurance benefits. The $35,700 figure is adjusted annually for cost of living.
Five for Ten Program — Fractionating Plants and Secondary Plants
Special property tax valuation applies for 10 years to real property (excluding the value of unimproved land) and personal property of facilities that are or will be classified under the North American Industry Classification System (NAICS) with the six-digit code number 211112 (natural gas liquid extraction "fractionating" plants) and to manufacturing facilities that use products produced at a facility with a 211112 NAICS code. The special property tax valuation applies to qualified capital additions of more than $10 million made to pre-existing manufacturing facilities that have a value in place before the capital addition of more than $20 million. The special property tax valuation is 5% of the cost of the qualified property instead of fair market value. For capital additions certified on or after July 1, 2011, the value of the land before any improvements is subtracted from the value of the capital addition, and the unimproved land value is not given salvage value treatment.
In the absence of a pre-existing manufacturing facility owned or operated by the person making the capital addition, multiple party projects may be established to meet the $20 million pre-existing investment requirement.
High Technology Valuation Act (Data Centers)
Tangible personal property, including servers, directly used in a high-technology business or in an Internet advertising business, is valued for property tax purposes at 5% of the original cost of the property. In addition, sales tax is eliminated from all purchases of prewritten computer software, computers, computer hardware, servers, building materials, and tangible personal property for direct use in a high-technology business or internet advertising business.
Manufacturing Sales Tax Exemption
Purchases of materials and equipment for direct use in manufacturing are exempt from the 6% state sales and use tax and 1% municipal sales tax, including building materials and process equipment purchased for construction of a manufacturing facility.
Sales Tax Exemption for Certain E-Commerce Businesses
Some computer-related sales of tangible personal property and services are exempt from the consumer sales and services tax.
Aircraft owned or leased by commercial airlines, charter carriers, private carriers, and private companies are valued for property tax purposes at the lower of fair market salvage value or 5% of the original cost of the property.
Corporate Headquarters Credit
Companies that relocate their corporate headquarters to West Virginia are eligible for tax credits if 15 new jobs (including relocated employees) are created within the first year. The credit can offset up to 100% of the tax liability for business and occupation tax, corporate net income tax, and personal income tax on certain pass-through income, for a period of up to 13 years.
The Freeport Amendment
The Freeport Amendment exempts property from the West Virginia ad valorem property tax in two ways. First, manufactured products produced in West Virginia and stored in the state for a short time before moving into interstate commerce are exempt from property tax. Second, goods transported into West Virginia from outside of the state, which are held for a short time in a warehouse and then shipped to a destination outside of West Virginia, are exempt from the property tax. The exemption does not apply to inventories of raw materials or goods in process.
Qualified businesses include only 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.
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