WV Incentives

Aircraft Valuation, Special Aircraft Property

All aircraft owned or leased by commercial airlines, charter carriers, private carriers and private companies, and any parts, materials or items used in 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 the lower of “salvage value” or 5% of original costs.

Build WV

The BUILD WV Act aims to assist West Virginia’s growing communities in attracting much-needed housing development projects. The credit offers a State Sales and Use Tax exemption for building materials and a 10-year property value adjustment refundable tax credit to offset building costs. West Virginia is one of the fastest growing in-bound states, and the demand for new, residential properties has never been higher. The West Virginia Department of Economic Development oversees the program and reviews all applications. A non-refundable application fee of $5,000 is required to apply. Projects must apply and be approved prior to the completion of construction.

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.

Film & TV Industry Sales & Use Tax Exemption

The West Virginia Film Production Tax Credit offers up to 31% transferable tax credits to productions filming in the state. Eligible projects include films, TV shows, music videos, and more, with no per-project or talent caps. Productions must spend at least $50,000 annually, with additional incentives for hiring West Virginia residents. Application is required and managed by the West Virginia Department of Economic Development.

The Downstream Natural Gas Manufacturing Investment Tax Credit

Tax credit for qualified investment in a new or expanded downstream natural gas manufacturing facility in West Virginia that results in the creation of at least 5 new jobs within 3 years of placement of qualified investment in service or use. Credit is taken proportionally over a 10-year period, with 20 year carryforward possible. The credit offsets tax attributable to the qualified investment for the Corporation Net Income Tax and Personal Income Tax on flow through income. If annual median compensation of qualified new employees exceeds the statewide average nonfarm payroll wage, credit to offset up to 100% of tax attributable to qualified investment. Other qualified Taxpayers may offset up to 80% of tax attributable to qualified investment.

Economic Opportunity Credit

For qualified companies that create at least 10 new jobs within specified time limits 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 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, $55,800 for 2020, 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 qualified investment.

For qualified businesses creating less than 10 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 $37,950 per year for 2020 and the employee has employer- provided health insurance benefits. The $37,950 figure is adjusted annually for cost of living.

Qualified businesses include only those engaged in the activities of manufacturing, information processing, warehousing, nonretail goods distribution, qualified research and development, the relocation of a corporate headquarters, or destination-oriented recreation and tourism.

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 certain facilities that are or will be classified under the North American Industry Classification System (NAICS) with the six digit code number 211130 (formerly 211112), (limited to natural gas liquid extraction “fractionating” plants) and to manufacturing facilities that use products produced at fractionating plants with a 211130 NAICS code. The special property tax valuation applies to qualified capital additions of more than $10M made to preexisting manufacturing facilities that have a value in place before the capital addition of more than $20M. The special property tax valuation is 5% of the cost of the qualified property instead of fair market value. 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 $20M pre-existing investment requirement.

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. 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.

Five for Twenty-Five Program — $2 Billion Primary (Fractionating) Plants, Secondary Plants & Tertiary Plants

For 25 years, qualified plants receive a special property tax valuation of 5% of the cost of the qualified property (also referred to as salvage value) instead of fair market value. 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.

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 as finished goods in the state for a short time before moving into interstate commerce are exempt from property tax. The exemption does not apply to inventories of raw materials or goods inprocess. 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.

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. Also, there is a sales tax exemption for all purchases of prewritten computer software, computers, computer hardware, servers, building materials and tangible personal property for direct use in a qualified high-technology business or internet advertising business.

High-Tech Manufacturing Credit

Businesses that manufacture certain computers and peripheral equipment, electronic components or semi-conductors 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. Jobs must have a median compensation of $55,800 (for 2020), adjusted for inflation each year.

High Wage Growth Tax Credit

The High Wage Growth Tax Credit program is designed to provide companies an income tax credit for creating high-paying jobs with health benefits. Eligible employers must create at least 10 jobs that pay at least 2.25 times the state median salary. The program allocates up to $5 million annually in credits, with awards based on job creation, wages, and economic impact. Jobs must be filled for at least 48 weeks during the tax year and be occupied by WV residents. Employers may reapply for credits for up to three qualifying periods successively. Application is required and managed by the West Virginia Department of Economic Development.

High Wage Growth Jobs Credit

For jobs created in West Virginia by an eligible employer on or after July 1, 2020. The employer must:

• Be registered to do business in West Virginia,
• Offer health benefits to all full-time eligible employee,
• Maintain a net overall increase in West Virginia employment during the credit period, and
• Have a net overall increase of employment of at least 10 new high-wage jobs held by West Virginia residents,
• Certify the employer pays at least 50% of employee health care premiums.

Credit eligibility is certified by the West Virginia Department of Economic Development, which may authorize no more than $5M of the credit during any WV fiscal year. Credit awarded to a taxpayer in any tax year may not exceed 10% of salaries of the new high-wage jobs. Credit is applied against Corporation Net Income Tax and Personal Income Tax derived from pass through income from a qualified business. Credit refund may not exceed $100,000 per taxpayer. Unused credit may carry forward up to 10 years.

Lodging Exemptions

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% to 7% including municipal tax).

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 for businesses having a NAICS code prefix of 31, 32 or 33, against up to 60% of corporate net income tax and based on qualified investment in eligible manufacturing property, with no new job creation required.

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.

Natural Gas Liquids Property Tax Adjustment

Natural gas liquid storers or transporters may be allowed a tax credit in the amount of the West Virginia ad valorem property tax paid on the value of natural liquids inventory and equipment during the Personal Income Tax or Corporation Income Tax year, as applicable. Unused credit carries forward for 3 years.

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 E-Commerce Businesses

Some computer-related sales of tangible personal property and services are exempt from the consumer sales and services 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.

Tourism Development Act

Businesses eligible for the act will receive a 25-percent tax credit from consumers sales and service taxes collected on the gross receipts generated directly from daily operations.

Additionally, certain projects can receive a 35-percent credit if the project is on an abandoned surface mine or is on/adjacent to a state or national forest or park. The tax credit is taken over a 10-year period, at the rate of one tenth of the amount per taxable year. The credit begins with the taxable year in which the project is opened to the public unless the approved company elects to delay the beginning of the 10-year period until the next succeeding taxable year.

If any credit remains, the amount of credit carries over to each ensuing tax year until completely used—ensuring companies get the full benefit of this incentive. If any unused credit remains after the 13th year, that amount is forfeited. The sales tax base must be increased annually to receive the full credit.

Projects eligible for the West Virginia Tourism Development Act must meet established criteria. Please contact the West Virginia Department of Economic Development for assistance.

Direct Loan Programs

The West Virginia Economic Development Authority can provide up to 45% in financing fixed assets by providing low-interest, direct loans to expanding state businesses and firms locating in West Virginia. Loan term is generally 15 years for real estate intensive projects and five to 10 years for equipment projects. Loan proceeds may be used for the acquisition of land, buildings and equipment. Working capital loans and the refinancing of existing debt are not eligible.

Entrepreneurship and Innovation Investment Fund

The Entrepreneurship and Innovation Investment (EII) Fund, managed by the West Virginia Small Business Development Center (WV SBDC), was created by the Legislature to foster job creation and enable economic development and diversification through support of research and development initiatives funded by the Small Business Innovation Research and Small Business Technology Transfer (SBIR/STTR) programs. The EII Fund provides grants to eligible small businesses to match funds they receive from SBIR/ STTR Phase I and Phase II awards. In addition, to further enhance the State’s SBIR/STTR grant proposals, the program may award a Phase Zero Grant to help offset a portion of the cost of preparing a competitive Phase I proposal. Criteria is as follows:

• Must be a for-profit, West Virginia based business
• Must have received a Phase I or Phase II SBIR/STTR award
• Remain a WV based business for the duration of the SBIR/STTR project
• >50% of research conducted in West Virginia
• No duplicative funding
• Satisfy all SBIR/STTR requirements
• To apply for a Phase II matching grant, the business must demonstrate ability to conduct a Phase II proposal

Indirect Loans

The West Virginia Economic Development Authority provides a loan insurance program through participating commercial banks to assist firms that cannot obtain conventional bank financing. This program insures up to 80% of a bank loan for a maximum loan term of four years. Loan proceeds may be used for any business purpose except the refinancing of existing debt.

Industrial Revenue Bonds (IRBs)

This program provides for customized financing through federal tax-exempt industrial revenue bonds. Of the state’s bond allocation, $59,757,600 is reserved for small manufacturing projects; $17,073,600 for qualifying projects in Enterprise Communities, and $93,904,800 for exempt facility projects.

Tax Increment Financing (TIF)

Allows increases in property tax based on the improvement associated with qualified economic development and public improvement projects to assist with their long-term financing.

West Virginia Infrastructure and Jobs Development Council

The fund can be used for financial assistance to private companies, public utilities, and county development authorities for infrastructure improvements to support economic development projects.

West Virginia Jobs Investment Trust

West Virginia Jobs Investment Trust (JIT) is a public venture capital fund created to develop, promote and expand West Virginia’s economy. The program makes investment funds available to eligible businesses, thus stimulating economic growth and providing or retaining jobs within the state.