Locating a business in West Virginia makes good business sense. It’s the reason more than $18.3 billion worth of new business investments have been made in the state’s economy since 2005.
West Virginia closed its 2011 fiscal year with a surplus of nearing $330 million; the sixth year in a row with a surplus – without a tax increase. The state has also removed approximately $109 million of business tax burden in FY 2011 and over $345 million during the past five years.
West Virginia’s highest priority is meeting your company’s needs by providing aggressive development assistance in the form of tax credits and financing programs. This development assistance can reduce startup and operating costs and provide for enhanced productivity.
The West Virginia Development Office also provides research and technical support including competitiveness studies, analysis and a variety of data that will lead to job creation and retention, and to community improvement.
West Virginia provides access to:
- A business-friendly climate and a productive, skilled work force
- All available state and federal work force training resources
- West Virginia has the nation’s thirdlowest cost of doing business
- Electric rates in West Virginia are among the lowest in the nation
- A strategic location with overnight delivery to more than half the United States population and more than one-third of the Canadian market
- Low cost of living for employees
- High quality of life and unparalleled outdoor recreational activities
Direct Loan Programs
The West Virginia Economic Development Authority can provide up to 45 percent 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.
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 percent 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
This program provides for customized financing through federal tax-exempt industrial revenue bonds. Of the state’s bond allocation, $57,492,750 is reserved for small manufacturing projects; $16,426,500 for qualifying projects in Enterprise Communities, and $90,345,750 for exempt facility projects.
West Virginia Infrastructure and Jobs Development Council
The fund can be used for financial assistance to public utilities, county development authorities and private companies for infrastructure improvements to support economic development projects.
Linked Deposit Loan Program
The program allows small, for-profit state employers with 50 or fewer employees and gross annual receipts of $5 million or less to apply for a linked deposit loan with an interest rate of 1 percent above published New York Prime, up to $250,000.
West Virginia Capital Company Act
The West Virginia Economic Development Authority administers a program that provides for debt and equity venture capital investment to small business. A number of firms are qualified in West Virginia to make venture capital investments and their contact information may be found at www.wveda.org.
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.
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 percent of the tax liability for business and occupation tax, business franchise tax, corporate net income tax, and personal income tax on certain pass through income, for a period of up to 13 years.
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 business) as a result of their business expansion project, the State’s Economic Opportunity Tax Credit can offset up to 80 percent of specified business taxes for a period of up to 13 years. 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 percent of the specified taxes for up to 13 years.
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 $32,000 per year and the employee has employer-provided health insurance benefits. The $32,000 figure is adjusted annually for cost-of-living.
The program provides property tax valuation for new investment property of manufacturers that make qualified capital improvements of more than $50 million to an existing manufacturing facility having an original investment asset cost base of at least $100 million. Under this program, the new capital addition is valued at 5 percent of original cost for the first 10 years after it is placed on the property tax rolls.
Manufacturing Investment Credit
A tax credit is allowed against up to 60 percent of corporate net income tax and business franchise tax based on qualified investment in eligible manufacturing property, with no new job creation required.
Manufacturing Inventory Credit
Offsets the business franchise tax and corporate net income tax in the amount of property tax paid on raw materials, goods in process and finished goods manufacturing inventory.
Strategic R&D Credit
The Strategic Research and Development Tax Credit can offset up to 100 percent of corporate net income tax and business franchise tax, based on qualified expenditures for R&D projects.
West Virginia Film Industry Investment Act
Up to 31 percent of direct production and post-production expenditures can be converted to transferable tax credits to offset state taxes.
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 percent of the business and occupation tax, business franchise tax, corporate net income tax, and personal income tax on certain pass through income for 20 consecutive years.
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 percent of the original cost of the property.
High-Technology Business Property Valuation Act
Tangible personal property, including servers, directly used in a hightechnology business or in an internet advertising business is valued for property tax purposes at 5 percent 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 hightechnology business or internet advertising business.
The Freeport Amendment
The Freeport Amendment exempts property from the West Virginia ad valorem property tax in two ways:
(1) 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.
(2) 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.
Manufacturing Sales Tax Exemption
Special Rates of Electric Power for Industrial Consumers
Purchases of materials and equipment purchased for direct use in manufacturing are exempt from the 6 percent state sales and use tax, including building materials and process equipment purchased for construction of a manufacturing facility.
The West Virginia Public Service Commission may establish special rates that in its judgment are necessary or appropriate for the continued, new or expanded operation of energy-intensive industrial consumers. In order to qualify for a special rate, an industrial facility, plant or enterprise shall enter into negotiations with the utility, having a contract demand of at least fifty thousand kilowatts of electric power at its West Virginia facilities under normal operating conditions; create or retain at least twenty-five full time jobs in the state; have invested not less than $500,000 in fixed assets in the state; and provide reasonable evidence that without the special rate, the operation is threatened or not economically viable.
Research and Development Sales Tax Exemption
Purchases of tangible personal property and services directly used in research and development are exempt from the consumers’ 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.
Tax Increment Financing
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.
The Tourism Matching Advertising Partnership Program
In order to extend advertising resources for the promotion of tourism through partnerships, this program provides reimbursable matching funds for direct advertising. Business applicants and their partners must provide a minimum of 50 percent of the total cost for programs at the $10,000 + level. For programs not exceeding $7,500, business applicants must provide 25 percent of the total cost.
For lodging stays in excess of 30 consecutive days per person at the same facility, there is an exemption from the state Consumers Sales and Service Tax (6 percent) and exemption from the Local Hotel/ Motel Tax (tax rate varies per region).
WorkForce Development Programs
WorkKeys® Career Readiness Certificates
The nationally-recognized WorkKeys® Career Readiness Certificates from WorkForce West Virginia aid in the process of matching qualified job seekers with jobs while assuring businesses that the State of West Virginia has a ready and skilled work force.
Governor’s Guaranteed Work Force Program
This flexible, customized training program offers assistance to eligible companies and businesses by providing funding that directly supports the transfer of knowledge and skills. Companies must create a minimum of 10 net new jobs within a 12-month period.
The Workforce Investment Act (WIA) Program
This customized training program is available to employers that hire individuals that meet specific program requirements. The program targets job seekers that are either economically disadvantaged or displaced due to job shifting in the region.
West Virginia Advance Program
This flexible program offers customized job training awards to new and existing businesses. The program offers development and delivery of training services that will support a company’s startup and ongoing employee development initiatives through a local Community and Technical College.