West Virginia Direct Financial Incentives
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, $55,039,950 is reserved for small manufacturing projects; $15,725,700 for qualifying projects in Enterprise Communities, and $86,491,350 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 fifty or fewer employees and gross annual receipts of $5 million or less to apply for a linked deposit loan with an interest rate of one 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.
• 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 state tax credits.
Economic Opportunity Credit:
For qualified companies that create at least 20 new jobs (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 eligible businesses creating less than 10 new jobs per year, a $3,000 credit is allowed per new 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 program provides tax assistance to businesses that make qualified capital improvements of at least $50 million to an existing base of $100 million or more. It assesses the new capital addition at a salvage value of 5 percent for the first 10 years.
Manufacturing Investment Credit:
Allows a 50 percent corporate net income tax credit and franchise tax credit based on investment with no new job creation required. Beginning in 2009, the credit may offset up to 60 percent of severance, business franchise, and corporation net income tax liabilities.
Manufacturing sales tax exemption:
Materials and equipment purchased for direct use in manufacturing are exempt from the 6 percent state sales and use tax, including business materials purchased for manufacturing construction projects.
Strategic R&D Credit:
The credit allows for up to 100 percent tax offset for R&D projects. R&D expenses are exempt from sales tax.
Sales tax exemption for e-commerce vendors:
Some computer-related sales of tangible personal property and services are exempt from the consumer sales and services tax.
High-Growth Business Investment Tax Credit:
This credit is equal to 50 percent of the qualified investment made in certain companies that have been certified by the tax commissioner as eligible for the Strategic R&D Tax Credit. An investor or investor ownership group may use up to $50,000 of credit per year.
A reduction in the assessed value of all aircraft owned or leased by commercial airlines, charter carriers, private carriers, and private companies is provided for property tax purposes beginning July 1, 2008.
Tourism development incentive:
A company that invests in and operates a new or expanding tourism destination project may be eligible to retain some of the consumers' sales and services tax that it collects from its customers over a 10-year period on sales from operation of the tourism attraction or facility.
Tax increment financing:
Allows increases in property tax associated with qualified economic development and public improvement projects to assist with their long-term financing.
Warehouse "Freeport" tax exemption:
Goods in transit to an out-of-state destination are exempt from ad valorem property taxes when warehoused in West Virginia.
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 (varies per region).
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:
High-tech manufacturing businesses making computer and peripheral equipment, electronic components or semi-conductors can receive a tax credit to offset 100 percent of the Business Franchise Tax and 100 percent of the Corporate Net Income tax for 20 consecutive years.
West Virginia State Contact:
West Virginia Development Office
1900 Kanawha Blvd., East
Charleston, WV 25305-0311
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.