West Virginia Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in West Virginia. Some state economic development professionals outlined some of their details (WV Department of Commerce site click here).
West Virginia offers several tax credits, grants and loan programs along with technical assistance programs that are available to both new and existing businesses.  CNBC ranked West Virginia #48 for the cost of doing business in their 2014 America’s Top States for Business survey (Georgia was #1 in the same survey).    
Incentives and credits include:
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, this credit can offset up to 80 percent of specified business taxes for a period of up to 13 years. For wage rates higher than the statewide average, up to 100 percent of the specified taxes can be offset for up to 13 years.  For less than 20 new jobs 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.

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.

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.

Strategic R&D 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 also offers a mix of property and sales tax credits and exemptions as well as various workforce training and development assistance programs.
Compared to Georgia, West Virginia has:
  • Slightly higher corporate and personal income tax rates, which means that state tax credits are beneficial to business owners.
  • narrower range of incentives.
  • Pre-approvals required for many incentives
To summarize, West Virginia is not as competitive as Georgia for business tax incentives.  But their central location could provide advantages, depending on logistical needs.
Do any of your clients have West Virginia connections?  If so, get busy collecting information and planning early to maximize their incentive potential!