West Virginia Incentives and Workforce Development Guide
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Linked Deposit Loan 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% above published New York Prime, up to $250,000.
Special Rates of Electric Power for Industrial Consumers: 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 50,000 kilowatts of electric power at its West Virginia facilities under normal operating conditions; create or retain at least 25 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.
Tourism Matching Advertising Partnership Program: Provides reimbursable matching funds for direct advertising. Business applicants and their partners must provide a minimum of 50% of the total cost for programs at the $10,000 + level. For programs not exceeding $7,500, business applicants must provide 25% of the total cost.
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.
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: 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.
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.
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): A 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.
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. 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.
Five for Twenty-Five” Program ($2 Billion Primary (Fractionating) Plants, Secondary Plants And Tertiary Plants): Typical application: Ethane crackers and related petrochemical investments. Special property tax valuation applies for a period of 25 years to real property (excluding the value of unimproved land) and personal property having a combined original cost of which exceeds $2 billion to be constructed, located or installed at a facility, or a combination of facilities by a single entity or combination of entities engaged in a unitary business that:
- Is or will be classified under the North American Industry Classification System with a six digit code number 211112 (a primary facility), and;
- To manufacturing facilities that use one or more products produced at a facility with code number 211112 (secondary facilities) and;
- To manufacturing facilities that use products produced at a secondary facility.
The special property tax valuation is 5% of the cost of the qualified property instead of fair market value.
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 consumers’ sales and service tax.
Commercial Patent Incentives Tax Credit: Can offset up to 100% of the business franchise tax, corporation net income tax, or in the case of individual taxpayers, the personal income tax. The credit is based on a percentage of royalties, license fees and other consideration for developers of a patent or a percentage of net profit attributable to a patent used in a manufacturing process or product.
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 business and occupation tax, business franchise tax, corporate net income tax, and personal income tax on certain pass through income for 20 consecutive years.
High-Technology Business Property Valuation Act: Typical application: 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.
Film Industry Investment Act: Up to 31% of direct production and post-production expenditures can be converted to transferable tax credits to offset state taxes. Also, purchases and rentals of tangible personal property and purchases of services (excluding gasoline or special fuel, food or beverages) directly used in the activity of manufacturing a motion picture, TV program, music video, or commercial are exempt from the consumers sales and service tax and use tax.
Corporate Headquarters Credit: Companies that relocate their corporate headquarters to WV 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, 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% 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% 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.
Manufacturing Investment Credit: A tax credit is allowed against up to 60% 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.
Aircraft Valuation: 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.
Manufacturing Sales Tax Exemption: Purchases of materials and equipment for direct use in manufacturing are exempt from the 6% state sales and use tax, including building materials and process equipment purchased for construction of a manufacturing facility.
Research & Development Sales Tax Exemption: Purchases of tangible personal property and services directly used in research and development are exempt from the consumers’ sales tax.
Property Tax Increment Financing (TIF): Property 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.
Sales TIF: County and Municipal Economic Opportunity Districts (Sales Tax Increment Financing)-County Commissions and Municipalities are eligible to seek designation for a County or Municipal Economic Opportunity Development District, or Sales Tax Increment Financing (Sales TIF). This is a program whereby increases in sales tax collections in designated district may be used to either pay debt service or to pay as you go” for public infrastructure projects that support economic development in the District. The minimum amount of private investment necessary to receive such a designation is $75 million.
The Freeport Amendment: Exempts property from the West Virginia ad valorem property tax in two ways:
- 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.
- 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
Governor’s Guaranteed Work Force Program: Flexible, customized training program that 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.
Workforce Investment Act (WIA) Program: Customized training program 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: Offers customized job training awards to new and existing businesses. It supplies 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.
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.