WV Incentives | Finance, Loans, IRB, Workforce Development

A comprehensive list of West Virginia financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.


https://businessfacilities.com/2016/03/wv-incentives-and-workforce-development-guide/
A comprehensive list of West Virginia financial aid, loans, grants, abatements, workforce development, exemptions, funds & capital investment opportunities.
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West Virginia Incentives and Workforce Development Guide

WV Incentives | Finance, Loans, IRB, Workforce Development

For a list of West Virginia economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.

 

West Virginia’s highest priority is meeting your company’s needs. Part of the service includes 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. West Virginia is a prime location for global businesses. Learn more at www.westvirginia.gov or contact one of our business managers at (304) 558-2234.

FINANCING & GRANTS

Direct Loan Program: The Direct Loan Program is for applicants seeking a loan from the West Virginia Economic Development Authority (WVEDA) in the minimum amount of $50,000 and a maximum amount of $10,000,000. WVEDA can participate up to 45% in eligible fixed assets of qualifying projects and share a first lien on such assets with the participating lender, who also may participate up to 45%. The borrower must inject at least 10% equity into the project. The WVEDA has a two tiered pricing system.

  1. For loans of $50,000 to $800,000, the interest rate is the New York Prime rate minus 4%.
  2. Loans above $800,000 are priced at a rate equal to the U.S. Treasury Note rate of equivalent maturity (as quoted daily in the Treasury Bonds, Notes and Bills Section of the Wall Street Journal) plus three-quarters percent.

In both instances, the loans are fixed at closing and the interest rate has a floor of 4% and no ceiling. Additionally, the two tiers cannot be used in conjunction with each other.

Loan Insurance Program: Per the guidelines of this program, the WVEDA could insure up to 80% of a bank loan. The insured portion cannot exceed $500,000 and is for a maximum term of four years. Under this program, the applicant applies directly to the bank which negotiates collateral, interest rate and other loan terms in keeping with its own lending guidelines. Upon favorable review, the bank conditionally approves the loan and makes application to WVEDA for loan insurance. A non-refundable application fee of $500 payable to WVEDA must be submitted with the insurance application. WVEDA will assess a 1% closing fee on the insured portion of the loan, due when the Bank loan closes–the $500 application fee will be credited toward the closing fee. Loan proceeds may be used for fixed assets or other needs, such as inventory and working capital. However, construction loans and lines of credit do not qualify.

The WVEDA insurance period is up to four years, the bank’s loan term can be longer however. A renewal or extension may be requested by the bank prior to insurance expiration.

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.

Industrial Development Bonds (IDBs): The State of West Virginia has available each calendar year the authority to issue tax-exempt IDBs up to the maximum established by Section 146(d) of the United States Internal Revenue Code (currently $305,315,000 called the “statewide cap”). Under the provisions of the West Virginia Code, Section 21, Article 2C, Chapter 13, 40% of the “statewide cap” is made available to the West Virginia Housing Development Fund for the purpose of issuing qualified mortgage bonds, mortgage certificates or bonds for qualified residential rental projects. The remainder of the “statewide cap” is allocated under the provisions of the statute as follows:

  • 35% for nonexempt (small-issue) projects
  • 10% for projects in Empowerment Zones and Enterprise Communities, that are a special class of exempt facilities
  • 55% for exempt facility 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.

 

TAX INCENTIVES

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.

Commercial Patent Incentives Credit: The Commercial Patent Incentives Tax Credit can offset up to 100% of the 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 considerations for developers of a patent or a percentage of net profit attributable to a patent used in a manufacturing process or product when that patent has been developed in conjunction with an agreement with Marshall University or West Virginia University.

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.

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 businesses) 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, 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 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.

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

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 instead of fair market value.

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.

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

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, corporate net income tax, and personal income tax on certain pass through income for 20 consecutive years.

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. 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.

Lodging Exemptions: 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%) and exemption from the local hotel/motel tax (tax rate varies per region.)

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 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, including building materials and process equipment purchased for construction of a manufacturing facility.

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.

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.

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% 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.

West Virginia 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 consumer sales and service tax and use tax.

 

WORKFORCE TRAINING

Governor’s Guaranteed Work Force Program: This flexible, customized training program under the West Virginia Development Office, 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.

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.

Workforce Innovation & Opportunity Act (WIOA): The WIOA was created to provide state and local areas the flexibility to collaborate across systems in an effort to better address the employment and skills needs of current employees, jobseekers and employers.

WIOA aligns training with needed skills and matches employers with qualified workers. It provides incumbent worker training and promotes work-based training—increasing on-the-job training reimbursement rates to 75%. On-the-Job Training (OJT) provides opportunities for participants to “learn as they earn.” The employer also benefits by being reimbursed for part of the participant’s wages during the training period, while having the services of a full-time employee.

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