Companies seeking low tax rates and excellent incentives will have a hard time finding a more business-friendly location than Jefferson County. The state of West Virginia offers a number of attractive incentives to qualifying businesses, including sales tax and property exemptions for certain manufacturing and warehousing operations. The West Virginia Economic Development Authority (WVEDA) can also help with project financing through direct loans and issuance of tax-exempt industrial revenue bonds, and our local tax rates offer significant savings when compared to nearby metropolitan areas.
Here’s a look at the extensive number of benefits and incentives you can enjoy when you relocate or expand your business in Jefferson County, West Virginia:
Jefferson County, West Virginia Business Incentives
Companies that conduct business in Jefferson County benefit from a number of local business incentives such as low operating costs. In addition to the tax and business incentives listed below, we also offer three exclusive services for businesses growing or relocating in Jefferson County.
|Jefferson County Business Incentives|
|Nominal commercial impact fees||Commercial impact fees in Jefferson County are discounted by 99 percent.|
|Payment in lieu of tax (PILOT) program|
|Fast-track permitting||Depending on the complexity of your project, you may be able to secure fast-track permitting rights, plan status, schedules, and reviews that help you achieve your goals in a shorter than standard turnaround time.|
West Virginia Tax Incentives for Businesses
West Virginia and Jefferson County together offer numerous tax exemptions that removed approximately $126 million of business tax burden in FY 2012 and over $450 million during the past six years.
The state levies two primary business taxes: the corporation net income tax and the business franchise tax. Certain other taxes are levied upon specialized industries, such as severance tax on the production of natural resources and business and occupation tax on public utilities, electric power generators, natural gas storage operators, and producers of synthetic fuel.
|West Virginia Business Tax Incentives|
|Corporation Net Income Tax
|The corporation net income tax is imposed annually at a 2012 rate of 7.75 percent of federal taxable income allocated and apportioned to West Virginia. A scheduled phased tax rate reduction is intended to bring the tax rate to 6.5 percent.|
|Business Franchise Tax||The tax base is the net worth of the corporation or partnership as determined for federal income tax purposes. The 2012 tax rate is 0.27 percent of the tax base apportioned to West Virginia or $50, whichever is greater. There will be an annual phased reduction in the tax, and the tax is scheduled to be eliminated.|
|Business and Occupation Tax||The business and occupation tax is an annual privilege tax levied on public utilities, electric power generators, natural gas storage operators and producers of synthetic fuel.|
|Consumers’ Sales and Service Tax (CSST) and Use Tax||West Virginia has a 6 percent consumers’ sales and service tax and a use tax. Sales of goods and service to a manufacturer for direct use in manufacturing are exempt from CSST (for in-state purchases) and from the use tax (for out-of-state purchases).|
|Business Registration Tax||This is a one-time $30 tax required for each location in which business activity is conducted. Businesses generating annual gross income of less than $4,000 are exempt from payment but still must file to obtain the certificate. Business Registration Certificates issued on or after July 1, 2010 will be issued on a permanent basis and not subject to renewal.|
|Severance taxes are levied on the production of natural resources including ordinary processing commonly employed by the industry to obtain a salable natural resource product. The oil and gas production privilege will end at the well-mouth; the timber production privilege ends once the tree is severed, de-limbed, and topped; the limestone or sandstone production privilege ends immediately after severance from the earth; and the coal production privilege includes certain coal processing activities.The regular severance tax rate on timber production is 1.22 percent and the tax rate on other natural resources is generally 5 percent. Note that, effective for a 36-month period beginning with the first tax year that begins on or after January 1, 2010, the regular severance tax on timber is temporarily eliminated. However, timber production, along with coal, natural gas, and methane production, continues to be subject to an additional severance tax under the Workers’ Compensation Debt Reduction Act of 2005. Coal production is also subject to certain other taxes and may be subject to special severance tax rates.|
|Personal Income Tax||A graduated scale of rates is applied to taxable income of all residents, individuals, estates and trusts and on the West Virginia income of nonresidents. The starting point for computation of the tax is federal adjusted gross income. Individuals are allowed a $2,000 personal exemption for each personal exemption claimed on the federal return. Individuals older than 65 are allowed an additional $8,000 income deduction. Tax rates range from 3 percent on the first $10,000 of taxable income to 6.5 percent on income exceeding $60,000.|
|Property Taxes||In West Virginia, ad valorem property taxes are local taxes. The assessed value of non-utility property is set by locally elected county officials. Utility and industrial property is valued by a state board or agency. Guidelines are provided by the state to achieve equal and uniform assessed values for property throughout the state. Public utility property taxes are collected by the state and remitted to county sheriffs for distribution to local levying bodies. County sheriffs collect all other property taxes. Property is generally taxed on 60 percent of its appraised value.|
Other West Virginia Business Incentives
In Jefferson County, incentives don’t stop with favorable tax scenarios. We also support the following West Virginia business incentives that provide exemptions and programs for businesses located within West Virginia and Jefferson County:
|West Virginia Business Incentives|
|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 is required to: enter into negotiations with the utility; have 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 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.|
|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.|
|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.|
|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 percent) and exemption from the Local Hotel/Motel Tax (tax rate varies per region).|
A full list of state and local incentives can be accessed on the West Virginia Department of Commerce Development Office website.
Federal Tax Incentives – Opportunity Zones
The U.S. Department of Treasury has certified 55 “Opportunity Zones” across West Virginia, including six locations in Jefferson County, that are now eligible for a new federal tax incentive designed to encourage private investors to make capital investments in those areas. Opportunity Zones were created and added to the federal tax code as a result of the Tax Cuts and Jobs Act of 2017 that was approved by Congress in December 2017. Qualified Opportunity Zones retain the designation for 10 years.
New investments in Opportunity Zones can receive preferential tax treatment. Investors can defer tax on any prior gains until no later that Dec. 31, 2026, so long as the gain is reinvested in a Qualified Opportunity Fund, an investment vehicle organized to make investments in Qualified Opportunity Zones. In addition, if the investor holds the investment in the Opportunity Fund for at least 10 years, the investor would be eligible for an increase in its basis equal to the fair market value of the investment on the date that it is sold.