West Virginia Small Business Investment and Jobs Expansion Tax Credit

Small Business Investment and Jobs Expansion Tax Credit
bcs-small1
WV/BCS-SMALL
Rev. April, 2002

WEST VIRGINIA SMALL BUSINESS INVESTMENT AND
JOBS EXPANSION TAX CREDIT
INSTRUCTIONS AND FORMS
The following information, instructions and form are not a substitute for tax laws and regulations.

GENERAL INFORMATION
A Small Business Investment and Jobs Expansion Credit was enacted by the 1987 West Virginia Legislature as an extension to the
Business Investment and Jobs Expansion Credit (Super Credit). The purpose of the Small Business Investment and Jobs Expansion Credit
is to promote net employment growth within West Virginia. In return for net employment (e.g. new jobs) through capital investment, credit
is claimed against a portion of certain taxes imposed by this State that are attributable to the qualified investment. The credit is available to
an eligible small business taxpayer making a qualified investment in a new or expanded business facility in the State which resulted in the
creation of new jobs. (The amount of the qualified investment is determined by the cost, or other basis, and the useful life of the property.)

LEGISLATIVE CHANGES
The Super Credit was expanded in 1986 to include certified projects and relocation of corporate headquarters to the State. In 1987, the
Small Business Credit was added. Additional changes involving credit restrictions and new filing requirements were added in 1990.
In 1993 and 1994, the following major revisions were made to restrict the use of the credit:

·

The credit may not be applied against the Consumers Sales and Service Tax and Use Tax for purchases made on or after July 1,
1993.

·

There is a suspension of new credit entitlement for property placed into service or use after April 10, 1993. The suspension does
not apply to manufacturing; information processing; warehousing; goods distribution; destination-oriented recreation and tourism;
or to qualified investments for which credit applications were filed before April 10, 1993.

·

New language in the law strengthened the Tax Commissioner's authority to use alternate procedures when the payroll fraction for
determining tax attributable to qualified investment method does not fairly represent the tax liability directly attributable to the qualified
investment.

·

For tax years ending after May 31, 1993, all taxpayers claiming the Business Investments and Jobs Expansion Tax Credit (Super
Credit) must now defer 20% of the value of their annual credit until the tenth, eleventh, and twelfth tax years subsequent to the year
investment is placed in service or use.

·

Certain taxpayers also may claim an additional amount of credit to "free-up" super credit value lost as a result of the increase in the
minimum coal severance tax rate. This free-up credit may be used against Business Franchise, Corporation Net Income Tax and
Personal Income Tax.

·

Special recapture tax provisions may apply to taxpayers who place qualified investment property into service on or after March 12,
1994.

ELIGIBLE TAXPAYERS
Small business taxpayers which make qualified investment shall be allowed credit for the qualified investment placed in service
or use over three hundred sixty-five (365) consecutive days without regard to when the end of the taxpayer’s taxable year occurs. The
determination of the number of new jobs created for the first taxable year and the determination of median compensation shall be made at
the end of the three hundred sixty-five (365) day period. The annual gross receipts determination shall equal the highest annual gross
revenues of the business (including domestic and foreign affiliates, if the investment was placed into service after 3/9/90) from among the
past three tax years. If the business has been in business for less than three full tax years, then the annual gross receipts determination
shall equal the total receipts for the period in business, divided by the number of weeks in business, and multiplied by 52. The annual payroll
determination shall equal the payroll of employees of the business (including domestic and foreign affiliates, if the investment was placed
into service after 3/9/90) during the preceding 12 months, divided by the number of weeks in business, and multiplied by 52. Such
determinations shall be made for the next succeeding tax year and subsequent years based upon the taxpayer’s actual tax year.
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EXAMPLE:
A small business taxpayer commences business on August 1, 1998, and places its first item of property purchased
or leased for business expansion into service or use on that date. The small business elects to file its federal and State
income taxes and other taxes on a calendar year basis.
The small business taxpayer will be required to file its annual federal and State tax returns for its first tax year for the
period from August 1, 1998 to December 31, 1998. However, the small business taxpayer’s qualified investment upon which
credit will be based will be the qualified investment attributable to property purchased or leased for business expansion placed
in service or use by the small business taxpayer over the three hundred sixty- five (365) day period from August 1, 1998 to
July 31, 1999, notwithstanding the fact that the taxpayer’s tax year ended on December 31, 1998.
The determination of annual gross payroll and annual gross income shall be made at the end of the short tax year (ending
December 31, 1998). The determination of median compensation and the determination of the number of new jobs in place
attributable to qualified investment shall be made on July 31, 1999 based upon the preceding three hundred sixty-five (365)
days, including July 31, 1998.
The amount of qualified investment actually in service or use in the short tax year shall be the qualified investment upon
which credit for that year shall be based, i.e., property placed in service or use from August 1, 1998 to December 31, 1998.
Total qualified investment in service or use as of July 31, 1999, shall be the amount of qualified investment upon which the
1999 and subsequent year’s credit shall be based.
The current tax year of the taxpayer during which the three hundred sixty-five (365) day period ends (on July 31, 1999)
is the tax year of January 1 to December 31, 1999.
The amount of credit allowable is determined by multiplying the amount of the taxpayer’s qualified investment in “property purchased
or leased for business expansion” by the taxpayer’s new jobs percentage.

Small business project - A small business may apply to the Tax Commissioner under West Virginia Code § 11-13C-4b for project
certification, if that project will create at least ten (10) new jobs. Only multiple year projects may be certified for small business tax credit.
Multiple party projects may not be certified for small business credit participants. The small business credit is allowable
for qualified investment property purchased or leased after June 30, 1987.
A taxpayer making qualified investment and operating with a multiple year certified project would use substantially the same procedure
as a taxpayer entitled to credit for investment made over one (1) year except that qualified investment would be made over three (3) taxable
years. The amount of qualified investment actually in service or use at the end of each tax year is the amount upon which credit for such tax
year is determined.
The maximum allowable credit is determined by multiplying the qualified investment by the new jobs percentage.

QUALIFIED INVESTMENT
Qualified investment property is property constructed, purchased, leased or transferred into West Virginia and placed in service or use,
as a component of a new or expanded business facility located in this State. The amount of the qualified investment is determined by the
cost, or other basis, and the useful life of the property.
Critical elements in the determination of qualified investment property for purposes of this credit are how, and from whom, the property
is acquired; the acquisition date; date and term of a lease; transfer date; date placed in service or use in this State; as well as the useful life
of the property.
For the Business Investment and Jobs Expansion Credit, qualifying investment property acquired and placed in service or use in this State
on or after March 1, 1985 may be counted toward the credit.

QUALIFIED INVESTMENT PROPERTY MAY INCLUDE:
1.

Natural resources in place, purchased or leased on or after July 1, 1987, but prior to March 10, 1990, capable of sustained
production for a period of ten (10) or more years.

2.

Real property and improvements thereto, having a useful life of four (4) or more years, placed in service or use, in West Virginia,
on or after July 1, 1987.

3.

Real property and improvements thereto, or tangible personal property acquired by written lease with a primary term of ten (10) or
more years, placed in service or use, in West Virginia, on or after July 1, 1987.

4.

Depreciable or amortizable tangible personal property, placed in service or use in West Virginia, on or after July 1, 1987, with a
useful life of four (4) or more years at the time the property is placed in service or use in this State.

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5.

Tangible personal property acquired by written lease having a primary term of four (4) or more years that was commenced and
executed on or after July 1, 1987.

6.

Tangible personal property owned or leased, used at a business location outside this State which is moved into this State on or after
July 1, 1987. If owned, property must be depreciable or amortizable and have a useful life of four (4) or more years remaining
at the time the property is placed in service or use in this State. If leased property, the primary term of the lease remaining at the
time the property is placed in service or use in this State, must be four (4) or more years.

QUALIFIED INVESTMENT PROPERTY MAY NOT INCLUDE:
1.

Property owned or leased, for which the Tax Credit for Industrial Expansion (former W.Va. Code § 11-13C-1 et seq., repealed April
13, 1985); Tax Credit for Industrial Expansion and Revitalization and for Research and Development Projects (W.Va. Code §
11-13D-1 et seq.) et al; Tax Credit for Coal Loading Facilities (W.Va. Code § 11-13E-1 et seq.); has been taken.

2.

Repair costs, unless capitalized for federal income tax purposes.

3.

Airplanes.

4.

Property which is primarily used outside this State.

5.

Property which is acquired incident to the purchase of the stock or assets of the seller. This restriction can be waived by the Tax
Commissioner.

6.

Natural resources in place purchased or leased prior to March 10, 1990, and not subject to a statutory transition rule or prior to
March 1, 1985, or pursuant to an option acquired prior to March 1, 1985 but exercised on or after March 10, 1990.

7.

Property purchased or leased on or after March 10, 1990, the cost of which cannot be quantified when such property is placed
in service.
Generally, property acquired from a related taxpayer or by one component member of a controlled group from another member of
the same group or property which has a carryover federal income tax basis in the hands of the purchaser will not qualify as investment
property.

DATE PLACED IN SERVICE OR USE
Property is considered to be placed in service or use in the earlier of:
1.

The taxable year in which, under the taxpayer’s depreciation practice, the period for depreciation for such property begins.

2.

The taxable year in which the property is placed in a condition or state of readiness and availability for a specifically assigned function.

REQUIRED RECORDS
A taxpayer claiming this tax credit must maintain records to establish, for each item of qualified property:
(1) Its identity.
(2) Its actual or reasonably determined cost.
(3) Its straight line depreciation.
(4) The month and taxable year in which it was placed in service.
(5) The amount of credit taken.
(6) The date it was disposed of or otherwise ceased to be qualified property.
Such records must be retained for a period of three (3) years after the last year for which the credit is claimed.
The tax credit computation schedule is designed to accommodate all or any part of these tax credits. Contained within the schedule and
in the instructions for completing this schedule is more detailed information for completion of the Small Business Investment and Jobs
Expansion Credit.

COST OR OTHER BASIS
1.

The cost of purchased property may not include the value of property given in trade or exchange for the property purchased.

2.

The cost of replacement property may not include any insurance proceeds received as compensation for property damaged or
destroyed by fire, flood, storm or other casualty or stolen.
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3.

To qualify as investment property, natural resources in place must be purchased only during specific time periods or subject to a
statutory transition rule, and must be capable of sustained production for a period of at least ten (10) years. The cost for purchased
natural resources in place, that meet these qualifications, is 100% of the purchase price that is attributable to at least ten (10) years
of production, but not more that twenty (20) years of production.

4.

The cost of real property with a written primary lease term of ten (10) or more years is 100% of the rent reserved for the primary term
of the lease, not to exceed twenty (20) years.

5.

For leased natural resources in place which qualify, capable of ten or more years of sustained production, the cost is 100% of the
rent reserved for the primary term of the lease, not to exceed twenty years, or royalties paid for ten years. Leases of natural resources
must have a primary term of at least ten years.

6.

The cost of tangible personal property with a written primary lease term of at least four (4) years but less than six (6) years is one
third (1/3) of the rent reserved for the primary term of the lease.

7.

For tangible personal property with a written primary lease term of at least six (6) years but less that eight (8) years, the cost is two
thirds (2/3) of the rent reserved for the primary term of the lease.

8.

For tangible personal property with a written lease term of eight (8) or more years, the cost is 100% of the rent reserved for the primary
term of the lease, not to exceed twenty (20) years.
The rent reserved may not include rent for any year subsequent to the expiration of the book life of the property, determined by use
of the straight line method of depreciation.

9.

For qualifying property purchased for multiple use, the cost must be pro-rated.

10. For self-constructed property, the cost is the amount properly charged to the capital account for depreciation in accordance with
federal income tax law.
11. The cost of property transferred into this State is determined based on the remaining useful life of the property at the time it is placed
in service or use in this State. The cost is the original cost of the property to the taxpayer less straight line depreciation allowable
for tax years, or portions of tax years, the property was used outside West Virginia.
For leased tangible personal property transferred into this State, the cost is based on the period remaining in the primary term of the
lease after the property is brought into this State for use in a new or expanded business. The cost is the rent reserved for the remaining
period of the primary lease term, not to exceed twenty (20) years or the remaining useful life, whichever is less.
12. For leased property placed into service on or after March 10, 1990, for which the cost is not quantifiable at the outset of the lease,
only the quantifiable portion, if any, may be aggregated as a qualified investment.

JOBS CALCULATION
The new jobs percentage is based on the number of new jobs created in this State that are directly attributable to the qualified investment
in a new or expanded business facility. The number of new jobs created by the investment is determined by the net increase in employment
by the business (or controlled group of businesses) in West Virginia over a base year level. The base year is the 12 month period immediately
preceding the placement of qualified investment into service or use. The hours of qualified part-time employees may be aggregated to
determine the number of equivalent full-time employees for the purpose of ascertaining the number of new jobs created.
A New Job is one that did not exist in the business of the taxpayer in this State prior to the investment in the new or expanded business
facility. This position must be filled by a new employee. The number of new jobs is the net of new jobs created less any jobs lost in any part
or segment of the employer's business in West Virginia over the same time period.
If at least ten (10) new jobs are created and filled during the taxable year in which the qualified investment is placed in service or use,
the applicable new jobs percentage shall be thirty percent (30%): Provided, That for each new job over ten (10), up to forty (40) such additional
new jobs, the applicable new jobs percentage shall be increased by adding one half of one percent (.5%), with the maximum new jobs
percentage not to exceed fifty percent (50%).
During each of the remaining nine (9) years of the ten (10) year credit period, the annual new jobs percentage shall be based on the average
number of new jobs that were filled during that taxable year: Provided, That for purposes of estimating the new jobs percentage that will be
applicable for each subsequent credit year, the taxpayer shall use the new jobs percentage allowable for the taxable year immediately prior
thereto, and in the annual income tax return filed under West Virginia Code, Chapter § 11-13C-7a for the then current tax year, on the average
number of new employees employed in new jobs during that year, (determined on a monthly basis) and calculated as a direct result of taxpayer’s
qualified investment.
For purposes of the small business tax credit, the taxpayer estimates the number of new jobs which will be in place for the first taxable
year in which qualified investment is placed in service or use, and the taxpayer files monthly or quarterly tax returns and pays estimated tax
for the estimated number of new jobs. At the end of the taxable year, the actual number of new jobs in place attributable to qualified investment

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is determined. The amount of tax paid in monthly and quarterly tax returns for years two (2) through ten (10) is then based upon estimated
credit calculated using the prior year’s actual new jobs number.
After the close of the taxable year for years two (2) through ten (10), annual returns are filed reconciling the estimated tax paid in the monthly
and quarterly filings through the year and the actual amount of annual tax due based upon the actual new jobs percentage for the year
determined at the end of the year.
The annual payroll, annual gross receipts and annual median compensation requirements applicable to any small business shall be
determined when qualified investment is first placed in service or use. The median compensation requirement is subject to inflation adjustment
during the ten (10) through thirteen (13) year credit period.
The following constraints apply for tax years 1987 thru 2001:

SMALL BUSINESS CREDIT CRITERIA
YEAR

ANNUAL
PAYROLL

1987 -88

$1,500,000

1989

1,562,050

ANNUAL GROSS
RECEIPTS

MEDIAN ANUUAL
COMPENSATION

or

$5,000,000

$11,000

or

5,206,850

11,450

1990*

1,700,000

and

5,500,000

12,000

1991

1,716,300

and

5,721,050

12,550

1992

1,806,950

and

6,023,200

13,250

1993

1,862,200

and

6,207,350

13,650

1994

1,919,100

and

6,397,150

14,050

1995

1,969,150

and

6,563,800

14,400

1996

2,025,150

and

6,750,600

14,850

1997

2,081,100

and

6,937,000

15,250

1998

2,137,800

and

7,126,050

15,650

1999

2,174,050

and

7,246,950

15,900

2000
2001

2,212,000
2,280,800

and
and

7,373,450
7,602,650

16,200
16,700

* Beginning with investments placed into service in 1990, the small business criteria must also apply to the taxpayer's controlled group.

Annual payroll - The annual payroll of a business shall include the employees of the business whether employed on a full-time, parttime, temporary, or other basis, during the preceding twelve (12) months. The payroll of the business shall be divided by the number of weeks,
including fractions of a week that it has been in business, and the result multiplied by fifty-two (52).
Annual gross receipts - The annual gross receipts of a business which has been in business for three (3) or more complete fiscal
years means the highest annual gross revenues of the business from among the last three (3) fiscal years. For purposes of this definition,
the gross revenues of the business includes revenues from sales of tangible personal property and services, interest, rents, royalties, fees,
commissions and receipts from any other sources, but less returns and allowances, sales of fixed assets, interaffiliated transactions between
a business and its domestic and foreign affiliates, and taxes collected for remittance to a third party, as shown on its books for federal income
tax purposes.
Median annual compensation - The median annual compensation shall be determined by arranging the annual compensation
amount of each employee in a hierarchy ranking from lowest to highest and then selecting that element from the range of so arranged amounts
(elements) which is the middle number, (i.e., that element which has an equal number of elements in the range of elements which rank
above and below it).
In the case of a range having an even number of elements, the median is the average of the two (2) middle numbers, i.e., one half
(1/2) of the sum of the highest ranked element of the lower half of the range and the lowest ranked element of the upper half of the range.
The compensation of an employee employed on a seasonal or temporary basis shall not be counted in the determination of the median
salary.
For purposes of determining median compensation for part-time employees, the salaries of such employees shall be annualized.
The salary of a part-time employee is annualized by multiplying the hourly compensation of the part-time employee by the number of hours
in the normal work year for full-time employees of the business.
The annualized compensation for each part-time employee is treated as an element in the range of numbers used to determine median
annual compensation of the business.
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EXAMPLE:
A part-time employee of a business works 27 hours per week, 50 weeks per year, and is not entitled to paid vacation.
The normal work week of a full-time employee of the business is 40 hours per week, and full-time employees are paid for
52 weeks per year, including 2 weeks paid vacation. The part-time employee makes $6.00 per hour. The number of hours
in a normal work year for full-time employees is:
40 Hours/Week x 52 Weeks Per Year = 2080 Hours/Year
Although the part-time employee works only 1350 hours per year for total annual gross compensation of $8,100, the
annualized compensation of the part-time employee would be 2080 Hours/Year x $6.00 Per Hour = $12,480.
The figure to be used in the range of numbers determining median compensation is $12,480, and not $8,100. However,
for purposes of finding annual gross payroll for the determination of whether a business has annual gross receipts and annual
gross payroll in amounts which are less than the threshold amounts specified, the actual payroll, which would include only
$8,100 for this employee, would be used.
The term new employee means a person residing and domiciled in this State, hired by the taxpayer to fill a position or a job in this State
which previously did not exist in taxpayer’s business enterprise in this State prior to the date on which the taxpayer’s qualified investment is
placed in service or use in this State. In no case shall the number of new employees directly attributable to such investment for purposes
of this credit exceed the total net increase in the taxpayer’s employment in this State.
A person shall be deemed to be a new employee only if such person’s duties in connection with the operation of the business facility
are on a regular, full-time and permanent basis.
Full-time employment means employment for at least one hundred forty hours per month at a wage not less than the prevailing state
or federal minimum wage, depending on which minimum wage provision is applicable to the business.
Regular and part-time employment provides that such person is customarily performing their duties at least twenty hours per week
for at least six months during the taxable year.
Permanent employment does not include employment that is temporary or seasonal and therefore the wages, salaries and other
compensation paid to such temporary or seasonal employees will not be considered for purposes of the job creation criteria.

FORFEITURE AND REDETERMINATION
If, during any taxable year, property used as a qualified investment for this credit is disposed of prior to the end of its useful life, or ceases
to be used in an eligible business of the taxpayer in this State prior to the end of its useful life, any unused portion of the credit attributable
to that investment is forfeited for the taxable year and subsequent years.
The amount of credit allowed in all earlier years must be redetermined by reducing the percentage of cost of the property to the percentage
applicable to the period of time the property was actually used in the new or expanded business facility. The redetermination is not required
for the earlier years if the forfeiture occurs because the property is damaged or destroyed by fire, flood, storm or other casualty, or is stolen.
The forfeiture and redetermination provisions also apply if, during any taxable year, the taxpayer ceases operation of a business facility
in this State, for which credit was allowed, before expiration of the useful life of the qualified investment property.
If the average number of employees employed in positions created because of and directly attributable to the qualified investment falls
below the minimum number of new jobs created upon which the taxpayer’s annual credit allowance is based, the taxpayer shall calculate what
the annual credit allowance would have been had the new jobs percentage been determined based upon the average number of employees,
for the then current taxable year, employed in positions created because of and directly attributable to the qualified investment. The difference
between the result of this calculation and the taxpayer’s annual credit allowance for the qualified investment shall be forfeited for the then
current taxable year, and for each succeeding taxable year, unless the taxpayer’s average employment in positions directly attributable to
the qualified investment once again meets the level required to enable the taxpayer to utilize its full annual credit allowance for that taxable
year.
In the event of forfeiture and redetermination, the taxpayer must file a reconciliation statement with the annual return for the year in which
the forfeiture occurs and pay any additional taxes owed due to the reduction of the credit for the earlier year, plus interest and applicable
penalties. For investments placed into service on or after March 12, 1994, a recapture tax may apply in lieu of the reconciliation procedure.
A mere change in the form of conducting business, as long as the property is retained in a business in this State and the taxpayer retains
a controlling interest in the successor business will not activate the forfeiture and redetermination provisions.
If the business is transferred or sold to a successor business which continues to operate the business facility in this State, any available
credit remaining is allocated to the successor for subsequent tax years and redetermination for earlier years is not required.

New Jobs percentage - The annual new jobs percentage is based on the number of new jobs created in this State by the taxpayer
that is directly attributable to taxpayer’s qualified investment.
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INSTRUCTIONS

PART I

SECTIONS 1 - 3

These sections should be completed for qualified investment placed in service or use in this taxable year, unless an election to defer the
credit was made. If such election was made for the prior year, then these sections should be completed for qualified investment placed in
service during that prior year.
If this is a certified multiple year project, then include qualified investment placed in service or use in the prior year, (if an election to defer
credit was made for the previous year) along with current year qualified investment.
Leased property placed into service or use prior to January 1, 1990 for which the cost is not quantifiable at outset should be reported
in section 5 (see instructions below).
Make entries in each column as indicated on the credit schedule, as applicable.

SECTION 4
Enter the amount from Section 1, line (d), Column 3 on line (a) of Section 4; the amount from Section 2, line (d), Column 3 on line (b),
of Section 4; the amount from Section 3, line (c), Column 3 on line (c), of Section 4.
Add the amounts on lines (a)(b) and (c) and enter the result on line (d). When claiming the Small Business Credit, divide the amount on
line (d) by ten (10) and enter the result in Part III, Section 1, line 1.

SECTION 5
(Only applies to non-quantifiable leases of property first placed in service or use or leased prior to March 10, 1990).
The qualified investment property may include leased properties for which the cost is not quantifiable at the outset of the lease.
In this event, the cost of these properties must be determined annually and is the amount of royalties or payments actually paid to the
owner of the properties during each taxable year for a total period of ten (10) years for realty, or for the primary term of a lease of tangible
personal property for at least four (4) years up to ten (10) years, multiplied by the appropriate percentage determined according to the lease
term and useful life of tangible personal property.
The amount of such cost each year, multiplied by the new jobs percentage, (determined at the time the leased properties are placed in
service or use) divided by ten (10), establishes the allowable credit each year for ten (10) successive years, beginning with the year in which
the payments were made.
Make entries in each column in Part I, Section 5 as indicated on the credit schedule, as applicable.
Enter the amount from line (d), Column 3 of Part I, Section 5 in Part III, Section 2, line 1.

PART II - SECTION 1
NEW JOBS
Line 1. Enter in Column 1, the total number of employees in West Virginia prior to the time the qualified investment in a new or expanded
business facility was placed in service or use in this State. Enter in Column 2, the total dollar amount of the annual payroll of those employees.
Line 2. Enter in Column 1, the total number of employees in West Virginia this taxable year. Enter in Column 2, the total dollar amount
of the annual payroll of those employees.
Line 3. Enter in Column 1, the average number of employees in West Virginia during this taxable year. (The average is attained by
adding the number of employees in West Virginia at the beginning of the year to the number of employees in West Virginia at the end of the
year and dividing the result by 2).
Line 4. Enter in Column 1, the number of new jobs in West Virginia directly attributable to the qualified investment in the new or expanded
business facility in this State. Enter in Column 2, the total dollar amount of the annual payroll of those employees.
Line 5. Enter in Column 1, the number of jobs, filled both by West Virginia domiciled West Virginia residents and by nonresidents working
in West Virginia, created during and subsequent to the new jobs redetermination period, which are directly attributable to the qualified
investment.
Enter in Column 2, the total dollar amount of the payroll, during the taxable year, of these jobs directly attributable to the qualified
investment.

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SECTION 2
PAYROLL FACTOR COMPUTATION
Line 1. Enter the amount of compensation paid to employees hired as a result of the new investment.
Line 2. Enter the amount of compensation paid to all West Virginia employees.
Line 3. Divide line 1 by line 2 and round to six decimals. Enter result on Part IV, Column 2.

SECTION 3
AFFILIATED COMPANIES OR CONTROLLED GROUP
AFFILIATES
The term affiliates includes all concerns which are affiliates of each other when either directly or indirectly owned, the concern controls
or has the power to control both. In determining whether concerns are independently owned and operated and whether or not affiliation exists,
consideration shall be given to all appropriate factors, including common ownership, common management and contractual relations.
CONCERN
The term concern means any business entity organized for profit (even if its ownership is in the hands of a nonprofit entity), having a
place of business located in this State, and which makes a contribution to the economy of this State through payment of taxes, or the sale
or use in this State of tangible personal property, or the procurement or providing of services in this State, or the hiring of employees who work
in this State.
CONTROLLED GROUP OF CORPORATIONS
For purposes of these regulations, the term controlled group of corporations means any group of corporations which is either a
parent-subsidiary controlled group, a brother -sister controlled group, or a combined group.
Parent - subsidiary controlled group - One or more chains of corporations connected through stock ownership with a common
parent corporation if stock possessing at least fifty percent (50%) of the combined voting power of all classes of stock.
Brother - sister controlled group - The term brother - sister controlled group means two or more corporations if the same
five or fewer persons who are individuals, estates, or trusts own (directly or indirectly) singly or in combination, stock possessing at least fifty
percent (50%) of the total combined voting power of all classes of stock.
Combined Group - The term combined group means any group of three or more corporations, if each corporation is a member
of either a parent - subsidiary controlled group of corporations or a brother - sister controlled group of corporations, and at least one of such
corporations is the common parent of a parent - subsidiary controlled group and also is a member of a brother - sister controlled group.
Section 3, enter the names of the affiliated companies or member of the controlled group along with the FEIN Number of each.

SECTION 4
ANNUAL PAYROLL
Line 1.

Enter the payroll of all firms operating on a full-year basis during the preceding year.

Line 2a. Enter the total payroll of all firms operating on a partial year basis during preceding year.
Line 2b. Enter the amount of payroll in line 2-a divided by the number of weeks in operation including the fractions.
Line 2c. Enter the amount in line 2-b multiplied by 52 weeks.
Line 3.

Enter the sum of lines 1 and 2-c.

SECTION 5
ANNUAL GROSS RECEIPTS
Line 1.

Enter the gross receipts for each year the firm was in operation during the preceding three years.

(Complete line 2 (a-d) if firm was in operation for less than three (3) complete fiscal years).
Line 2 (a).

Enter the total gross receipts for the entire period in operation.

Line 2 (b). Enter the number of weeks, including the fraction of a week, firm was in operation.
Line 2 (c).

Line 2 (a) divided by line 2 (b).
8

Line 2 (d).

Line 2 (c) multiplied by fifty two (52) weeks. (This is the derived Annual Gross Receipts).

SECTION 6
MEDIAN ANNUAL COMPENSATION
Arrange the annual compensation amount of each employee in a hierarchy ranking such amounts from lowest to highest, then select the
middle number.
*Information as to required certification is included on the computation schedule immediately following Part II.

PART III - COMPUTATION OF CREDITS
SECTION l
COMPUTATION OF SMALL BUSINESS INVESTMENT AND JOBS EXPANSION TAX CREDIT
(Quantifiable Investment)
Line 1. The amount of the qualified investment was determined in Part I. Enter the amount from Part 1, Section 4, line (d).
Line 2. For Small Business Investment and Jobs Credit, the new jobs percentage is based on the number of new jobs created in this
State that are directly attributable to the qualified investment in a new or expanded business facility located in West Virginia.
The hours of part-time employees may be aggregated to determine the number of equivalent full time employees for the purpose of
determining the applicable new jobs percentage, but not for the purpose of determining when a job is attributable to the qualified investment
for use in the tax apportionment payroll fraction to be shown in Part IV of this schedule.
A job is attributable to the qualified investment if:
1.

The employee’s service is performed or his base of operations is at the new or expanded facility.

2.

The position did not exist prior to the making of the investment in the new or expanded facility.

3.

The position exists only because of the investment in the new or expanded facility.

The number of new jobs created by the investment is determined by the net increase in employment by the business in West Virginia.
The hours of part-time employees may be aggregated to determine the number of equivalent full-time employees for the purpose of
ascertaining the number of new jobs created.
The determination of the number of new jobs created by the investment is made each year beginning with the first year in which qualified
investment is placed in service or use. A small business taxpayer is allowed a credit for a qualified investment in a new or expanded business
facility in this State that results in the creation of at least ten (10) new jobs.
Enter on line 2 the applicable new jobs percentage.
Line 3. Multiply the amount on line 1 by the percentage on line 2. This is the total allowable credit.
Line 4. The allowable credit is taken over a ten (10) year period, one-tenth each taxable year. The credit period begins with the taxable
year in which the qualified investment is placed in service or use, in West Virginia, or with the next succeeding tax year. In either event, the
taxable year percentage is ten percent (.10).
Line 5. Multiply the amount on line 3 by ten percent (.10). The result is the amount of credit for the taxable year.

SECTION 2
CALCULATION OF SMALL BUSINESS INVESTMENT AND JOBS EXPANSION TAX CREDIT
(Nonquantifiable Investment)
If you have included, as part of your qualified investment, property for which the cost is not ascertainable at the time the property is placed
in service or use, (Part 1, Section 5, line (d), Column (3)), this section must be completed each year for ten (10) successive years.
This section of the computation schedule, as well as Section 5 of Part I, must be completed each year, for ten (10) years, and attached
to the annual tax return filed for each of the years.
The amount of credit computed annually in this section, plus the annual credit allowance computed on line 5 of Section 1, Part III, (if any),
is the amount of credit available each year.
Line 1. The amount of the qualified investment on this type of property was determined in Part 1. Enter the amount from Part I, Section
5, line (d), Column (3).
Line 2. Read the information and instructions for Part III, Section 1, line 2. Enter the applicable percentage.

9

Line 3. Multiply the amount on line 1 by the percentage on line 2. This is the total allowable credit for qualifying investment made this
year in property for which the cost is not quantifiable.
Line 4. The taxable year percentage is ten percent (.10).
Line 5. Multiply the amount on line 3 by the percentage on line 4. This is the credit allowable each year for ten successive years beginning
with the year in which the royalties or payments were made.
Line 6. Beginning with the second year of the ten (10) year credit period, the amount of credit available is the sum of the annual credit
as computed for the second year and the annual credit as computed for the first year. This process is followed in succeeding years until the
total allowable credit computed separately for each of the ten (10) successive years is used or forfeited.
Enter on line 6, beginning with the second year, the cumulative amount of annual credit allowance for a prior year or years from
nonquantifiable investment.
Line 7. Add the amounts on lines 5 and 6. This is the amount of credit available for this taxable year from nonquantifiable investment.

PART IV - TAX CREDIT COMPUTATION SCHEDULE
The credit may be applied to the taxes as listed and must be applied in the order shown.
Column 1.

Enter your tax liability, if any, for each of the taxes listed, determined before application of any other allowable credits or
exemptions. In the case of Business Franchise Tax, the tax liability is the amount remaining after deductions for any
Subsidiary Credit, Business and Occupation Tax Credit and Bank Shares Tax Credit available to the taxpayer.

Column 2.

Enter the payroll factor calculated in Part II, Section 2.

Column 3.

Multiply the tax liability in column 1, for each of the taxes by the payroll factor in Column 2 (where applicable), and enter
the result in Column 3. This is the amount of tax liability attributable to the qualified investment.
The credits may be used to offset eighty percent (80%) of the tax attributable to the qualified investment of the taxes listed.
The credits must be claimed against the taxes in the order shown.
Legislation enacted in early 1990 eliminated the application of the Business Investment and Jobs Expansion Credit against
the West Virginia Severance Tax. As a result, line (b)(Severance Tax) should be skipped unless the qualified investment
was placed into service or use prior to January 1, 1990 or the taxpayer qualified under one of the transition rules of W. Va.
Code § 11-13C-14 and filed Form WV/BCS- SEV (Notice of Intent to Claim Credit Against Severance Tax) with the
Department on or before July 2, 1990.

Column 4.

Multiply the amounts in Column 3 by the percentages shown and enter the result in Column 4.

Column 5.

Enter the amount of your annual credit allowance that you are applying to each of the taxes listed. The annual credit
allowance is applied to the first of the listed taxes to which you are subject. If the annual credit allowance is used up, you
may then use any rebate credit carried forward from prior years against tax subject to credit. If there is annual credit
allowance or rebate credit carried forward from prior years remaining after that application, it is next applied to the second
of the listed taxes. Follow this procedure for each of the taxes to which you are subject, carefully monitoring the application
to see that the amount of the annual credit allowance used does not exceed the annual credit allowance available and/or
rebate credit carried forward from prior years. Add the amounts in Column 5 and enter the result on line g, Column 5.
If the annual credit allowance and rebate credit carried forward from prior years is absorbed in the application to the various
taxes, you will have no entries for Columns 6 and 7. If the annual allowance is absorbed you will not need to complete Part
V.
If, after application to the various taxes, you have annual credit allowance or rebate credit carried forward from prior years
remaining, the unused credit is applied as a rebate of: 80% of ad valorem property taxes on all property attributable to the
qualified investment; 80% of unemployment compensation tax attributable to the compensation of new employees, filling
the new jobs that are attributable to the qualified investment; and 20% of workers compensation premiums attributable to
the compensation paid to new employees, filling the new jobs that are attributable to the qualified investment.
The rebate amount, or the remaining credit, whichever is less, may be applied to the remaining 20% of the various taxes
attributable to the qualified investment.
Subtract the amount in Column 4, if any, for each of the taxes from the amount in Column 3 and enter the result in Column
6. This is the amount of taxes against which the rebate may be applied. Add the amounts in Column 6 and enter the result
on line g, Column 6.

Column 7.

This column cannot be completed until Part V through Section 2, Line (g) is completed. Enter the smaller of Part V, Section
2, Line (g) and Part IV, Column 6. (The total of the entries in column 7 cannot exceed the smaller of Part V, Section 2, Line
(g) and Part IV, Column 6, Line g).
10

Column 8.

Enter the sum of Column 5 and Column 7 for each of the applicable taxes.

The New Twenty Percent Annual Credit Deferral
For tax years ending after May 31, 1993, taxpayers claiming the Business Investment and Jobs Expansion Tax Credit (Super Credit) must
now defer 20% of the value of the annual credit applications until the tenth, eleventh, and twelfth tax years subsequent to the year qualified
investment is placed into service or use. The amount of credit deferment is determined after the calculations have been made for the Super
Credits claimed in step one and step two. Twenty percent of the total of the credit claimed is to be carried forward annually until the eleventh
year of the credit. Then, the deferred amount is drawn upon as a credit to be taken against the taxpayer’s liability for business taxes in the
same order as mandated for the taking of the Super Credits. The deferred credits may offset up to one hundred percent (100%) of the tax
liability directly attributable to the qualified investment and new jobs only in the tenth, eleventh and twelfth subsequent tax years. Those with
Severance Tax eligible credits must separate the deferrals of those credits from other credit deferrals.
Column 9.

Enter 20% of Column 8. This amount is a reduction of the credit actually claimed, not of the credit available.

Column 10.

Subtract Column 9 from Column 8 and enter the result. Enter the result of line g, Column 10 on Part VII, Section 1 (d) for
the applicable year.

The New Additional Allowance for Minimum Coal Severance Taxpayers
(“Free-Up" Credit) - W.Va. Code § 11-13C-5 (p)
Beginning June 1, 1993, the Minimum Coal Severance Tax rate increases from 50 cents per ton to 75 cents per ton. To lessen the
impact on taxpayers affected by the increased minimum tax on coal, these taxpayers may possibly be able to free-up a portion of the credit
previously calculated. The value of this free-up credit is equal to the lesser of (a) one-third of the taxpayer’s minimum severance tax on coal
(i.e. the minimum tax imposed at a rate of 75 cents) or (b) the amount of the taxpayer’s net minimum severance tax on coal. The net minimum
severance tax on coal is the amount of the State Severance Tax on coal severed and extracted by the taxpayer after application of available
Super Credits and the annual $500 exemption.
Free-up credit may be used against Business Franchise Tax, Corporation Net Income Tax and Personal Income Tax.
Column 11.

Subtract Column 10 from Column 3. This free-up credit may be used against Business Franchise Tax, Corporation Net
Income Tax, and Personal Income Tax.

Column 12.

Enter the amount from Part VI, line 9 applicable to Business Franchise Tax, Corporation Net Income Tax and Personal
Income Tax liabilities.

Column 13.

Enter the sum of the entries in Column 10 and Column 12 for each of the listed taxes in the amount to be claimed as credit
on the appropriate annual returns filed.

Part V - REBATE
Section 1 Determination of Maximum Rebate Allowable
Line a, Column 1. Enter the total amount of ad valorem property taxes imposed and paid pursuant to West Virginia Code § 11-8, for the
taxable year.
Line a, Column 2. Enter the amount of such property taxes imposed and paid that are directly attributable to the qualified investment in a
new or expanded business facility, for the taxable year. Multiply the amount in Column 2, line a by the percentage shown
in Column 3, line a and enter the result in Column 4, line a.
Line b, Column 1. Enter the total amount of Unemployment Compensation Tax imposed and paid under West Virginia Code § 21A-5, for
the taxable year.
Line b, Column 2. Enter the amount of such tax imposed and paid that is directly attributable to the compensation of new employees filling
the new jobs that are attributable to the qualified investment. Multiply the amount in Column 2, line b by the percentage
shown in Column 3, line b and enter the result in Column 4, line b.
Line c, Column 1. Enter the total amount of Workers Compensation premiums imposed and paid under West Virginia Code § 23-2, for the
taxable year.
Line c, Column 2. Enter the amount of such premiums imposed and paid that is attributable to the compensation paid new employees filling
the new jobs that are directly attributable to the qualified investment.
Multiply the amount in Column 2 line c by the percentage shown in Column 3, line c and enter the result in the Column
11

4, line c.
Line d.

Enter the sum of Column 4, lines a, b, and c.

Section 2 - Rebate to be applied in Current Tax Year
Line a.

Enter the amount of the annual credit allowance from Part VII, Section 1, line a (1), or line b (4), whichever is applicable.

Line b.

Enter the amount of credit allowance applied from Part IV, line g, Column 5.

Line c.

Subtract the amount on line b from the amount on line a. This is the amount of the annual credit allowance available for rebate.

Line d.

Maximum rebate allowable current year. (From Part V, Section 1, line d).

Line e.

Enter the lesser of line c or line d. If less than zero (0), enter zero (0).

Line f.

Maximum rebate allowable from prior years. (From Part VII, Section 1, line c (16).

Line g.

Add the amount on line e and the amount on line f. This amount may be used to offset tax liability in Part IV, Column 6.

Line h.

Enter the total amount of applied rebate from Part IV, line g, Column 7.

Line i.

Subtract line h from line g. (This number may never be less than zero). Also, enter this amount in Part VII, Section 1, Line c for
the applicable tax year. This number represents the total amount of rebate available to be carried forward to future years.

The amount of applied rebate for the current taxable year is the amount of rebate carried forward from prior years plus
the lesser of:
1. The unused portion of the annual credit allowance (Part V, Section 2, line c); or
2. The maximum rebate allowable (Part V, Section 2, line d).

PART VI - FREE-UP CREDIT CALCULATION SCHEDULE
(For Taxpayers subject to the Minimum Severance Tax on Coal)
Line 1.

Enter total tons produced for sale on or before May 31, 1993 in Column 1 and total tons produced for sale on or after June 1, 1993
in Column 2. Add Columns 1 and 2 and enter the total tons sold in Column 3.

Line 2.

Multiply line 1, Column 1, by $0.50 and line 1, Column 2 by $0.75. Add Columns 1 and 2 and enter in Column 3.

Line 3.

Enter the total from Schedule A, line 1, WV/SEV 401-C, Coal Severance Tax Return.

Line 4.

Enter the total from Schedule A, line 2a plus line 2f. Do not claim Industrial Expansion and Revitalization, Research and
Development, Coal Loading Facility and/or Capital Company Credits.

Line 5.

Subtract line 4 from line 3.

Line 6.

Multiply line 5 by 0.93.

Line 7.

Subtract the amount in Column 3, line 6, from the amount in Column 3, line 2, and enter the difference. (If less than zero, enter
zero).

Line 8.

Enter the amount on line 2, Column 2 divided by the number 3.

Line 9.

Enter in Column 3 the lesser of lines 7 or 8. Enter this amount on applicable line, Part IV, Column 12 of Tax Credit Computation
Schedule.

PART VII - RECAP OF ANNUAL CREDIT APPLICATION
Section 1
Line a.

Enter the annual credit allowance for Business Investment and Job Expansion Credit and Corporate Headquarters Relocation
and Business Investment and Jobs Expansion Credit for qualified investments for which the cost is not quantifiable. Enter on
line a the sum of Part III, Section 1, line 5 and Section 2, line 7.

Line a (1).

Enter your first year of credit utilization on line a (1). If you have a multiple year project certification, skip lines a and a (1) and
complete lines b (1) through line b (4).

Line b (1).

If you received a multiple year project certification then enter your annual credit allowance for investments placed in service
during the first taxable year. Include any annual credit allowance for which a yearly computation was required. Also enter
12

the applicable year in the space provided.
Line b (2).

Enter your annual credit allowance for investments placed into service during the second taxable year (if applicable). Include
any annual credit allowance for which a yearly computation was required.

Line b (3).

Enter your annual credit allowance for investments placed in service during the third taxable year (if applicable). Include any
annual credit allowance for which a yearly computation was required.

Line b (4).

Add the amounts on lines b (1), b (2), and b (3) and enter the result on line 4. This is the amount of credit available for the
current year. Note, this credit is only available to taxpayers who obtain a multiple year project certification from the Tax
Commissioner. All others must use the instructions for line a to compute their credit. Depending upon the type of credit period,
(i.e., single year or multiple year), the amount on line a or b, whichever is applicable, will be used in Part IV to reduce up to
eighty percent (80%) of the tax liability, for certain taxes, that is attributable to and the direct result of the qualified investment.

Line c.

After completing Part IV and Part V, enter any rebate amount remaining to be carried forward from the respective years.
Rebate credit carried forward should be taken beginning with the earliest credit year.

Line d.

Enter the amount of deferred tax credit from Tax Credit Computation Schedule, line g, Column 9 for each applicable tax period.

Section 2
Line 1.

Enter the amount from Part VII, Section 1 line a or line b (4).

Line 2.

Enter the amount from Part IV line g, Column 5.

Line 3.

Enter the amount from Part V, Section 2, line e.

Line 4.

Enter the amount from Part V, Section 2, line f.

Line 5.

Enter the amount from Part IV, line g, Column 7.

Line 6.

Enter the sum of lines 3 and 4, minus line 5.

Line 7.

Enter the amount from Tax Credit Computation Schedule, Part IV, line g, Column 9. The deferred credit(s) may offset up to
100% of tax liability directly attributed to the qualified investment and new jobs in the tenth, eleventh, and twelfth tax years
subsequent to the year such investment is placed into service or use.

Line 8.

Enter the amount of deferred credit applied. Provide detailed information for taxable year(s) and amounts that gives rise to the
deferred credit being used in the tenth, eleventh, and twelfth tax years subsequent to the year such investment is placed into
service or use.

Line 9.

Enter the amount of available free-up credit, Part VI, line 9.

Line 10.

Enter the amount of available free-up credit applied for the current taxable year from Part IV, Column 12, line g.

PART VIII
This part of the credit schedule must be completed, all questions answered and information provided.
Failure to do so will result in a delay or could result in the disallowance of the credit claimed on the tax returns.

13

BLANK
PAGE

14

Taxable year beginning ______________________, Ending _______________________
NAME

IDENTIFICATION NUMBER

STREET ADDRESS

CITY, TOWN, OR POST OFFICE

STATE

ZIP CODE

SCHEDULE - WEST VIRGINIA SMALL BUSINESS INVESTMENT AND JOBS EXPANSION TAX CREDIT

PART I

Date Placed In
Service or Use

QUALIFIED INVESTMENT PLACED IN SERVICE OR USE
IN THIS TAXABLE YEAR IN WEST VIRGINIA

(1)
Cost or
Other Basis

(2)
Applicable
Percentage

MONTH/DAY/YEAR

(3)
Qualified
Investment
Col. 1 X Col. 2

Section 1. PURCHASED PROPERTY
(a) Land

100%

(1) Natural resources in place*

100%

(2) Land
(b) Buildings and Other Improvements to Real Property

0%

(1) Useful life less than 4 years
(2) 4 years but less than 6 years

33.33%

(3) 6 years but less than 8 years

66.66%
100%

(4) 8 years or more
(c) Machinery, Equipment, and Other Depreciable or
Amortizable Tangible Personal Property**

0%

(1) Useful life less than 4 years
(2) 4 years but less than 6 years

33.33%

(3) 6 years but less than 8 years

66.66%

(4) 8 years or more

100%

(d) TOTAL
Section 2. LEASED PROPERTY
(a) Land
(1) Natural resources in place capable of 10 or more
years of sustained production.

100%
100%

(2) Land with primary lease term of 10 or more years
(b) Buildings and Other Improvements to Real Property
(1) Primary lease term and useful life of property 10
years or more
(c) Machinery, Equipment, and Other Depreciable or Amortizable
Tangible Personal Property

100%

0%

(1) Primary lease term or useful life less than 4 years
(2) Primary lease term and useful life of property 4 to 6 years

33.33%

(3) Primary lease term and useful life of property 6 to 8 years

66.66%

(4) Primary lease term and useful life of property 8 years or more

100%

(d) TOTAL

*Natural resources in place must be capable of sustained production for a period of ten (10) or more years.
**Tangible personal property is that eligible for depreciation or amortization for federal income tax purposes having a useful life (economic life) of four
(4) or more years.

1

Taxable year beginning ______________________, Ending _______________________
NAME

IDENTIFICATION NUMBER

Date Placed In
Service or Use
MONTH/DAY/YEAR

(1)
Adjusted
Cost or
Other Basis*

Section 3. TRANSFERRED PROPERTY
(a) Owned Machinery, Equipment, and Other Tangible Personal
Property
(1) Remaining useful life less than 4 years

(2)
Applicable
Percentage

(3)
Qualified
Investment
Col. 1 X Col. 2

0%

(2) Remaining useful life 4 to 6 years

33.33%

(3) Remaining useful life 6 to 8 years

66.66%
100%

(4) Remaining useful life 8 or more years
(b) Leased Machinery, Equipment, and Other Tangible Personal
Property
(1) Remaining years of primary lease term and useful life less
than 4 years
(2) Remaining years of primary lease term and useful life 4 to 6
years
(3) Remaining years of primary lease term and useful life 6 to 8
years
(4) Remaining years of primary lease term and useful life 8
years or more

0%
33.33%
66.66%
100%

(c) TOTAL

Section 4. SUMMARY OF QUALIFIED INVESTMENT
(a) Amount from Part 1, Section 1, line (d), Column 3
(b) Amount from Part 1, Section 2, line (d), Column 3
(c) Amount from Part 1, Section 3, line (c), Column 3
(d) Total (add lines (a) (b) and (c))

*Adjusted cost or other basis is original cost or other basis, less straight line depreciation for period of time the taxpayer used the transferred property outside this State.
In the case of leased property it is the rent reserved for the remainder of the primary term of the lease.

Date Placed In
Service or Use

ONLY FOR PROPERTY INITIALLY PLACED INTO SERVICE
PRIOR TO 3/10/90

(1)
Cost or
Other Basis

(2)
Applicable
Percentage

MONTH/DAY/YEAR

Section 5. LEASED PROPERTY - FOR WHICH THE COST IS
NOT QUANTIFIABLE AT THE OUTSET OR
WHICH VARIES ANNUALLY*
(a) Natural resources in place - Royalties actually paid to owner of
the natural resource during this taxable year
(b) Real property - Payments made during this taxable year

100%
100%

(c) Tangible personal property
(1) Primary lease term or useful life of property less than 4 years
(2) Primary lease term or useful life of property 4 to 6 years
(3) Primary lease term or useful life of property 6 to 8 years

0%
33.33%
66.66%
100%

(4) Primary lease term or useful life of property 8 years or more
(d) TOTAL

*Natural resources in place must be capable of sustained production for a period of ten (10) or more years.
Any other qualifying real property must have a primary lease term of ten (10) or more years.

2

(3)
Qualified
Investment
Col. 1 X Col. 2

Taxable year beginning ______________________, Ending _______________________
NAME

IDENTIFICATION NUMBER

Number of
Employees

PART II
Section 1.
New Jobs

Column 1

1.

What was the taxpayer's total employment in this State prior to this qualified
investment being placed in service or use?

2.

What was taxpayer's total employment in this State during the taxable year?

3.

What was the taxpayer's total average employment in this State during the
taxable year?

4.

How many new jobs filled by West Virginia domiciled West Virginia residents
are directly attributable to this qualified investment?

5.

How many jobs filled by both West Virginia residents and nonresidents working
in the state, including new jobs filled by new employees, are directly attributable
to this qualified investment?

Payroll of
Column 1
Employees
Column 2

Section 2.
Payroll Factor Computation

(Part II Section 1,
line 5, Column 2)
(Compensation paid to new
employees hired as a result
of the New Investment)

Divided
by

=
(Part II Section 1,
line 2, Column 2)
(Compensation paid to all
West Virginia employees
of the taxpayer)

(Rounded to six decimals)

If the use of this payroll factor computation results in a significant distortion of tax liability attributable to the investment, the Tax
Commissioner may prescribe use of an alternative method for determining such tax liability.

Section 3.
Affiliated Companies of Controlled Group

NAME OF COMPANY

FEIN NUMBER

1.
2.
3.
4.
5.

3

Taxable year beginning ______________________, Ending _______________________
NAME

IDENTIFICATION NUMBER

Section 4.
Annual Payroll Questionnaire Calculations

1.

Total payroll of all firms operating on a full year basis during preceding year.

2.

Total payroll adjusted.

3.

a.

Total payroll of all firms operating on a partial year basis during preceding year.

b.

Amount of payroll in 2(a) divided by number of weeks in operation (include
fractions of weeks)

c.

Adjusted payroll (Amount in 2(b) multiplied by 52 weeks)

Sum of full year and partial year payroll.

Section 5.
Annual Gross Receipts

1.

2.

Annual gross receipts of all firms operating on a full-year basis during the preceding
three (3) years (see Instructions).
a.

Year 1

(19

)

b.

Year 2

(19

)

c.

Year 3

(19

)

d.

Highest gross receipts from a, b, or c.

Annual gross receipts of all firms in operation for less than three (3) complete fiscal
years.
a.

Total gross receipts, less deductions, for the entire period in operation.

b.

Number of weeks (including fractions) in operation.

c.

Total gross receipts 2(a) divided by number of weeks 2(b).

d.

Derived "Annual Gross Receipts" - Total calculated in 2(c) multiplied by fifty two
(52).

Section 6.
Median Annual Compensation

*Median Annual Gross Compensation
*Arrange the annual compensation amount of each employee in an hierarchy ranking such amounts from lowest to highest, then
select the middle number.

4

Taxable year beginning ______________________, Ending _______________________
NAME

IDENTIFICATION NUMBER

SMALL BUSINESS CREDIT
With the annual income tax return, for each year of the ten year credit period, the taxpayer shall certify:
(1) The new jobs percentage for this taxable year.
(2) The amount of the credit allowance for this taxable year.
(3) If a partnership or small business corporation (S-Corporation), the amount of credit allowed to the partners or shareholders for
this tax year.
(4) That the qualified investment property continues to be used, or, if disposed of, the date of disposition and that the disposition was
not prior to the expiration of its useful life.
(5) That the new jobs created by the qualified investment continue to exist and are filled by persons who meet the definition of new
employee and whose annual compensation equals or exceeds the minimum average compensation required for this credit.
These credits are allowable for a period of ten (10) years. Unused rebate credit may be carried forward for three (3) additional tax years
beyond the ten (10) year period.
The ten (10) year period begins with the taxable year in which the qualified investment property is placed in service or use, or at the taxpayer’s
election, the next succeeding taxable year. For the small business investment and jobs expansion credit, this election must be made on the
income tax return filed for the taxable year in which the property was placed in service or use.
Has taxpayer elected to begin the ten (10) year period with the next succeeding taxable year?

Yes

No

PART III
Section 1. COMPUTATION OF SMALL BUSINESS INVESTMENT AND JOBS EXPANSION TAX CREDIT (Quantifiable)

1.

Total qualified investment (From Part I, Section 4, line d).

2.

New jobs percentage (See Information below).

3.

Total allowable credit (line 1 x line 2).

4.

Taxable year percentage.

5.

Annual credit allowance (line 3 x line 4).

.10

Section 2.
CALCULATION OF SMALL BUSINESS INVESTMENT AND JOBS EXPANSION TAX CREDIT (Non-quantifiable)

1.

Total qualified investment (From Part I, Section 5, line (d), column (3)).

2.

New jobs percentage (See Information below).

3.

Total allowable credit (line 1 x line 2).