Instructions And Forms For Filing The Business And Occupation Tax Return (Page 2 of 5) in pdf

WEST VIRGINIA BUSINESS AND OCCUPATION TAX

INSTRUCTIONS FOR COMPLETING ANNUAL RETURN

PLEASE NOTE: THESE INSTRUCTIONS ARE TO ASSIST

super credit sought for the time period in question. Note that one

YOU IN THE PREPARATION OF THE TAX RETURN AND

application form (BCS-A) must be filed for each year of qualified

ARE NOT A SUBSTITUTE FOR THE TAX LAW AND

investment beginning with investment periods occurring after

REGULATIONS.

December 31, 1989.

Super Credits can be used to offset a portion of the amount

of taxes attributable to the new investment for the following

INFORMATION SECTION

West Virginia taxes in the order stated: Business and Occupa-

-Check appropriate box indicating form of business entity.

tion Taxes, Severance Taxes, Telecommunications Taxes,

-Review account number, name and address. Make any

Business Franchise Taxes, Corporation Net Income Taxes, and

corrections on face of return, drawing a line through incorrect

Personal Income Taxes.

information.

The credit applies in a two-step process to offset tax

liabilities directly attributable to the qualified investment and new

jobs. In the first step, credit may offset up to eighty percent

INSTRUCTIONS FOR COMPLETING PAGES ONE AND TWO

(80%) of qualified tax liability. If credit remains after this first step

OF THE FORM

application, then the leftover credit may potentially offset the

Before a taxpayer can compute his tax due, he must

remaining twenty percent (20%) of qualified tax liability not offset

determine under which classification his business activity falls.

in the first step. However, an additional calculation places a

Each classification imposes a different tax rate, so an error in

potential limit upon the credit available for step two. The

classification of income can be significant.

taxpayer must calculate the value (i.e. "rebate") of eighty

Taxpayers who have more than one business activity must

percent (80%) of property tax, eighty percent (80%) of unem-

report the amount of income from each activity under the

ployment taxes and twenty percent (20%) of workers compen-

appropriate classification. After computing the amounts of tax

sation fees paid during the year on the applicable qualified

due under each classification, the amount of tax due is totaled

investment property or applicable new employees. The tax-

and entered on line 1, page 1, Total Gross Tax. Any income

payer must then use the lesser amount of either the value of

claimed as an exemption must be fully described on page 2, by

credit left over from the first step application or the value of

giving a break-down as to the type of exemption claimed. If this

"rebate" to offset the qualified step two tax liabilities. Any

information is not shown, the exemptions will be disallowed.

available step two credit not fully utilized in the step two

application, may be carried forward for a period of up to twelve

years from the year of initial investment.

INSTRUCTIONS FOR COMPLETING LINES ONE THROUGH

If a taxpayer's liabilities are not solely attributable to the

TWELVE TO ARRIVE AT TAX DUE ON FRONT OF RETURN

qualified investment and new jobs, the taxpayer must use an

1. Enter the subtotal of Gross Tax due.

apportionment method or separate accounting to determine the

amount of tax liability subject to credit offset. The amount of tax

attributable to the new investment and against which credit may

2a. CREDITS FOR BUSINESS INVESTMENT AND JOBS

be applied is generally determined by multiplying the total tax

EXPANSION (11-13c) HEADQUARTERS RELOCATION (11-

liability by a fraction, the numerator of which is the compensation

13C-4a) OR SMALL BUSINESS (11-13C-7a) (SUPER CRED-

paid to new employees hired as a result of the new investment

ITS)

and the denominator of which is the compensation paid to all

These super credits are available to any taxpayer making

West Virginia employees of the taxpayer.

qualified investments in a new or expanded business in West

Deferred Credit

Virginia resulting in the creation of at least fifty (50), fifteen (15)

or ten (10) new jobs, respectively.

For tax years ending after May 31, 1993, taxpayers claiming

the Business Investment and Jobs Expansion Tax Credit (Super

Any taxpayer placing qualified investment into service or

Credit) must now defer twenty percent (20%) of the value of the

use on or after January 1, 1990 must file an application for super

annual credit application until tax years eleven through thirteen.

credit (Form BCS-A) attributable to such investment and receive

The amount of credit deferment is determined after calculations

an affirmative written response from the Tax Division prior to

have been made for the Super Credits claimed in step one and

claiming any such credit on tax returns (monthly, quarterly or

step two. Twenty percent (20%) of the total amount of credit

annual). In no case should the application be received any later

claimed is to be carried forward annually until the eleventh year

than the due date of the taxpayer’s annual State Income Tax

of the credit. Then, the deferred amount is drawn upon as a

Return (corporate or personal) for the tax year the investment

credit to be taken against the taxpayers liability for business

was placed into service without regard to any extensions of time

taxes in the same order as mandated for the taking of the Super

to file. Any taxpayer failing to timely file the credit application

Credits. The deferred credits may offset up to 100 percent

form will automatically lose up to 50 percent of the value of any

Instructions And Forms For Filing The Business And Occupation Tax Return Page 2

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