Instructions And Forms For Filing The Business And Occupation Tax Return (Page 3 of 5) in pdf

(100%) of tax liability directly attributable to the qualified invest-

2c. WEST VIRGINIA CAPITAL COMPANY CREDIT

ment and new jobs in project years eleven through thirteen only.

The purpose of the West Virginia Capital Company Credit is

Alternative Apportionment Methods

to stimulate the formation of venture and risk capital companies.

The Board of Directors of the West Virginia Economic Develop-

The 1993 session of the West Virginia State Legislature

ment Authority can certify that a West Virginia capital company

passed an amendment strengthening the Department of Tax

is qualified to receive investments for which the investor may

and Revenue's authority to use alternative apportionment meth-

claim credit against the Business and Occupation Tax, Business

ods in cases where the payroll factor does not fairly represent the

Franchise Tax, Severance Tax, Telecommunications Tax, Per-

tax liability directly attributable to the qualified investment activ-

sonal Income Tax and Corporation Net Income Tax. A “certified

ity. In no case should credits attributable to one qualified project

West Virginia capital company” is a West Virginia development

apply to tax liability unrelated to that project. The purpose behind

corporation created pursuant to W. Va. § Code 31-14 or a profit

a mathematical formula (e.g. payroll factor) is to arrive at tax

or nonprofit entity organized and existing under the laws of this

liability attributable to qualified investment or new jobs in situa-

State created for the purpose of making venture or risk capital

tions where that amount is not clearly identifiable. While no

available to qualified investments that have been certified by the

mathematical formula is perfect in the ascertainment of tax

Board of Directors of the West Virginia Industrial and Trade Jobs

liability directly attributable to new investment and new jobs, the

Development Corporation.. A “qualified investment” is a debt of

formula in use should result in a close approximation (e.g. within

equity financing of a West Virginia business that is engaged in

5 percent). If your mathematical formula fails to accomplish this

one or more of the following activities:

result, then an alternative apportionment method may be pre-

scribed by the Tax Commissioner.

a. manufacturing;

As of April 10, 1993, new credit applications are available

b. agricultural production or processing;

only to the following businesses: manufacturing (timbering,

c. forestry production or processing

timber severance or hauling, and mineral or coal severance,

d. mineral production or processing except for

hauling, processing, and preparation do not constitute manufac-

conventionaland gas exploration;

turing for this purpose), information processing, warehousing,

e. transportation;

goods distribution, destination-oriented recreation and tourism.

Attach appropriate schedules.

research and development of products or processes

associated with any of the activities enumerated above;

2b. CREDITS FOR ELECTRIC AND GAS UTILITIES (11-13F)

g. tourism, or

A credit for the cost of providing electric or natural gas utility

h. wholesale or retail distribution activities within this State.

service, or both, at reduced rates to qualified low-income resi-

The total amount of tax credits authorized for a single

dential customers may be claimed by certain eligible taxpayers

qualified capital company may not exceed $2 million, and the

against their business and occupation tax. Eligible taxpayers are

total credits authorized by the Board for all capital companies

utilities which have provided electric or natural gas service, or

may not exceed a total of $5 million each fiscal year. These

both, to qualified low-income residential customers at special

credits are then allocated among the qualified capital companies

reduced rates. The cost of providing electric or natural gas

in the order that the companies were certified by the Board as

service, or both, at special reduced rates will be certified by the

qualified capital companies.

Public Service Commission. The credit is limited to the utilities

Any investor, whether it be an individual, partnership, or

cost of providing the service at special reduced rates as certified

corporation, who makes a capital investment in a qualified West

by the Public Service Commission, less any reimbursement of

Virginia capital company, is entitled to a tax credit equal to 50

the cost which the taxpayer has received through any other

percent of the investment. This credit may be taken against the

means. A copy of the certification must be attached to the return

investor’s liability for Business and Occupation Tax, Business

otherwise the credit will be disallowed. In estimating the amount

Franchise Tax, Severance Tax, Telecommunications Tax, Per-

of monthly or quarterly tax due for the month of July and

sonal Income Tax or Corporation Net Income Tax. If the

succeeding months in any calendar year, the eligible taxpayer

investment is made by a partnership or corporation electing to be

may divide the amount certified by the number of returns

treated as a small business corporation for federal income tax

(estimated and annual) that will become due for the period July

purposes, this credit may be divided pursuant to the election of

through December of each year. The resultant quotient shall be

the partners or shareholders therein. The tax credit allowable is

the maximum amount allowed to be taken as credit on each

to be credited against the Taxpayer’s tax liability for the taxable

return. In no event may application of this credit reduce the tax

year in which the investment was made in a qualified capital

liability below zero (0). Any unused portion of the credit may be

company. If the amount of tax credit exceeds the taxpayer’s

claimed against the corporation net income tax liability for the

liability for the taxable year, the amount of the credit which

taxable year. In the event there is still credit available to the

exceeds the tax liability may be carried back or carried forward.

taxpayer, it may be carried over to the subsequent year for

This tax credit is available only to taxpayers who invest in a

business and occupation tax purposes and should be applied as

qualified West Virginia capital company on or after July 1, 1986.

a credit before any other credits for the that year are applied.

Instructions And Forms For Filing The Business And Occupation Tax Return Page 3

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