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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.

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.

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.

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.

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.

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.

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

Wv/bcs-Small - West Virginia Small Business Investment And Jobs Expansion Tax Credit Page 4

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