Schedule R & D - West Virginia Credit For Research And Development Projects printable pdf download

SCHEDULE R & D

(Rev. 03/05)

CREDIT FOR RESEARCH AND DEVELOPMENT PROJECTS

For Qualified Expenses Incurred on or Before December 31, 2002

The Credit for Research and Development Projects was enacted to provide incentives to industrial taxpayers to conduct research and

development projects in West Virginia.

NOTE:

The Credit for Research and Development Projects may no longer be applied to reduce Sales and Use Taxes for taxable

purchases of tangible personal property or services made for taxable years ending after June 30, 1993.

ELIGIBLE TAXPAYERS

Eligibility for the Research and Development Projects Credit is limited to the following taxpayers:

manufacturing products within West Virginia; (food processors are not classified as manufacturers)

producing natural resource products within West Virginia; and

generating electric power within West Virginia.

ELIGIBLE RESEARCH AND DEVELOPMENT PROJECT

Eligible research and development project means a research and development project engaged in or conducted within this State, by a

person who is engaged in this State in the business of producing natural resources or in an industrial business when such research

and development project is conducted for purposes relating to the technical, economic, financial, engineering or marketing aspects of

expanding markets for, and increasing sales of, this State’s natural resource products, or industrial products (or both).

AMOUNT OF CREDIT

The tax credit shall be limited to 10% (1% for each of ten consecutive years) of the total qualified investment in a research and development

project. The amount of credit employed in a given year shall not reduce the taxpayer’s liability for Business and Occupation Tax (§ 11-

13), Severance Tax (§ 11-13A), Business Franchise Tax (§ 11-23), and Corporation Net Income Tax (§ 11-24) by more than 50%. Any

unused credit for a particular year is forfeited.

Whenever the taxpayer chooses to apply the credit against Corporation Net Income Tax liability, the taxpayer must first add back 10% of

the research and development expenses associated with the West Virginia Research and Development Project Credit (as deducted for

federal tax purposes) to federal taxable income. This credit application against Corporation Net Income Tax is available only for tax years

beginning on or after January 1, 1989.

QUALIFIED PROPERTY FOR RESEARCH AND DEVELOPMENT PROJECT

Property purchased for an eligible research and development project is defined as all real property and improvements thereto, and tangible

personal property, constructed or purchased for use as a component part of an eligible research and development project located within

West Virginia on or after July 1, 1985.

Tangible personal property is included within the above definition only if depreciation or amortization in lieu of depreciation, is allowable

in determining Personal Income Tax or Corporation Net Income Tax of the purchaser. The property to be included must have a useful

life of four years or more. Useful life is defined as the period over which the asset may reasonably be expected to be useful in the taxpayer’s

business.

The leasing of property for a term of ten years or longer, if used as a component part of an eligible research and development project shall

be considered property purchased for an eligible research and development project.

INELIGIBLE PROPERTY

Property purchased for research and development shall not include the following:

(1) Repair costs, including materials used in making the repair;

Schedule R & D - West Virginia Credit For Research And Development Projects