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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.

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For tax years ending after May 31, 1993, all taxpayers claiming the Business Investment 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.

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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 Tax, Corporation Net Income Tax and Personal Income Tax.

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Special recapture tax provisions may apply to taxpayers who place qualified investment into service on or after

March 12, 1994.

CERTIFIED PROJECTS

The Business Investment and Jobs Expansion Credit also may be claimed for a project certified by the Tax

Commissioner. A project eligible for certification is one in which:

1. the qualified investment creates at least 50 new jobs but such investment is placed in service or use over a

period of three successive tax years rather than a period of 365 days or less. The investment is eligible for

project certification only if made in accordance with a written business facility development plan, and the

investment placed in service or use during the first year would not have been made without the expectation of

making the qualified investment placed in service or use during the next two succeeding tax years;

2. the qualified investment is made by one or more persons, but some or all of the new jobs created at each new

or expanded business facility are created by one or more other persons. For this type of project, at least 50

new jobs must be created and certified by the Tax Commissioner as new jobs created as a direct result of the

qualified investment, and that the investment is made according to a written business facility development plan;

the qualified investment in an integrated project made pursuant to a written business facility development plan

is made by one or more persons but some or all of the new jobs are created by one or more other persons and

at least 50 of the new jobs are created within a 50 mile radius of each new or expanded business facility. The

new jobs must be certified by the Tax Commissioner as new jobs created as a direct result in the investment.

The allowable credit is determined by multiplying the qualified investment by the applicable new jobs percentage

and may be claimed by one or more participants in the project. The manner of credit allocation must be specified

in the application for certification and is considered binding.

Before any credit may be claimed or approved, a request for certification of a project must be filed with and certified

by the Tax Commissioner. Taxpayers may not apply credit against a tax liability until certified.

Failure to timely file a request for certification will result in the imposition of interest on the recapture of any

erroneous credits claimed.

CORPORATE HEADQUARTERS RELOCATION CREDIT

The Corporate Headquarters Relocation Credit is allowable for corporate headquarters placed in service or use

in West Virginia on or after February 1, 1986. An out-of-state corporation relocating its headquarters to West Virginia

is allowed a tax credit if it employs at least 15 domiciled West Virginia residents on a full-time basis at its new location.

The adjusted qualified investment is the same as the qualified investment determined for the Business

Investment and Jobs Expansion Credit, plus the cost of reasonable and necessary expenses incurred to relocate

the corporate headquarters.

The amount of the credit is determined by multiplying the adjusted qualified investment by ten percent. However,

if at least 50 jobs are attributable to the relocation or a combination of other qualified investment and the relocation,

the regular Business Investment and Jobs Expansion Tax Credit percentages beginning at fifty percent 50% may

be used.

Form Wv/bcs-1 - Business Investment And Jobs Expansion Credit And Corporate Headquarters Relocation Credit (Super Credits) - Page 2

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