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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.

6. The cost of tangible personal property with a written primary lease term of at least four years but less than six

years is one third (1/3) of the rent reserved for the primary term of the lease.

7. For tangible personal property with a written primary lease term of at least six years but less than eight years,

the cost is two thirds (2/3) of the rent reserved for the primary term of the lease.

8. For tangible personal property with a written lease term of eight or more years, the cost is 100% of the rent

reserved for the primary term of the lease, not to exceed 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.

9. 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 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.

12. 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 20 years of the

remaining useful life, whichever is less.

13. 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.

14. The cost of relocating corporate headquarters is the expenses incurred and paid by the corporation to unrelated

third parties and which have been certified by the Tax Commissioner to have been both reasonable and

necessary to effectuate the move.

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.

A “New Employee” is a West Virginia domiciled resident hired to fill one of the new jobs on a permanent basis.

Temporary or seasonal employment does not qualify as a new job. Persons hired on a temporary or seasonal basis

do not qualify as new employees.

For regular non-project or regular project Business Investment and Jobs Expansion Credit, an estimation of the

expected number of new jobs is made in the first taxable year for which the credit is claimed. In the third tax year

the actual number of new jobs created must be certified by the business. Adjustments must be made for the new

jobs percentage if the number of new jobs certified varies from the number of new jobs estimated. The allowable

credit is then redetermined for prior and future years. Once certified, if the number of new jobs declines in any tax

year, resulting in a decreased new jobs percentage, the credit is redetermined. However, if the number of new jobs

subsequently increases to the former threshold, the credit will be reinstated. (This mechanism in this paragraph is

Form Wv/bcs-1 - Business Investment And Jobs Expansion Credit And Corporate Headquarters Relocation Credit (Super Credits) - Page 5

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