Chapter 5B. Economic Development Act Of 1985


Published: 2015

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WEST VIRGINIA CODE











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WVC 5B-

CHAPTER 5B. ECONOMIC DEVELOPMENT ACT OF 1985.

WVC 5 B- 2 E-

ARTICLE 2E. WEST VIRGINIA TOURISM DEVELOPMENT ACT.







WVC 5 B- 2 E- 1

§5B-2E-1. West Virginia Tourism Development Act.

This article shall be referred to as the "West Virginia

Tourism Development Act."







WVC 5 B- 2 E- 2

§5B-2E-2. Legislative findings.

The Legislature finds and declares that the general welfare

and material well-being of the citizens of the state depend, in

large measure, upon the development of tourism development projects

in the state and that it is in the best interest of the state to

induce the creation of new, or the expansion of existing, tourism

development projects within the state in order to advance the

public purposes of relieving unemployment by preserving and

creating jobs and by preserving and creating new and greater

sources of revenues for the support of public services provided by

the state; and that the inducement for the creation or expansion of

tourism development projects should be in the form of a tax credit

to be applied to consumers sales and service taxes collected on the

gross receipts generated directly from the operations of the new or

expanded tourism development projects, in lieu of tax credits on

income that are largely deferred for a number of years after start

up of a major tourism development project; and all of which new or

expanded tourism developments are of paramount importance to the

state and its economy and for the state's contribution to the

national economy.







WVC 5 B- 2 E- 3

§5B-2E-3. Definitions.

     As used in this article, unless the context clearly indicates

otherwise:

     (1) "Agreement" means a tourism development agreement entered

into, pursuant to section six of this article, between the

development office and an approved company with respect to a

project.

     (2) "Approved company" means any eligible company approved by

the development office pursuant to section five of this article

seeking to undertake a project.

     (3) "Approved costs" means:

     (a) Included costs:

     (i) Obligations incurred for labor and to vendors,

contractors, subcontractors, builders, suppliers, delivery persons

and material persons in connection with the acquisition,

construction, equipping or installation of a project;

     (ii) The costs of acquiring real property or rights in real

property and any costs incidental thereto;

     (iii) The cost of contract bonds and of insurance of all kinds

that may be required or necessary during the course of the

acquisition, construction, equipping, or installation of a project

which is not paid by the vendor, supplier, delivery person,

contractor or otherwise provided;

     (iv) All costs of architectural and engineering services, including, but not limited to: Estimates, plans and specifications,

preliminary investigations and supervision of construction,

installation, as well as for the performance of all the duties

required by or consequent to the acquisition, construction,

equipping or installation of a project;

     (v) All costs required to be paid under the terms of any

contract for the acquisition, construction, equipping or

installation of a project;

     (vi) All costs required for the installation of utilities,

including, but not limited to: Water, sewer, sewer treatment, gas,

electricity, communications and off-site construction of utility

extensions to the boundaries of the real estate on which the

facilities are located, all of which are to be used to improve the

economic situation of the approved company in a manner that allows

the approved company to attract persons; and

     (vii) All other costs comparable with those described in this

subdivision;

     (b) Excluded costs. -- The term "approved costs" does not

include any portion of the cost required to be paid for the

acquisition, construction, equipping or installation of a project

that is financed with governmental incentives, grants or bonds or

for which the eligible taxpayer elects to qualify for other tax

credits, including, but not limited to, those provided by article

thirteen-q, chapter eleven of this code. The exclusion of certain costs of a project under this paragraph (b) does not automatically

disqualify the remainder of the costs of the project.

     (4) "Base tax revenue amount" means the average monthly amount

of consumer sales and service tax collected by an approved company,

based on the twelve-month period ending immediately prior to the

opening of a new tourism development project for business or a

tourism development expansion project, as certified by the State

Tax Commissioner.

     (5) "Development office" means the West Virginia Development

Office as provided in article two of this chapter.

     (6) "Crafts and products center" means a facility primarily

devoted to the display, promotion and sale of West Virginia

products and at which a minimum of eighty percent of the sales

occurring at the facility are of West Virginia arts, crafts or

agricultural products.

     (7) "Eligible company" means any corporation, limited

liability company, partnership, limited liability partnership, sole

proprietorship, business trust, joint venture or any other entity

operating or intending to operate a project, whether owned or

leased, within the state that meets the standards required by the

development office. An eligible company may operate or intend to

operate directly or indirectly through a lessee.

     (8) "Ineligible company" means any West Virginia pari-mutuel

racing facility licensed to operate multiple video lottery machines as authorized by article twenty-two-a, chapter twenty-nine of this

code or any limited lottery retailer holding a valid license issued

under article seven, chapter sixty of this code.

     (9) "Entertainment destination center" means a facility

containing a minimum of two hundred thousand square feet of

building space adjacent or complementary to an existing tourism

attraction, an approved project, or a major convention facility and

which provides a variety of entertainment and leisure options that

contain at least one major theme restaurant and at least three

additional entertainment venues, including, but not limited to,

live entertainment, multiplex theaters, large-format theaters,

motion simulators, family entertainment centers, concert halls,

virtual reality or other interactive games, museums, exhibitions or

other cultural and leisure time activities. Entertainment and food

and drink options shall occupy a minimum of sixty percent of total

gross area, as defined in the application, available for lease and

other retail stores shall occupy no more than forty percent of the

total gross area available for lease.

     (10) "Final approval" means the action taken by the executive

director of the development office qualifying the eligible company

to receive the tax credits provided in this article.

     (11) "Project" means a tourism development project and/or a

tourism development expansion project administered in accordance

with the provisions of this article.

     (12) "Qualified professional services destination facility"

means a facility with a minimum qualified investment, as defined in

this article, of not less than $80 million physically located in

this state and adjacent or complementary to a historic resort

hotel, which primarily furnishes and provides personal or

professional services, or both types of services, to individuals

who primarily are residents of another state or foreign county.

     (13) "State agency" means any state administrative body,

agency, department, division, board, commission or institution

exercising any function of the state that is not a municipal

corporation or political subdivision.

     (14) "Tourism attraction" means a cultural or historical site,

a recreation or entertainment facility, an area of natural

phenomenon or scenic beauty, a West Virginia crafts and products

center, or an entertainment destination center or a qualified

professional services destination facility. A project or tourism

attraction does not include any of the following:

     (A) Lodging facility, unless:

     (i) The facility constitutes a portion of a project and

represents less than fifty percent of the total approved cost of

the project, or the facility is to be located on recreational

property owned or leased by the state or federal government and the

facility has received prior approval from the appropriate state or

federal agency;

     (ii) The facility involves the restoration or rehabilitation

of a structure that is listed individually in the national register

of historic places or is located in a national register historic

district and certified by the state historic preservation officer

as contributing to the historic significance of the district and

the rehabilitation or restoration project has been approved in

advance by the state historic preservation officer; or

     (iii) The facility involves the construction, reconstruction,

restoration, rehabilitation or upgrade of a full-service lodging

facility or the reconstruction, restoration, rehabilitation or

upgrade of an existing structure into a full-service lodging

facility having not less than five hundred guest rooms, with

construction, reconstruction, restoration, rehabilitation or

upgrade costs exceeding ten million dollars;

     (B) A facility that is primarily devoted to the retail sale of

goods, other than an entertainment destination center, a West

Virginia crafts and products center or a project where the sale of

goods is a secondary and subordinate component of the project; and

     (C) A recreational facility that does not serve as a likely

destination where individuals who are not residents of the state

would remain overnight in commercial lodging at or near the project

or existing attraction.

     (15) "Tourism development project" means the acquisition,

including the acquisition of real estate by a leasehold interest with a minimum term of ten years, construction and equipping of a

tourism attraction; the construction and installation of

improvements to facilities necessary or desirable for the

acquisition, construction, installation of a tourism attraction,

including, but not limited to, surveys, installation of utilities,

which may include water, sewer, sewage treatment, gas, electricity,

communications and similar facilities; and off-site construction of

utility extensions to the boundaries of the real estate on which

the facilities are located, all of which are to be used to improve

the economic situation of the approved company in a manner that

allows the approved company to attract persons, but does not

include a project that will be substantially owned, managed or

controlled by an eligible company with an existing project located

within a ten mile radius, or by a person or persons related by a

family relationship, including spouses, parents, children or

siblings, to an owner of an eligible company with an existing

project located within a ten mile radius.

     (16) "Tourism development expansion project" means the

acquisition, including the acquisition of real estate by a

leasehold interest with a minimum term of ten years; the

construction and installation of improvements to facilities

necessary or desirable for the expansion of an existing tourism

attraction including, but not limited to, surveys, installation of

utilities, which may include water, sewer, sewage treatment, gas, electricity, communications and similar facilities; and off-site

construction of utility extension to the boundaries of real estate

on which the facilities are located, all of which are to be used to

improve the economic situation of the approved company in a manner

that allows the approved company to attract persons.

     (17) "Tourism development project tax credit" means the

tourism development project tax credit allowed by section seven of

this article.

     (18) "Tourism development expansion project tax credit" means

the tourism development expansion project tax credit allowed by

section seven-a of this article.







WVC 5 B- 2 E- 4

§5B-2E-4. Additional powers and duties of the development office.

     The development office has the following powers and duties, in

addition to those set forth in this case, necessary to carry out

the purposes of this article including, but not limited to:

     (1) Make approval of all applications for projects and enter

into agreements pertaining to projects with approved companies;

     (2) Employ fiscal consultants, attorneys, appraisers and other

agents as the executive director of the development office finds

necessary or convenient for the preparation and administration of

agreements and documents necessary or incidental to any project;

and

     (3) Impose and collect fees and charges in connection with any

transaction.

     (4) Impose and collect from the applicant a non-refundable

application fee in the amount of $10,000 to be paid to the

Development Office when the application is filed.







WVC 5 B- 2 E- 5

§5B-2E-5. Project application; evaluation standards; approval of

projects.

  (a) Each eligible company that seeks to qualify a project for

the tourism development project tax credit provided by section

seven of this article, or for the tourism development expansion

project tax credit provided by section seven-a of this article, as

applicable, must file a written application for approval of the

project with the Development Office.

  (b) With respect to each eligible company making an

application to the Development Office for a tourism development

project tax credit or a tourism development expansion project tax

credit, the Development Office shall make inquiries and request

documentation, including a completed application, from the

applicant that shall include: A description and location of the

project; capital and other anticipated expenditures for the project

and the sources of funding therefor; the anticipated employment and

wages to be paid at the project; business plans that indicate the

average number of days in a year in which the project will be in

operation and open to the public; and the anticipated revenues and

expenses generated by the project.

  (c) On and after the effective date of this section as amended

in 2014, the executive director of the Development Office, within

sixty days following receipt of an application or receipt of any

additional information requested by the Development Office respecting the application, whichever is later, shall act to grant

or not to grant approval of the application, based on the following

criteria:

  (1) The project will attract at least twenty-five percent of

its visitors from outside of this state;

  (2) The project will have approved costs in excess of

$1,000,000;

  (3) The project will have a significant and positive economic

impact on the state considering, among other factors, the extent to

which the project will compete directly with or complement existing

tourism attractions in the state and the amount by which increased

tax revenues from the project will exceed the credit given to the

approved company;

  (4) The project will produce sufficient revenues and public

demand to be operating and open to the public for a minimum of one

hundred days per year;

  (5) The project will provide additional employment

opportunities in the state;

  (6) The quality of the proposed project and how it addresses

economic problems in the area in which the project will be located;

  (7) Whether there is substantial and credible evidence that

the project is likely to be started and completed in a timely

fashion;

  (8) Whether the project will, directly or indirectly, improve the opportunities in the area where the project will be located for

the successful establishment or expansion of other industrial or

commercial businesses;

  (9) Whether the project will, directly or indirectly, assist

in the creation of additional employment opportunities in the area

where the project will be located;

  (10) Whether the project helps to diversify the local economy;

  (11) Whether the project is consistent with the goals of this

article;

  (12) Whether the project is economically and fiscally sound

using recognized business standards of finance and accounting; and

  (13) The ability of the eligible company to carry out the

project.

  (d) The Development Office may establish other criteria for

consideration when approving the applications.

  (e) The decision by the executive director of the Development

Office is final.

  (f)This section as amended and reenacted in 2014 shall apply

to applications under review by the director of the development

office prior to the effective date of this section as well as to

applications filed on and after the effective date of this section

as amended and reenacted in 2014.







WVC 5 B- 2 E- 6

§5B-2E-6. Agreement between development office and approved

company.

The development office, upon final approval of an application

by the executive director, may enter into an agreement with any

approved company with respect to its project. The terms and

provisions of each agreement shall include, but not be limited to:

(1) The amount of approved costs of the project that qualify

for a sales tax credit, as provided in section seven or section

seven-a of this article, as applicable. Within three months of the

completion date, the approved company shall document the actual

cost of the project through a certification of the costs to the

development office by an independent certified public accountant

acceptable to the development office; and

(2) A date certain by which the approved company shall have

completed and opened the project to the public. Any approved

company that has received final approval may request and the

development office may grant an extension or change, however, in no

event shall the extension exceed three years from the date of final

approval to the completion date specified in the agreement with the

approved company.







WVC 5 B- 2 E- 7

§5B-2E-7. Amount of credit allowed for tourism development

project; approved projects.

     (a) Approved companies are allowed a credit against the West

Virginia consumers sales and service tax imposed by article

fifteen, chapter eleven of this code and collected by the approved

company on sales generated by or arising from the operations of the

tourism development project: Provided, That if the consumers sales

and service tax collected by the approved company is not solely

attributable to sales resulting from the operation of the new

tourism development project, the credit shall only be applied

against that portion of the consumers sales and service tax

collected in excess of the base tax revenue amount. The amount of

this credit is determined and applied as provided in this article.

     (b) The maximum amount of credit allowable in this article is

equal to twenty-five percent of the approved company's approved

costs as provided in the agreement: Provided, That, if the tourism

development project site is located within the permit area or an

adjacent area of a surface mining operation, as these terms are

defined in section three, article three, chapter twenty-two of this

code, from which all coal has been or will be extracted prior to

the commencement of the tourism development project, or the tourism

development project site is located on or adjacent to recreational

property owned or leased by the state or federal government and

when the project is located on property owned or leased by the state or federal government, the project has received prior

approval from the appropriate state or federal agency, the maximum

amount of credit allowable is equal to thirty-five percent of the

approved company's approved costs as provided in the agreement.

     (c) The amount of credit allowable must be taken over a ten-

year period, at the rate of one tenth of the amount thereof per

taxable year, beginning with the taxable year in which the project

is opened to the public, unless the approved company elects to

delay the beginning of the ten-year period until the next

succeeding taxable year. This election shall be made in the first

consumers sales and service tax return filed by the approved

company following the date the project is opened to the public.

Once made, the election cannot be revoked.

     (d) The amount determined under subsection (b) of this section

is allowed as a credit against the consumers sales and service tax

collected by the approved company on sales from the operation of

the tourism development project. The amount determined under said

subsection may be used as a credit against taxes required to be

remitted on the approved company's monthly consumers sales and

service tax returns that are filed pursuant to section sixteen,

article fifteen, chapter eleven of this code. The approved company

shall claim the credit by reducing the amount of consumers sales

and service tax required to be remitted with its monthly consumers

sales and service tax returns by the amount of its aggregate annual credit allowance until such time as the full current year annual

credit allowance has been claimed. Once the total credit claimed

for the tax year equals the approved company's aggregate annual

credit allowance no further reductions to its monthly consumers

sales and service tax returns will be permitted.

     (e) If any credit remains after application of subsection (d)

of this section, the amount of credit is carried forward to each

ensuing tax year until used or until the expiration of the third

taxable year subsequent to the end of the initial ten-year credit

application period. If any unused credit remains after the

thirteenth year, that amount is forfeited. No carryback to a prior

taxable year is allowed for the amount of any unused portion of any

annual credit allowance.







WVC 5 B- 2 E- 7 A

§5B-2E-7a. Amount of credit allowed for tourism development

expansion project; approved projects.

     (a) Approved companies are allowed a credit against the West

Virginia consumers sales and service tax imposed by article

fifteen, chapter eleven of this code and collected by the approved

company on sales generated by or arising from the operations of the

tourism development expansion project: Provided, That the tourism

development expansion project tax credit allowed under this section

is separate and distinct from any credit allowed for a tourism

development project in accordance with the provisions of section

seven of this article: Provided, however, That if the consumers

sales and service tax collected by the approved company is not

solely attributable to sales resulting from the operation of the

tourism development expansion project, the credit shall only be

applied against that portion of the consumers sales and service tax

collected in excess of the base tax revenue amount. The amount of

this credit is determined and applied as provided in this article.

     (b) The maximum amount of credit allowable in this article is

equal to twenty-five percent of the approved company's approved

costs as provided in the agreement: Provided, That, if the tourism

development expansion project site is located within the permit

area or an adjacent area of a surface mining operation, as these

terms are defined in section three, article three, chapter twenty-

two of this code, from which all coal has been or will be extracted prior to the commencement of the tourism development project, or

the tourism development project site is located on or adjacent to

recreational property owned or leased by the state or federal

government and when the project is located on property owned or

leased by the state or federal government, the project has received

prior approval from the appropriate state or federal agency, the

maximum amount of credit allowable is equal to thirty-five percent

of the approved company's approved costs as provided in the

agreement.

     (c) The amount of credit allowable must be taken over a ten-

year period, at the rate of one tenth of the amount thereof per

taxable year, beginning with the taxable year in which the project

is opened to the public, unless the approved company elects to

delay the beginning of the ten-year period until the next

succeeding taxable year. This election shall be made in the first

consumers sales and service tax return filed by the approved

company following the date the project is opened to the public.

Once made, the election cannot be revoked.

     (d) The amount determined under subsection (b) of this section

is allowed as a credit against the consumers sales and service tax

collected by the approved company on sales from the operation of

the tourism development expansion project. The amount determined

under said subsection may be used as a credit against taxes

required to be remitted on the approved company's monthly consumers sales and service tax returns that are filed pursuant to section

sixteen, article fifteen, chapter eleven of this code. The

approved company shall claim the credit by reducing the amount of

consumers sales and service tax required to be remitted with its

monthly consumers sales and service tax returns by the amount of

its aggregate annual credit allowance until such time as the full

current year annual credit allowance has been claimed. Once the

total credit claimed for the tax year equals the approved company's

aggregate annual credit allowance no further reductions to its

monthly consumers sales and service tax returns will be permitted.

     (e) If any credit remains after application of subsection (d)

of this section, the amount of credit is carried forward to each

ensuing tax year until used or until the expiration of the third

taxable year subsequent to the end of the initial ten-year credit

application period. If any unused credit remains after the

thirteenth year, that amount is forfeited. No carryback to a prior

taxable year is allowed for the amount of any unused portion of any

annual credit allowance.







WVC 5 B- 2 E- 7 B

§5B-2E-7b. Credit against taxes.

     (a) General. - When a qualified professional services

destination facility is located at or adjacent to an existing

historic resort hotel with at least five hundred rooms and the

qualified professional services destination facility eligible for

credit under this section is primarily engaged in furnishing

services that are not subject to the tax imposed by article

fifteen, chapter eleven of this code, then in lieu of the credits

that otherwise would be allowable under section seven or seven-a of

this article, the eligible company that complies with the

requirements of this section may claim the credit provided in this

section: Provided, That the maximum amount of credit allowable

under this section is equal to twenty-five percent of the eligible

company's qualified investment, as defined in this section.

     (b) Definitions. - The following words and phrases when used

in this section have the meanings given to them in this subsection

unless the context in which used clearly indicates that a different

meaning was intended by the Legislature.

     (1) "Agreement" means an agreement entered into under

subsection (g) of this section.

     (2) "Compensation" means wages, salaries, commissions and any

other form of remuneration paid to employees for personal services.

     (3) "Cost-of-living adjustment" for any calendar year is the

percentage, if any, by which the consumer price index for the

preceding calendar year exceeds the consumer price index for the calendar year 2015.

     (4) "Consumer price index" for any calendar year means the

average of the federal consumer price index as of the close of the

twelve-month period ending on August 31 of that calendar year.

     (5) "Eligible company" for purposes of this section means any

corporation, limited liability company, partnership, limited

liability partnership, sole proprietorship, business trust, joint

venture or any other entity operating a qualified professional

services destination facility, whether owned or leased, within the

state that: (A) creates at least one hundred twenty-five new jobs

in this state within thirty-six months after the date the qualified

investment is placed into service or use, and maintains those jobs

for the entire ten year life of the tax credit specified in this

section, (B) makes available to its full-time employees health

insurance coverage and pays at least fifty percent of the premium

for the health insurance, (C) generates, within thirty-six months

after the date the qualified investment is placed into service or

use, not less than $10 million of gross receipts upon which the

taxes imposed under article twenty-seven, chapter eleven of this

code are paid, and (D) meets the standards, limitations and

requirements of this section and of the development office. An

eligible company may operate or intend to operate directly or

indirectly through a lessee or a contract operator.

     (6) "Federal consumer price index" means the most recent

consumer price index as of August 31 each year for all urban consumers published by the United States Department of Labor.

     (7) "Health insurance benefits" means employer-provided

coverage for medical expenses of the employee or the employee and

his or her family under a group accident or health plan, or

employer contributions to an Archer medical savings account, as

defined in Section 220 of the Internal Revenue Code of 1986, as

amended, or to a health savings account, as defined in Section 223

of the Internal Revenue Code, of the employee when the employer's

contribution to any such account is not less than fifty percent of

the maximum amount permitted for the year as employer-provided

coverage under Section 220 or 223 of the Internal Revenue Code,

whichever section is applicable.

     (8) "Historic resort hotel" means a resort hotel registered

with the United States Department of the Interior on the effective

date of this amendment as a national historic landmark in its

National Registry of Historic Places having not fewer than five

hundred guest rooms.

     (9) "New employee" means a person residing and domiciled in

this state hired by the taxpayer to fill a position or a job in

this state which previously did not exist in the taxpayer's

business enterprise in this state prior to the date the application

was filed under subsection (c) of this section. In no event may the

number of new employees exceed the total net increase in the

employer's employment in this state: Provided, That the Tax

Commissioner may require that the net increase in the taxpayer's employment in this state be determined and certified for the

taxpayer's controlled group as defined in article twenty-four of

this chapter. In addition, a person is a "new employee" only if the

person's duties are on a regular, full-time and permanent basis:

     (A) "Full-time employment" means employment for at least

eighty hours per month at a wage not less than the amount specified

in subdivision (1), subsection (d) of this section; and

     (B) "Permanent employment" does not include employment that is

temporary or seasonal and therefore the wages, salaries and other

compensation paid to the temporary or seasonal employees will not

be considered for purposes of this section even if the compensation

paid to the temporary or seasonal employee equals or exceeds the

amount specified in paragraph (A) of this subdivision.

     (10) "New job" means a job which did not exist in the business

of the taxpayer in this state prior to filing the application for

benefits under this section, and which is filled by a new employee.

     (11) "Professional services" means only those services

provided directly by: a physician licensed to practice in this

State, a surgeon licensed to practice in this State, a dentist

licensed to practice in this State, a podiatrist licensed to

practice in this State, an osteopathic physician licensed to

practice in this State, a psychologist licensed to practice in this

State, an optometrist licensed to practice in this State, a

registered nurse licensed to practice in this State, a physician

assistant licensed to practice in this State, a licensed practical nurse licensed to practice in this State, a dental hygienist

licensed to practice in this State, a social worker licensed to

practice in this State, or any other health care professional

licensed to practice in this State;

     (12) "Qualified investment" means one-hundred percent of the

cost of property purchased or leased for the construction and

equipping of a qualified professional services destination facility

which is placed in service or use in this State by an eligible

company.

     (A) The cost of property purchased for a qualified

professional services destination facility is determined under the

following rules:

     (i) Cost does not include the value of property given in trade

or exchange for the property purchased for business expansion.

     (ii) If property is damaged or destroyed by fire, flood, storm

or other casualty, or is stolen, then the cost of replacement

property does not include any insurance proceeds received in

compensation for the loss.

     (iii) The cost of real property acquired by written lease for

a primary term of ten years or longer is one hundred percent of the

rent reserved for the primary term of the lease, not to exceed ten

years.

     (iv) The cost of tangible personal property acquired by

written lease for a primary term of not less than four years.

     (v) In the case of self-constructed property, the cost thereof is the amount properly charged to the capital account for

depreciation in accordance with federal income tax law.

     (vi) The cost of property used by the taxpayer out-of-state

and then brought 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, and the cost is the original cost of

the property to the taxpayer less straight line depreciation

allowable for the tax years or portions thereof the taxpayer used

the property outside this State. In the case of leased tangible

personal property, 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 facility of the

taxpayer, and is the rent reserved for the remaining period of the

primary term of the lease, not to exceed ten years, or the

remaining useful life of the property, determined as aforesaid,

whichever is less.

     (c) Credit against taxes. - The credit allowed by this section

shall be equal to twenty-five percent of the eligible company's

qualified investment in the qualified professional services

destination facility and shall be taken and applied as provided in

this subsection (c). Notwithstanding any other provision of this

article to the contrary, no taxpayer or group of taxpayers may gain

entitlement to more than $37.5 million total aggregate tax credit

under this section and no taxpayer, or group of taxpayers, in the

aggregate may apply more than $2.5 million of annual credit in any tax year under this section, either in the form of a refund or

directly against a tax liability or in any combination thereof.

This limitation applies to initial tax credit attributable to

qualified investment in a qualified professional services

destination facility, and to qualified investment in a follow-up

project expansion, so that credit attributable additively and in

the aggregate to both may not be applied to exceed $2.5 million

annual credit in any tax year.

     (1) Application of credit. - The amount of credit allowable

under this subsection shall be taken over a ten-year period, at the

rate of one tenth of the amount thereof per taxable year, beginning

with the taxable year in which the eligible company places the

qualified professional services destination facility, or part

thereof, in service or use in this state, unless the eligible

company elected to delay the beginning of the ten-year period until

the next succeeding taxable year. This election shall be made in

the annual income tax return filed under chapter eleven of this

code for the taxable year in which the qualified professional

services destination facility is first placed into service or use

by the taxpayer. Once made, the election may not be revoked. The

annual credit allowance is taken in the manner prescribed in

subdivision (3) of this subsection (c): Provided, That if any

credit remains after the initial ten year credit application

period, the amount of remaining credit is carried forward to each

ensuing tax year until used or until the expiration of the fifth taxable year subsequent to the end of the initial ten year credit

application period. If any unused credit remains after expiration

of the fifth taxable year subsequent to the end of the initial ten

year credit application period, the amount thereof is forfeited. No

carryback to a prior taxable year is allowed for the amount of any

unused portion of any annual credit allowance.

          (2) Placed in service or use. - For purposes of the credit

allowed by this subsection (c), qualified investment or qualified

investment property is considered placed in service or use in the

earlier of the following taxable years:

          (A) The taxable year in which, under the eligible company's

depreciation practice, the period for depreciation with respect to

the property begins; or

          (B) The taxable year in which the property is placed in a

condition or state of readiness and availability for a specifically

assigned function.

          (3) Application of annual credit allowance.

          (A) In general.- The aggregate annual credit allowance for the

current taxable year is an amount equal to the one-tenth part

allowed under subdivision (1) of this subsection for qualified

investment placed into service or use.

          (B) Application of current year annual credit allowance. - The

amount determined under this subsection (c) is allowed as a credit

against one hundred percent of the eligible company's state tax

liabilities applied as provided in paragraphs (C) and (D) of this subdivision (3), and in that order:

          (C) Corporation net income taxes. - The amount of allowable

tax credit for the year determined under paragraph (A) of this

subdivision (3) shall first be applied to reduce the taxes imposed

by article twenty-four, chapter eleven of this code, for the

taxable year determined before application of allowable credits

against tax.

          (D) Personal income taxes. -

          (i) If the eligible company is an electing small business

corporation, as defined in section 1361 of the United States

Internal Revenue Code of 1986, as amended, a partnership, a limited

liability company that is treated as a partnership for federal

income tax purposes or a sole proprietorship, then any unused

credit after application of paragraph (C) of this subdivision (3)

is allowed as a credit against the taxes imposed by article twenty-

one, chapter eleven of this code on the members, owners, partners

or interest holders in the eligible company.

          (ii) Electing small business corporations, limited liability

companies, partnerships and other unincorporated organizations

shall allocate the credit allowed by this article among their

members in the same manner as profits and losses are allocated for

the taxable year.

          (E) No credit is allowed under this subdivision (3) against

any employer withholding taxes imposed by article twenty-one,

chapter eleven of this code.

          (F) The tax credits allowed under articles thirteen-j,

thirteen-q, thirteen-s, thirteen-r, thirteen-w, and thirteen-aa of

this code may not be applied to offset any tax against which the

tax credit allowed under this article is allowed or authorized. No

person, entity, company, or eligible company authorized or entitled

to any tax credit allowed under this section or any member of the

unitary group or any member of the controlled group of which the

taxpayer is a member, may gain entitlement to any other economic

development tax credit or economic development tax incentive which

relates to the investment or activity upon which the credit

authorized under this section is based.

          (G) (i) In order to effectuate the purposes of this

subdivision (3), the Tax Commissioner may propose for promulgation

rules, including emergency rules, in accordance with article three,

chapter twenty-nine-a of this code.

          (ii) The Tax Commissioner may apply any amount of the tax

credit otherwise available to a Taxpayer under this article, to pay

any delinquent West Virginia state tax liability of the taxpayer,

and interest and penalties as applicable.

          (iii) Any amount of the tax credit otherwise available to a

taxpayer under this article may be applied by the applicable

administering agency to pay any outstanding obligation to a

Workers' Compensation Fund, as defined in article two-c of chapter

twenty-three of this code, or any outstanding obligation under the

West Virginia Unemployment Compensation Act.

          (iv) Any amount of the tax credit otherwise available to a

taxpayer under this article, may be applied by the applicable

administering agency to pay any delinquent or unpaid assessment,

fee, fine, civil penalty or monetary imposition imposed by the West

Virginia Division of Environmental Protection or the United States

Environmental Protection Agency, or any agency charged with

enforcing federal, state or local environmental or hazardous waste

regulations.

          (H) Unused credit, refundable credit. - If any annual credit

remains after application of preceding paragraphs of this

subdivision (3), the amount thereof shall be refunded annually to

the eligible company, and distributed in accordance with the credit

distribution specified in this subdivision (3): Provided, That the

amount thereof may not exceed the limitation on annual tax credit

or the limitation on total aggregate tax credit specified in this

section.

          (I) Forfeiture of credit. - If any credit remains after

expiration of the fifth taxable year subsequent to the end of the

initial ten year credit application period, such credit is

forfeited, and may not be used to offset any West Virginia tax

liability.

          (d) Compensation of employees filling new jobs.

          (1) The new jobs and new employee criteria which count toward

qualification of a taxpayer as an eligible company for purposes of

the tax credit allowed by this section shall be subject to the following limitations and requirements. A job counts toward

qualification of a taxpayer as an eligible company if the job is a

new job, as defined in this section, held by a new employee, as

defined in this section, and the new job:

          (A) Pays a median wage of at least $37,000 annually. Beginning

January 1, 2015, and on January 1 of each year thereafter, the Tax

Commissioner shall prescribe an amount that shall apply in lieu of

the $37,000 amount for new jobs filled during that calendar year.

This amount is prescribed by increasing the $37,000 figure by the

cost-of-living adjustment for that calendar year. If any increase

under this subdivision is not a multiple of $50, the increase shall

be rounded to the next lowest multiple of $50;

          (B) Provides health insurance. The employer may, in addition,

offer benefits including child care, retirement and other benefits;

and

          (C) Is a full-time, permanent position, as those terms are

defined in this section.

          (D) Jobs that pay less than the statewide average nonfarm

payroll wage, as determined annually by the West Virginia Bureau of

Employment Programs, or that pay that salary, but do not also

provide health benefits in addition to the salary, do not count

toward qualification of a taxpayer as an eligible company under

this section. Jobs that are less than full-time, permanent

positions do not count toward qualification of a taxpayer as an

eligible company under this section.

          (E) The employer having obtained qualification as an eligible

company under this section for the year in which the new job is

filled is not required to raise wages of the employees currently

employed in the new jobs upon which the initial qualification as an

eligible company under this section was based by reason of the

cost-of-living adjustment for new jobs filled in subsequent years

provided the employer continues to provide healthcare.

          (e) Application and review.

          (1) Application. - An eligible company that meets the

requirements of this section may apply to the Development Office

for entitlement to the tax credit authorized under this section.

The application shall be on a form prescribed by the Development

Office and shall include all of the following:

          (A) The name and address of the applicant;

          (B) Documentation that the applicant is a eligible company;

          (C) Documentation that the applicant meets the requirements of

this section;

          (D) Documentation that the applicant does not owe any

delinquent taxes or any other amounts to the federal government,

this state or any political subdivision of this state;

          (E) An affidavit that the applicant has not filed for or

publicly announced its intention to file for bankruptcy protection

and that the company will not seek bankruptcy protection within the

next six calendar months following the date of the application;

          (F) A waiver of confidentiality under section five-d, article ten, chapter eleven of this code for information provided in the

application; and

          (G) Any other information required by the Development Office.

          (f) Credit allowable.

          (1) Certified multiple year projects.

          (A) In general. - A multiple year qualified professional

services destination facility project certified by the West

Virginia Development Office is eligible for the credit allowable by

this article. A project eligible for certification under this

section is one where the qualified investment under this article

creates at least the required minimum number of new jobs but the

qualified investment is placed in service or use over a period of

up to three successive tax years: Provided, That the qualified

investment is made pursuant to a written business facility

development plan of the taxpayer providing for an integrated

project for investment at one or more new or expanded business

facilities, a copy of which must be attached to the taxpayer's

application for project certification and approved by the West

Virginia Development Office, and the qualified investment placed in

service or use during the first tax 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.

          (B) Application for certification. - The application for

certification of a project under this section shall be filed with

and approved by the West Virginia Development Office prior to any credit being claimed or allowed for the project's qualified

investment and new jobs created as a direct result of the qualified

investment. This application shall be approved in writing and

contain the information as the West Virginia Development Office may

require to determine whether the project should be certified as

eligible for credit under this article.

          (C) Review. - Within thirty days of receipt of a complete

application, the Development Office, in conjunction with the Tax

Division of the Department of Revenue, shall review the application

and determine if the applicant is an eligible company and that the

requirements of this section have been met. Applications not

approved within the thirty days specified in this subdivision are

hereby deemed denied.

          (D) Approval. - The Development Office may approve or deny the

application. Upon approval of an application, the Development

Office shall notify the applicant in writing and enter into an

agreement with the eligible company for benefits under this

section.

          (2) Certified follow-up project expansions.

          (A) An eligible company that intends to undertake a follow-up

project expansion, may apply to the West Virginia Development

Office for certification of a single, one-time, follow-up project

expansion, and entitlement to an additional tax credit under this

section in an amount which is the lesser of twenty-five percent of

qualified investment in the follow-up project expansion or $12.5 million. No taxpayer, or group of taxpayers, in the aggregate may

apply more than $2.5 million of annual credit in any tax year under

this section, either in the form of a refund or directly against a

tax liability or in any combination thereof. This limitation

applies to initial tax credit attributable to qualified investment

in a qualified professional services destination facility, and to

qualified investment in a follow-up project expansion, so that

credit attributable additively and in the aggregate to both may not

be applied to exceed $2.5 million annual credit in any tax year.

          (B) The requirements, limitations and qualifications

applicable to qualified professional services destination facility

projects under this section apply to follow-up project expansions,

except for those requirements, limitations and qualifications

expressly specified in this subdivision (2).

          (C) Requirements for certification of a follow-up project

expansion are as follows:

          (i) The eligible company, pursuant to certification and

authorization for entitlement to tax credit under subsection (1) of

this section (f), has placed qualified investment of not less than

$80 million into service in a qualified professional services

destination facility within an initial period of not more than

three tax years;

          (ii) The eligible company intends to place additional

qualified investment in service or use in the previously certified

qualified professional services destination facility project, or an expansion or extension thereof. In no case shall a follow-up

project expansion be certified if the follow-up project expansion

property is not contiguous to, or within not more than one mile of,

the initial qualified professional services destination facility;

          (iii) The eligible company proposes to place the qualified

investment in the follow-up project expansion in service or use in

the fourth tax year subsequent to the tax year in which qualified

investment was first placed into service or use in the initial

qualified professional services destination facility project, or

under a multiple year project certification, in the fourth, fifth

and sixth tax year subsequent to the tax year in which qualified

investment was first placed into service or use in the initial

qualified professional services destination facility project;

          (iv) The follow-up project expansion must create and maintain

at least twenty-five net new jobs held by new employees, in

addition to the new jobs created by the initial qualified

professional services destination facility project. The loss of any

West Virginia job at the eligible company will be subtracted from

the count of new jobs attributable to the follow-up project

expansion;

          (v) The West Virginia Development Office shall not issue more

than one certification for any follow-up project expansion; and

          (vi) The West Virginia Development Office shall not issue

certification of a follow-up project expansion unless the applicant

provides convincing evidence to show that the follow-up project expansion will result in jobs creation specified in this

subdivision, that such jobs will remain and be maintained in West

Virginia for at least ten years subsequent to the placement of

qualified investment into service or use in the follow-up project

expansion, that the follow-up project expansion will not operate to

the detriment of other West Virginia businesses or to the detriment

of the economy, public welfare or moral character of West Virginia

or its people.

          (g) Agreement.

          (1) The agreement between the eligible company and the

Development Office shall be entered into before any benefits may be

provided under this section.

          (2) The agreement shall do all of the following:

          (A) Specify the terms and conditions the eligible company must

comply with in order to receive benefits under this section, other

than those terms, limitations and conditions specified and mandated

by statute or regulation; and

          (B) Require the Development Office to certify all of the

following to the Tax Division of the Department of Revenue each

taxable year an agreement under this section is in effect:

          (i) That the eligible company is eligible to receive benefits

under this section;

          (ii) The number of new jobs created by the company during each

taxable year;

          (iii) The amount of gross wages, as determined for purposes of Form W2, as filed with the Internal Revenue Service, being paid to

each individual employed in a new job;

          (iv) The amount of an eligible company's qualified investment;

          (v) The maximum amount of credit allowable to the eligible

company under this section; and

          (vi) Any other information deemed necessary by the Development

Office.

          (h) Filing and contents.

          (1) Filing. - On or before the due date of the income tax

return for each tax year in which the agreement is in effect, an

eligible company shall file with the Tax Division of the Department

of Revenue a form prescribed by the Tax Commissioner.

          (2) Contents. - The form specified under subdivision (1) of

this subsection (h) shall request the following information:

          (A) The name and Employer Identification Number of the

eligible company;

          (B) The effective date of the agreement;

          (C) The reporting period end date;

          (D) Information relating to each individual employed in a new

job as required by the Tax Commissioner;

          (E) Aggregate gross receipts for the tax period and gross

receipts on which tax has been paid under article twenty-seven,

chapter eleven of this code for the tax period; and

          (F) Any other information required by the Tax Commissioner.

          (3) Taking of credit. - The taxpayer, participant or participants claiming the credit for qualified investments in a

certified project shall annually file with their income tax returns

filed under chapter eleven of this code:

          (A) Certification that the taxpayer's or participant's

qualified investment property continues to be used in the project

and if disposed of during the tax year, was not disposed of prior

to expiration of its useful life;

          (B) Certification that the new jobs created by the project's

qualified investment continue to exist and are filled by persons

who are residents of this State; and

          (C) Any other information the Tax Commissioner requires to

determine continuing eligibility to claim the annual credit

allowance for the project's qualified investment.

          (4) Confidentiality.- The contents of the completed form shall

be subject to the confidentiality rules set forth in section five-

d, article ten, chapter eleven of this code: Provided, That

notwithstanding the provisions of section five-d, article ten,

chapter eleven of this code, or any other provision of this code,

tax returns, tax return information and such other information as

may be necessary to administer the tax credits and programs

authorized and specified by this article and in this section may be

exchanged between the Tax Commissioner and the West Virginia

Development Office without restriction.







WVC 5 B- 2 E- 8

§5B-2E-8. Forfeiture of unused tax credits; credit recapture;

recapture tax imposed; information required to be

submitted annually to development office; transfer of

tax credits to successors.

  (a) The approved company or eligible company shall forfeit the

tourism development project tax credit allowed by section seven of

this article, or the tourism development expansion tax credit

allowed by section seven-a of this article, or the tax credit

allowed by section seven-b of this article, as applicable, with

respect to any calendar year and shall pay the recapture tax

imposed by subsection (b) of this section, if:

  (1) In any year following the first calendar year the project

is open to the public, the project fails to attract at least

twenty-five percent of its visitors from among persons who are not

residents of the state;

  (2) In any year following the first year the project is open

to the public, the project is not operating and open to the public

for at least one hundred days; or

  (3) The approved company or eligible company, as of the

beginning of each calendar year, has an outstanding obligation

under the West Virginia state tax and revenue laws; or

  (4) Any company, approved company or eligible company, to

which entitlement to the tax credit authorized under section seven-

b of this article has been previously established, fails to meet

the requirements specified in section seven-b for an eligible company and for a qualified professional services destination

facility, including, but not limited to, jobs maintenance, employee

wage and employee health benefits, aggregate gross receipts, and

gross receipts subject to the tax imposed under article twenty-

seven, chapter eleven of this code.

  (5) Any company, approved company or eligible company, to

which entitlement to the tax credit authorized under section seven-

b of this article has been previously established:

  (A) Is delinquent in payment of any assessment, fee, fine,

civil penalty or monetary imposition imposed by the West Virginia

Division of Environmental Protection or the United States

Environmental Protection Agency, or any agency charged with

enforcing federal, state or local environmental or hazardous waste

regulations.

  (B) Is delinquent in compliance with any order, injunction,

compliance agreement, agreed order, court order, mandamus or other

enforcement or compliance instrumentality of the West Virginia

Division of Environmental Protection or United States Environmental

Protection Agency or any agency charged with enforcing federal,

state or local environmental or hazardous waste regulations.

  (C) Is out of compliance or not compliant with any citation or

order issued by the

West Virginia Division of Environmental

Protection

or the

United States Environmental Protection Agency

, or

any agency charged with enforcing federal, state or local

environmental or hazardous waste regulations, requiring that a condition be abated or corrected.

  (b) In addition to the loss of credit allowed under this

article for the calendar year, a credit recapture tax is hereby

imposed on any approved company or successor eligible company that

forfeits the tourism development project tax credit or the tourism

development expansion project credit or the credit authorized under

section seven-b of this article, under the provisions of subsection

(a) of this section. The credit recapture tax shall apply and the

approved company, and successor eligible companies, and any other

person or entity that has received the tax credit allowed under

this article shall be liable for an amount of recapture tax equal

to all previously claimed tourism development project tax credit or

tourism development expansion project credit, or the tax credits

authorized under section seven-b of this article, and allowed by

this article, as applicable, plus interest and penalties applicable

in accordance with the Tax Procedure and Administration Act. The

recapture tax shall be calculated and paid pursuant to the filing,

with the Tax Commissioner of an amended return, and such other

forms, schedules and documents as the Tax Commissioner may require,

for the prior calendar year, or calendar years, for which credit

recapture is required, along with interest, as provided in section

seventeen, article ten, chapter eleven of this code: Provided, That

the approved company, eligible company, person or entity who

previously claimed the tourism development project tax credit, or

the tourism development expansion project credit, or the tax credits allowed by section seven-b of this article, as applicable,

under this article and successor eligible companies, persons or

entities are jointly and severally liable for payment of any

recapture tax subsequently imposed under this section. For purposes

of this recapture tax, the statute of limitations otherwise

applicable under the Tax Procedure and Administration Act shall not

begin to run until the eighteenth year subsequent to the earlier

of: the year when qualified investment is first placed into service

or use, or the year when the application for the tax credit

authorized under this article was filed with the West Virginia

Development Office.

  (c) Within forty-five days after the end of each calendar year

during the term of the agreement, the approved company shall supply

the development office with all reports and certifications the

development office requires demonstrating to the satisfaction of

the development office that the approved company is in compliance

with applicable provisions of law. Based upon a review of these

materials and other documents that are available, the development

office shall then certify to the Tax Commissioner that the approved

company is in compliance with this section.

  (d) The tax credit allowed in this article is transferable,

subject to the written consent of the development office, to an

eligible successor company that continues to operate the approved

project.







WVC 5 B- 2 E- 9

§5B-2E-9. Promulgation of rules.

The executive director of the development office may

promulgate rules to implement the project application approval

process and to describe the criteria and procedures it has

established in connection therewith. These rules are not subject

to the provisions of chapter twenty-nine-a of this code but shall

be filed with the Secretary of State.







WVC 5 B- 2 E- 10

§5B-2E-10. Legislative review.

The development office shall report annually to the joint

commission on economic development by the first day of December of

each year on the number of applications received from eligible

companies as provided in this article, the status of each

application, the number of projects approved, the status of each

project, the amount of credit allowed and the amount of consumers

sales and service tax generated by each project.







WVC 5 B- 2 E- 11

§5B-2E-11. Termination.

     The Development Office may not accept any new project

application after December 31, 2019, and all applications submitted

prior to January 1, 2020, that have not been previously approved or

not approved, shall be deemed not approved and shall be null and

void as of January 1, 2020.





Note: WV Code updated with legislation passed through the 2015 Regular Session

The WV Code Online is an unofficial copy of the annotated WV Code, provided as a convenience. It has NOT been edited for publication, and is not in any way official or authoritative.