West Virginia Code 11-13GG-5 – Application of annual credit allowance

(a) In general. — The aggregate annual credit allowance for the current taxable year is an amount equal to the sum of the following:

Terms Used In West Virginia Code 11-13GG-5

Business: means a downstream natural gas manufacturing business activity which is engaged in by any person in this state which is taxable under §. See West Virginia Code 11-13GG-3
Commissioner: means the State Tax Commissioner. See West Virginia Code 11-22-1
Compensation: means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services. See West Virginia Code 11-13GG-3
Corporation: means any corporation, joint-stock company, association, or other entity treated as a corporation for federal income tax purposes, and any business conducted by a trustee or trustees wherein interest or ownership is evidenced by a certificate of interest or ownership or similar written instrument. See West Virginia Code 11-13GG-3
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Downstream natural gas manufacturing: refers to oil and gas manufacturing operations after the production and processing phases and includes, but is not limited to, facilities that use oil, natural gas, natural gas liquids, or the products produced by ethane crackers as raw materials to manufacture industrial and commercial products. See West Virginia Code 11-13GG-3
Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. ^{Source: U.S. Courts}
including: when used in a definition contained in this article, shall not be considered to exclude other things otherwise within the meaning of the term defined. See West Virginia Code 11-13GG-3
Limited liability company: means a limited liability company organized under the laws of this state, the United States or by any other state, territory or the District of Columbia. See West Virginia Code 11-22-1
Natural gas: means a gaseous fossil energy source that formed deep beneath the earth's surface that is a combustible mixture of methane and other hydrocarbons. See West Virginia Code 11-13GG-3
Partnership: includes a syndicate, group, pool, joint venture, or other unincorporated organization through or by means of which any business, financial operation, or venture is carried on, which is treated as a partnership for federal income tax purposes, and which is not a trust or estate, a corporation, or a sole proprietorship. See West Virginia Code 11-13GG-3
Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
Person: includes any natural person, corporation, or partnership. See West Virginia Code 11-13GG-3
State: when applied to a part of the United States and not restricted by the context, includes the District of Columbia and the several territories, and the words "United States" also include the said district and territories. See West Virginia Code 2-2-10
Tax year: means the calendar year following the July first assessment day or, in the case of a public service business assessed pursuant to article six of this chapter, the calendar year beginning on the January first assessment day. See West Virginia Code 11-5-3
Taxpayer: means any person subject to any of the taxes imposed by §. See West Virginia Code 11-13GG-3
This code: means the Code of West Virginia, 1931, as amended. See West Virginia Code 11-13GG-3
This state: means the State of West Virginia. See West Virginia Code 11-13GG-3

(1) The one-tenth part allowed under § 11-13GG-4 of this code for qualified investment property placed into service or use during a prior taxable year; plus

(2) The one-tenth part allowed under § 11-13GG-4 of this code for qualified investment property placed into service or use during the current taxable year.

(b) Application of current year annual credit allowance. — The amount determined under subsection (a) of this section is allowed as a credit against 80 percent of that portion of the taxpayer‘s state tax liability which is attributable to and the direct result of the taxpayer’s qualified investment, and applied as provided in subsections (c) and (d), both inclusive, of this section, and in that order: Provided, That if the median salary of the new jobs is higher than the statewide average nonfarm payroll wage, as determined annually by Workforce West Virginia, the amount determined under subsection (a) of this section is allowed as a credit against 100 percent of that portion of the taxpayer’s state tax liability which is attributable to and the direct result of the taxpayer’s qualified investment, and shall be applied, as provided in subsections (c) through (d), both inclusive, of this section, and in that order.

(1) That portion of the allowable credit attributable to qualified investment in a downstream natural gas manufacturing facility may be applied to reduce the taxes imposed by §11-24-1 et seq. of this code for the taxable year as determined before application of allowable credits against tax.

(2) If the taxes due under §11-24-1 et seq. of this code, as determined before application of allowable credits against tax, are not solely attributable to and the direct result of the taxpayer’s qualified investment in a downstream natural gas manufacturing business, the amount of the taxes that is attributable are determined by multiplying the amount of taxes due under §11-24-1 et seq. of this code for the taxable year, as determined before application of allowable credits against tax, by a fraction, the numerator of which is all wages, salaries, and other compensation paid during the taxable year to all employees of the taxpayer employed in this state whose positions are directly attributable to the qualified investment. The denominator of the fraction is the wages, salaries, and other compensation paid during the taxable year to all employees of the taxpayer employed in this state.

(d) Personal income taxes. —

(1) If the person making the qualified investment in a downstream natural gas manufacturing facility is an electing small business corporation, as defined in section 1361 of the United States Internal Revenue Code, 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 is allowed as a credit against the taxes imposed by §11-21-1 et seq. of this code on the income from downstream natural gas manufacturing facility, or on income of a sole proprietor attributable to the downstream natural gas manufacturing facility.

(2) Electing small business corporations, limited liability companies treated as partnerships for federal income tax purposes, partnerships, and other unincorporated organizations shall allocate the credit allowed by this article among its members in the same manner as profits and losses are allocated for the taxable year.

(3) If the amount of taxes due under §11-21-1 et seq. of this code, as determined before application of allowable credits against tax, that is attributable to business, is not solely attributable to and the direct result of the qualified investment of the electing small business corporation, limited liability company treated as a partnership for federal income tax purposes, other unincorporated organization, or sole proprietorship, the amount of the taxes that are so attributable are determined by multiplying the amount of taxes due under §11-21-1 et seq. of this code, as determined before application of allowable credits against tax that is attributable to business by a fraction, the numerator of which is all wages, salaries, and other compensation paid during the taxable year to all employees of the electing small business corporation, limited liability company, partnership, other unincorporated organization, or sole proprietorship employed in this state, whose positions are directly attributable to the qualified investment. The denominator of the fraction is the wages, salaries, and other compensation paid during the taxable year to all employees of the taxpayer.

(4) No credit is allowed under this section against any employer withholding taxes imposed by §11-21-1 et seq. of this code.

(e) If the wages, salaries, and other compensation fraction formula provisions of subsections (c) and (d) of this section, inclusive, do not fairly represent the taxes solely attributable to and the direct result of qualified investment of the taxpayer the Tax Commissioner may require, in respect to all or any part of the taxpayer’s businesses or activities, if reasonable:

(1) Separate accounting or identification;

(2) Adjustment to the wages, salaries, and other compensation fraction formula to reflect all components of the tax liability;

(3) The inclusion of one or more additional factors that will fairly represent the taxes solely attributable to and the direct result of the qualified investment of the taxpayer and all other project participants in the businesses or other activities subject to tax; or

(4) The employment of any other method to effectuate an equitable attribution of the taxes.

In order to effectuate the purposes of this subsection, the Tax Commissioner may propose for promulgation rules, including emergency rules, in accordance with §29A-3-1 et seq. of this code.

(f) Unused credit. — If any credit remains after application of subsection (b) of this section, the amount thereof is carried forward to each ensuing tax year until used or until the expiration of the tenth taxable year subsequent to the end of the initial 10-year credit application period. If any unused credit remains after the 20th year, 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.

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