Starting a Business in West Virginia
West Virginia is a state that understands economic resiliency. In spite of having an economy that has consistently faced hardship, West Virginians have shown great strength. A good number of startups have come along in recent years, many coming from people who have started these businesses after losing their jobs. One big plus for those startups is a cost of living that is much lower than many other states in the nation. With money that is saved from living expenses being low, entrepreneurs have more money to put into their businesses. West Virginia businesses can choose from many different resources to help them succeed. They can benefit from multiple incentive programs to expand their operations. The most common are incentives that are given through tax credits, exemptions, grant/loan programs, and to companies who reside inside designated Opportunity and Empowerment Zones.
STEPS TO STARTING A BUSINESS IN WEST VIRGINIAThe West Virginia Secretary of State helps those that want to form a business. Once you have selected a name for a company and filed the proper documents with the West Virginia Secretary of State, you can apply online for a FEIN Tax ID. After starting a business in West Virginia, there are many other things to do like looking up a West Virginia sales tax rate and trying to pay West Virginia sales tax, and checking form: WV/BUS-APP. One extremely important step is to make sure you obtain the correct Business Licenses for your company so you avoid costly fines and penalties. There have been recent changes in legislation regarding the collection of sales tax. You may also need to apply for SST streamlined sales tax if you make out of state sales and exceed certain levels:
- West Virginia offers Sales Tax Exemptions for businesses within certain industries which include Research & Development, Warehousing, Manufacturing and the energy used in the manufacturing process, and e-commerce businesses. Capital expenditures on equipment and machinery used in R & D as well as in the manufacturing process of tangible personal property that is for resale qualify for an exemption. Additionally, an exemption is available for equipment and material related expenses used in the development of a manufacturing location. The cost of equipment and machinery used in warehousing and distribution qualify for an exemption. Different computer equipment is also sales tax exempt for many online businesses.
- West Virginia also has a data center tax exemption project. Sales and Property Tax Abatements are given to any data center equipment that is used in a technology or online advertising based business. Sales Tax Exemptions are given to any qualified data center equipment or services related to that equipment. Eligible data center exemptions include:
- 5% discount on personal property tax on Tangible personal property.
- Power Infrastructure is exempt from sales tax.
- Pre-written computer software is exempt from sales tax.
- Building materials used to construct a data center are exempt from sales tax.
- Tangible personal property used in a data center is exempt from sales tax.
- The West Virginia Opportunity Zone Program provides great benefits to new businesses as well as those who relocate to economically distressed areas. These businesses will get value from receiving tax breaks that will ultimately help them to grow and prosper.
- The West Virginia Headquarters Relocation Tax Credit provides a state tax credit to businesses to relocate their head base of operations into the state. To qualify, a minimum of 15 employment positions must be filled. If requirements are met a 10% credit may be applied towards a company’s corporate income tax burden. The goal is to bring viable human resources to West Virginia. The credit is taken against the company’s state tax corporate income tax obligation.
- West Virginia has major workforce development job training programs that can help a business enhance its workforce base and provide good quality training to its employees. These programs are known as the West Virginia Advance Program, Workforce Innovation Act, and the Governor’s Workforce Program.
- To expand the skill sets of current or new employees, the advance program collaborates with local educational institutions to offer continual job training. A mix of services and awards are given to businesses in need.
- The workforce innovation program helps businesses connect with the correct type of workers that match with their needs. Employees benefit from getting paid training while businesses get credit for a portion of their training expenses.
- The governor’s workforce training program provides capital to eligible businesses that helps finance ongoing education and training. To qualify a company must create a minimum of ten jobs within one year.