1. Business Taxes in West Virginia: Background
2. Business Taxes in West Virginia: Corporation Net Income Tax
3. Business Taxes in West Virginia: Severance Tax
4. Business Taxes in West Virginia: Use Tax and Consumers' Sales and Service Tax (CSST)
5. Business Taxes in West Virginia: Business Registration Tax

The West Virginia franchise tax return has been making changes in its different businesses since 2007, which amount to $230 million a year and should be done by 2015. There are two basic business taxes in West Virginia:

  • Business franchise tax
  • Net income tax for corporations

In 2015, West Virginia did not collect on business franchise taxes.

Business Taxes in West Virginia: Background

Other taxes are requested for certain specialized industries, such as the severance tax for production of natural resources. Occupation and business tax is a type of privilege tax required for electric power generators, public utilities, and natural gas storage operators. Taxpayers in West Virginia who are 65 or older throughout a taxable year or who are totally and permanently disabled can get a deduction from their federal adjusted gross income of up to $8,000, no matter the source.

Up to $16,000 of a married couple's income, if they file a joint return and qualify, can be excluded from West Virginia's taxes. The MyTax page can be filed by West Virginia taxpayers online, as well as checking the status of their state income tax refunds online. If you need more information, you can contact the West Virginia State Tax Department's General Assistance by calling (800) 982-8297 or by visiting its website.

Business Taxes in West Virginia: Corporation Net Income Tax

The corporation net income tax is put in place yearly with a rate of 6.5 percent of taxable income at the federal level apportioned and allocated by West Virginia. The tax base is made up of the cash flow of the partnership or corporation which is purposeful for federal income tax purposes. The tax rate for 2014 was $50 or 0.10 percent of the tax basis allocated to the state, whichever was the greater amount, but this tax was done away with in 2015.

The occupation and business tax is a yearly privilege tax imposed on electric power generators, public utilities, and storage operators that are natural gas.

Business Taxes in West Virginia: Severance Tax

Taxes of severance are imposed on the natural resource production which include ordinary processing usually employed by the business to acquire a vendable product made from natural resources. These privileges will end at certain places, such as:

  • Gas and oil production will end at the well-mouth.
  • Rights for timber production end when the tree is de-limbed, severed, and topped.
  • Sandstone or limestone production rights end right after it's cut from the earth.
  • Privileges for coal production includes particular activities with coal processing.

Five percent is usually the amount of normal severance tax placed on many natural resources, and 1.22 percent is the tax rate on regular timber with an arrangement where this tax can be momentarily stopped until a day when the extra tax on timber severance ends.

Timber production, the production of natural gas, and coal are the topic of an extra severance tax that is under the 2005 Workers' Compensation Debt Reduction Act only up to the Old Workers' Compensation debt that is paid off in the next few years. Production of coal also has fees that might have special tax rates.

Business Taxes in West Virginia: Use Tax and Consumers' Sales and Service Tax (CSST)

West Virginia has a use tax and around six percent consumers' service and sales tax. Sale of service and goods to a make for direct use in making something are free from the use tax (for purchases made out-of-state) and CSST (for in-state purchases). Particular districts may force an extra local sales tax at a rate that does not go beyond one percent. The use tax is a companion tax to the consumer service and sales tax and is based on taxable services or the purchase price of palpable personal property.

The use tax must be paid by businesses or individuals directly to the State Tax Department on services purchased or palpable personal property which the West Virginia sales tax has not been paid; six percent is the statewide use tax rate. Local sales taxes of 0.5 percent to one percent are local sales tax collected by several West Virginia municipalities.

Business Taxes in West Virginia: Business Registration Tax

The one-time registration fee of $30 is for every location where business activity is conducted is due when a business registers in West Virginia.

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