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West Virginia uses a single sales factor formula and market-based sourcing for services and certain intangible property. Under this formula, the numerator includes sales occurring in West Virginia and the denominator includes sales occurring everywhere.
Sales on which a corporation does not pay tax in any state should not be included in the numerator but remain in the denominator of the sales factor. Under the “market-based sourcing” rule, sales of services go into the numerator of the sales factor based on whether the service was delivered to a customer in this state. Intangible property that is rented or licensed, or a contract right or government license, should also be included in the numerator of the sales factor if they were used in this state.
Prior to tax year 2022, West Virginia apportioned the income of multi-state corporations through use of a four-factor formula consisting of a property factor, a payroll factor, and a double weighted sales factor.
Corporation Net Income Tax
If your business is incorporated in West Virginia or does business or participates in certain other activities in West Virginia, you may have to file an annual West Virginia State Corporation tax return.
The Corporation Net Income Tax is a tax on the West Virginia taxable income of every domestic or foreign corporation which enjoys the benefits and protections of the government and laws in the State of West Virginia or derives income from property, activity or other sources in West Virginia.
Filing Status
Separate Entity Based
Use this method if you are filing a separate return and you are not engaged in a unitary business with one or more other corporations.
Combined Unitary Based
Corporations that are members of the same unitary business group must file a combined report including all required information of every business engaging in the unitary business with the corporation.
This report must be filed with each member’s separate return unless the group elects to designate a corporation as surety and file a group combined return.
Filing Methods
Separate Entity Based: Corporation Wholly in West Virginia
When filing a separate return as a Corporation Wholly in West Virginia, you may/will need to complete certain forms and schedules:
Separate Entity Based: Corporation With Multistate Activity
When filing a separate return as a Corporation With Multistate Activity, you may/will need to complete the forms and schedules above, except Schedule 1. Complete Schedule 2 and CIT-120APT.
Combined Reporting Based §11-24-13A (j)
Any taxpayer engaged in a unitary business with one or more other corporations shall file a combined report which includes the income, allocation, and apportionment of income of all corporations that are members of the unitary business.
Worldwide Unitary Combined reporting
You may choose to file Worldwide Unitary Combined Reporting, to do so, please fill out and sign West Virginia Form CIT-120OPT and attach to your return.
This election is binding for 10 years unless a written request to withdraw for reasonable cause has been sent to the Commissioner and granted.
Water’s Edge Reporting
Water’s Edge Reporting is mandated, absent an affirmative election to report based upon a Worldwide Unitary Combined Report.
Separate Combined Reporting
Use this method if you are filing a combined report but a separate return. Forms and schedules you would need to complete are the same as required for Separate Entity Filers with Multistate Activity.
You must use the correct UB-CR for the year which you are filing. To file a prior version, please see Prior Year Forms
Group Combined Reporting
Corporations use this method if they are members of the same unitary business group and elect to designate surety. Taxpayers must designate a surety FEIN in the space provided.
Forms and Schedules you may/will need to complete a group combined return are:
About Reporting the UB-CR
All Combined Reporting Corporate Income Tax returns are required to be filed electronically using an approved software vendor.
Note: A vendor that does not support electronic filing of the UB-CR cannot be approved for any Combined Filing. West Virginia only supports electronic filing of the Combined returns that include the UB-CR. Paper returns may only be submitted for periods that are 2 years past the current filing year and must include the UB-CR import spreadsheet in electronic excel format for the appropriate tax year. If the UB-CR spreadsheet is not submitted electronically or on removable media, the return will be rejected.
Do Not email the UB-CR spreadsheet. Emailed UB-CR spreadsheets will be rejected.
Estimated Taxes
Estimated Corporation Net Income Tax payments are required for any Corporation which can reasonably expect its West Virginia taxable income to be in excess of $10,000 (which equals a tax liability after tax credits in excess of $650.00) and are due in four equal installments on the 15th day of the fourth, sixth, ninth, and twelfth months of the tax year.
Filing Your Business Returns
Remember: If you file as Combined Separate or Combined Group, you must:
If you attach a Proforma Federal Income Tax Return, the following consolidated return data is also required:
Extension of Time to File
An extension of time to file a Federal Return is automatically accepted by West Virginia as an extension of time to file the West Virginia return.
A copy of Federal extension form (Federal Form 7004) must be attached to the West Virginia return when filed and the extended due date must be entered on top of the first page of the West Virginia State Tax Return.
A state extension of time to file may be obtained, even if a federal extension has not been requested, provided a written request is made to the West Virginia Tax Division prior to the due date of the return.
An extension of time to file does not extend the time for payment of tax due. If you have an extension of time to file, payment of any tax due may be made by filing a tentative return. (See the instructions for Form CIT-120EXT).
To avoid interest and penalties, payment must be received on or before the original due date of return.
Late Filing
Additions to tax are imposed for failure to file a return on or before the due date (determined with regard to an extension to file).
On any amount of tax shown to be on the return, the additions to tax for late filing is five percent (.05) per month or any part of a month, not to exceed twenty five percent (.25).
Amending State Returns
Any corporations whose reported income or deductions are changed or corrected by the Internal Revenue Service are required to report the change or correction to the West Virginia Tax Division.
This report must be made within 90 days of the final determination by filing an amended return, supporting schedules, and attaching a copy of the revenue agent’s report detailing such adjustments.
Tax Forms and Instructions
Credit Forms and Schedules
In accordance with the Tax Cuts and Job Act (TCJA) West Virginia has eliminated the NOL carryback beginning with tax year 2021 and future years.
Payments
Mailing Addresses
Assistance