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The West Virginia Corporation Net Income Tax under Legislative regulations is a direct Income tax imposed on domestic and foreign corporations engaged in business deriving income in any form, in the state of West Virginia.
Discussed in this report are: Businesses Exempt from Taxation, Federal Taxable Income Expenditures, Modifications Decreasing Federal Taxable Income for State Tax Purposes, apportionment Factor Adjustments, Modifications Decreasing West Virginia Taxable Income and Credits.
Business Franchise Tax
The Business Franchise Tax was imposed between July 1, 1987 and December 31, 2014.
This was a tax on the “privilege of doing business” in West Virginia and was levied on the wealth of a business as measured by net worth. For Corporations and Partnerships the measure of the tax was their capital as defined by the Statute.
After the application of financial obligations adjustments, the taxpayer’s net worth was apportioned to West Virginia based on a three-factor apportionment formula. The rate gradually phased out over a seven-year span from 0.55 percent in 2008 to 0 percent by 2015.
Personal Income Tax
The largest source of revenue generated for the state of West Virginia is through the Personal Income Tax. All taxable income of resident individuals, estates, and trusts, Nonresident individuals, estates and trusts are taxable if income has been received from West Virginia sources.