W. Va. Code R. § 110-13X-4

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-13X-4 - Requirements for Tax Credit; Application for Tax Credit

4.1. In order for any company to take a credit under W. Va. Code § 11-13X-1, et seq., it shall comply with the following requirements:

4.1.1. Each qualified project must incur the cumulative amount, specified in the definition of "qualified project" set forth in W. Va. §11-13X-3, in expenditures in West Virginia or with a West Virginia vendor, or any combination of projects not previously claimed that would qualify for the credit except for cost, and that combined meets or exceeds the cumulative amount in a calendar year.

4.1.2. If the qualified project contains production credits, the eligible company shall agree, upon request by the Department of Economic Development, to recognize the State of West Virginia with the following acknowledgement in the end credit roll: "Filmed in West Virginia with assistance of the West Virginia Film Industry Investment Act";

4.1.3. Apply to the Department of Economic Development on forms and in the manner the Department of Economic Development may prescribe.

4.1.3.a. A company shall submit to the Department of Economic Development one (1) completed West Virginia Film Industry Investment Act eligibility application, with original signatures and attachments. The eligible company should submit an eligibility application as far in advance as possible prior to the first expenditure in West Virginia. However, an eligible company may submit an application at any time during production or after production. The Department of Economic Development may deny the application if it does not meet all eligibility requirements. Qualified costs incurred prior to the approval of an application are eligible for the incentive if approved.

4.1.3.b. The application shall include, but not be limited to:

4.1.3.b.1. A completed West Virginia Film Industry Investment Act eligibility application;

4.1.3.b.2. A copy of the script, or, for music videos or commercial still photography, a copy of the storyboards or shot lists;

4.1.3.b.3. Proof or status of financing or distribution arrangements;

4.1.3.b.4. A copy of the budget top sheet, which contains a dedicated column that identifies estimated direct production expenditures and post-production expenditures that will be incurred in West Virginia;

4.1.3.b.5. A signature and verification by the applicant or by a duly authorized representative of the applicant;

4.1.3.b.6. The full legal name and tax identification number of the applicant;

4.1.3.b.7. The applicant's physical address, mailing address and telephone number; and

4.1.3.b.8. A certified copy of the applicant's certificate of incorporation, articles of organization, or other similar documents that verify the applicant is in good standing and registered to do business in the state of West Virginia.

4.1.3.c. Application forms may be obtained from the West Virginia Department of Economic Development.

4.1.4. Upon approval of an eligibility application, the eligible company shall begin production within one hundred twenty (120) days of approval, or shall otherwise forfeit the right to claim any tax credit for the approved qualified project. The forfeiture does not preclude the eligible company from resubmitting an eligibility application for the same project at a future date. Upon written request by the eligible company, and prior to the expiration of the one hundred twenty (120) day deadline, the Department of Economic Development may extend the deadline at its discretion.

4.2. The applicant shall submit to the Department of Economic Development information required by the Department of Economic Development to demonstrate conformity with the requirements of this section and shall agree in writing:

4.2.1. To pay all obligations the eligible company has incurred or will in future incur in West Virginia;

4.2.2. To delay filing a claim for the tax credit authorized by W. Va. Code § 11-13X-1, et seq. until the Department of Economic Development delivers written notification to the Tax Commissioner that the eligible company has fulfilled all requirements for the credit.

4.2.3. Each allocation year stands on its own. It is necessary for an eligible company to file a new application for each year in order to be considered for credit allocation in each specific year. Projects are approved on a first come, first served basis. The maximum amount of project tax credit for any taxable year is the amount allocated by the Department of Economic Development through the project review and certification process.

4.2.4. Any television series that has been approved and issued an approval letter, shall be placed at the top of the queue for an open allocation period on each subsequent year in the life of that series whenever credits are assigned within a fiscal year. Queue placement in subsequent years will be based on the year of original application and original queue number assigned for that series. Each television series must submit a new application for each season prior to any open application period.

4.3. Upon completion of a qualified project:

4.3.1. An eligible company shall have filed all required West Virginia tax reports and returns and paid any balance of West Virginia tax due on those returns;

4.3.2. All claims for the tax credit shall be filed with an expense verification report prepared by an independent certified public accountant licensed to practice in the United States, using "Agreed Upon Procedures" which are prescribed by the Department of Economic Development in accordance with generally accepted auditing standards in the United States. The certified public accountant shall render a report as to the qualification of the credits, consistent with guidelines to be determined by the Department of Economic Development and approved by the Tax Commissioner; and

4.3.3. An eligible company claiming an extra allowance for employing local workers shall submit to the Department of Economic Development documentation verifying West Virginia residency for all individuals claimed to qualify for the extra allowance. The documentation shall include the name, home address and telephone number for all individuals used to qualify for the extra allowance.

4.4. Disqualification. The Department of Economic Development may disqualify in whole or in part any investment or expenditure from eligibility for the tax credit if it appears that the economic substance of an expenditure is not for services substantially rendered in West Virginia, or is for the purchase or lease of tangible personal property not used or operated in West Virginia or is for purchases or leases of realty not located in West Virginia.

4.4.1. The Department of Economic Development may disqualify in whole or in part any investment or expenditure from eligibility for the tax credit if it appears that the economic substance of an expenditure or transaction constitutes self dealing or an expenditure or investment primarily directed to or received by the purchaser or investor, or by an alter ego of the purchaser or investor or by a related person related to the purchaser or investor or by a member of the same controlled group as the controlled group to which the purchaser or investor belongs.

4.4.2. For purposes of this rule, an entity or person is presumed to be an alter ego, nominee or instrumentality of another person, entity or business if:

4.4.2.a. More than twenty percent of the real assets or more than twenty percent of the operating assets or more than twenty percent of the tangible personal property of one person, entity or business are or have been transferred to the other person, entity or business, or are or have been used in the operations of the other person, entity or business, or more than twenty percent of the real assets or more than twenty percent of the operating assets or more than twenty percent of the tangible personal property of one business are or have been used to collateralize or secure debts or obligations of the other person, entity or business;

4.4.2.b. Ownership of the persons, entities or businesses is so configured that the attribution rules of either Internal Revenue Code section 267 or Internal Revenue Code section 318 would apply to cause ownership of the persons, entities or businesses to be attributed to the same person, entity or business; or

4.4.2.c. Substantive control of the persons, entities or businesses is held or retained by the same person, entity or business, directly or indirectly, or through attribution under paragraph 4.4.2.b of this rule.

4.5. If the requirements of this section have been complied with as determined by the Department of Economic Development, the Department of Economic Development shall approve the tax credit and issue a document granting the appropriate tax credit to the eligible company and shall report this information to the Tax Commissioner.

W. Va. Code R. § 110-13X-4