W. Va. Code R. § 110-23-2

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

Section 110-23-2 - General Overview

2.1. The business franchise tax is imposed on partnerships, as defined in Section 3.19 of these regulations, and corporations, as defined in Section 3.8 of these regulations, beginning July 1, 1987. The tax is imposed upon the privilege of doing business in the State of West Virginia or owning or leasing property having its business situs in the State. The tax is not an ad valorem property tax.

2.2. The measure of tax is the "capital" of the partnership or corporation, as defined in Section 3.4 of these regulations. If the taxpayer is taxable in more than one state, its capital must be apportioned using a four factor formula (property, payroll and sales) in which the sales factor is double weighted and the denominator is four. The tax rate is .75 percent of the adjusted and apportioned capital of the taxpayer. The minimum tax is fifty dollars ($50.00).

2.3. The tax is an annual tax, ninety percent (90%) of which must be remitted in installment payments during the taxable year by taxpayers having an estimated tax liability of more than twelve thousand dollars ($12,000.00). The taxable year is the same as the taxpayer's taxable year for federal income tax purposes. In the case of calendar year taxpayers, the annual return of corporations is due on March 15th of the next taxable year, and the annual return of partnerships is due on April 15th of the next taxable year. Declarations of estimated tax are due from calendar year taxpayers on April 15th of the current taxable year, at which time one-fourth (1/4) of the estimated tax must be remitted. Remaining installment payments are due June 15th, September 15th and December 15th for such calendar year taxpayers.

2.4. Credit is allowed against the tax for the payment of West Virginia bank shares taxes. Credit is also allowed for West Virginia business franchise taxes paid by subsidiaries, and credit is allowed for business and occupation tax paid.

2.5. Certain partnerships and corporations are exempt from the tax. This includes entities exempt from federal income taxes; insurance companies which pay the State premiums tax; farming partnerships and corporations and joint ventures which are not required to file federal partnership income tax returns under Section 761 of the Internal Revenue Code.

2.6. The business franchise tax is administered under the West Virginia Tax Procedure and Administration Act, W. Va. Code '11-10-1 et seq. Criminal penalties applicable with regard to administration of the business franchise tax are found in the West Virginia Tax Crimes and Penalties Act, W. Va. Code '11-9-1 et seq.

W. Va. Code R. § 110-23-2