(A) Generally. On and after January 1, 2009, only the following tax credits may be used as incentives for the development and/or expansion of business properties in the city; provided, that for purposes of this section, in addition to the terms defined in § 38.001, the following terms shall have the meaning ascribed herein.
AFFILIATE.
(a) Includes all persons, as defined in this section, which are affiliates of each other, when either directly or indirectly:
1. One person controls or has the power to control the other; or
2. A third party or third parties control or have the power to control two persons, the two thus being affiliates. In determining whether concerns are independently owned and operated and whether or not an affiliation exists, consideration shall be given to all appropriate factors, including common ownership, common management and contractual relationships.
(b) The term AFFILIATE includes a member of an affiliated group.
ANNEXED BUSINESS FACILITY. A business facility that is annexed into the city subsequent to January 1, 2009.
BASE YEAR EMPLOYMENT. The average employment within the city, which the qualified business utilized to conduct business taxable under this subchapter during the 12-month period immediately preceding first application for this credit.
BUSINESS FACILITY. A building, or several buildings in a given area that are constructed in accordance with a development plan approved by the City Treasurer, such building or buildings to be primarily used for the buying and selling of goods and services including management information services. BUSINESS FACILITY shall also include a factory, mill, plant, refinery, warehouse or building or complex of buildings, including the land upon which it is located, and all machinery, equipment and other real and tangible personal property located at or within such facility that is used in connection with the operation of such facility in the manufacturing, compounding or preparing of tangible personal property for sale, profit or commercial use, and in the business of providing a manufacturing service. BUSINESS FACILITY shall not include residential buildings used by transient individuals for temporary residential purposes or facilities used for gambling purposes.
CITY. The City of Nitro, West Virginia.
CORPORATION.
(a) Includes any corporation, a joint-stock company and any association or other organization that is classified as a corporation under federal income tax law.
(b) The term CORPORATION includes a limited liability company if it is taxable as a corporation under federal income tax law.
EXPANDED BUSINESS FACILITY. Any business facility situated in the city, other than a new business facility or annexed business facility, resulting from the acquisition, construction, reconstruction, installation or erection of improvements or additions to that existing business facility if such improvements or additions are purchased or constructed on or after January 1, 2009.
FULL-TIME EMPLOYEE.
(a) A permanent hourly employee of an eligible taxpayer, who is a West Virginia domiciled resident, and works in a qualified business more than 1,800 hours during the entire 12-month period ending on the last day of the taxable year of the qualified business, such hours to include any combination of hours worked at the qualified business, hours of employer paid vacation leave and other employer paid leave, but shall not include unemployment compensation.
(b) FULL-TIME EMPLOYEE does not include an employee who is a part-time, seasonal or temporary employee.
1. No combination of part-time, seasonal or temporary employees may be considered equivalent to a FULL-TIME EMPLOYEE.
2. No person who is not an employee (such as an independent contractor) may be considered a FULL-TIME EMPLOYEE.
3. An employee who moves to West Virginia in order to become a West Virginia domiciled resident in order to fill a new job may be counted as a full-time employee if he or she otherwise qualifies as a FULL-TIME EMPLOYEE.
MANAGEMENT INFORMATION SERVICES. Means, and is limited to, data processing, data storage, data recovery and backup, programming recovery and backup, telecommunications, computation and computer processing, computer programming, electronic information, and data management activities, or any combination of such activities, when not subject to regulation by the state’s Public Service Commission, when such activity or activities are carried on for the purpose of managing, planning for, organizing or operating any industrial or commercial business, or any enterprise, facility or facilities of an industrial or commercial business regardless of whether such industrial or commercial business or enterprise facility is located in this city.
MAYOR. The Mayor of the City of Nitro, West Virginia.
NEW BUSINESS FACILITY. A business facility, other than an expanded business facility or an annexed business facility, that on or after January 1, 2009, is newly constructed, purchased or leased by the taxpayer and located within the boundaries of the city, and is employed by the taxpayer in the conduct of a business the gross income of which is taxable pursuant to this subchapter. The facility shall not be considered a new business facility in the hands of the taxpayer if the taxpayer’s only activity with respect to the business facility is to lease it to another person or persons. The facility may not have been purchased or leased by the taxpayer from a related or affiliated person.
NEW EMPLOYEE. A person residing and domiciled in this state, who was hired by the taxpayer to fill a new position or a new job in this city which previously did not exist in the taxpayer’s existing business facility in this city prior to the date on which the taxpayer’s qualified investment is placed in service or use in this city, or which came into existence when the taxpayer’s qualified investment was placed in service or use in this city. In no case shall the number of new employees directly attributable to such investment for purposes of this credit exceed the total net increase in the taxpayer’s employment in this city; provided, that persons filling jobs saved as a direct result of taxpayer’s qualified investment in property purchased or leased for business expansion on or after January 1, 2009, may be treated as new employees filling new jobs if the taxpayer certifies the material facts to the City Treasurer and the City Treasurer expressly finds that:
(a) But for the new employer purchasing the assets of a business in bankruptcy under chapter seven or eleven of the United States Bankruptcy Code and such new employer making qualified investment in property purchased or leased for business expansion, the assets would have been sold by the United States bankruptcy court in a liquidation sale and the jobs so saved would have been lost; or
(b) But for taxpayer’s qualified investment in property purchased or leased for business expansion in this City, taxpayer would have closed its business facility in this City and the employees of the taxpayer located at such facility would have lost their jobs; provided, however, that this certification may not be made unless the City Treasurer finds that the taxpayer is insolvent as defined in 11 U.S.C. § 101(31) or that the taxpayer’s business facility was destroyed in whole or in significant part by fire, flood or other act of God.
NEW JOB. A job at a qualified business located in this city, which did not exist in this city with the employer as of the first day of the second calendar month preceding the calendar month in which the qualified investment in the qualified business came into service or use.
ORDINANCES. The Codified Ordinances of the City of Nitro, West Virginia and those ordinances enacted by the city but which have not been incorporated into said codified ordinances of the City of Nitro, West Virginia.
PARTNERSHIP.
(a) Includes a syndicate, group, pool, joint venture or other unincorporated organization through or by means of which any business, financial operation, or venture is carried on, which is classified as a partnership for federal income tax purposes for the taxable year.
(b) The term PARTNERSHIP may include a limited liability company if it is not taxable as a corporation under federal income tax law.
PERSON. Includes any natural person, corporation, partnership or limited liability company.
PROPERTY.
(a) Real property, and improvements thereto, and new, tangible personal property, but only if such property was constructed, or purchased, on or after the passage of this section for use as a component part of an ongoing business operation located within the city. This term includes only tangible personal property with respect to which depreciation is allowable in determining the personal income tax or corporate net income tax liability of the business taxpayer, and has a useful life at the time the property is placed in service or use in this city of four years or more. Property acquired by written lease for a primary term of five years or longer, if used as a component part of an expanded business facility, shall be included within this definition.
(b) PROPERTY, within the meaning of this definition, shall not include:
1. Repair costs, including materials used in the repair, unless for federal income tax purposes the cost of the repair shall be capitalized and not expended;
2. Motor vehicles licensed by the Department of Motor Vehicles;
3. Airplanes;
4. Off premise transportation equipment; or
5. Property which is acquired incident to the purchase of the stock or assets of a taxpayer, or which is property was or had been used by the seller in the seller’s business in the city; provided, that, the City Treasurer may waive this disqualification.
QUALIFIED BUSINESS. Any business subject to the business and occupation taxes imposed by this subchapter that, after the passage of this section, and in the first 12 months of the business’ existence in the city makes qualified investment in a new business facility that results in the next succeeding 24 months in a full-time average work force of at least five persons or a yearly gross income as defined in § 38.001 of at least $500,000; provided, that if the qualified investment is in an expanded business facility, the qualified investment shall occur in the first 12 months after approval is granted under division (K) below, and during the next succeeding 24 months the qualified business’ full-time average yearly work force shall increase by at least five persons over base year employment or the qualified business’ yearly gross income as defined in § 38.001 shall increase by at least $500,000. QUALIFIED BUSINESS shall also include an affiliated group of taxpayers if such group elects to file a West Virginia consolidated corporation net income tax return under W. Va. Code 11-24-1 et seq.
QUALIFIED INVESTMENT. A monetary investment, other than investment for regular or normal maintenance purposes, in either a new or expanded business facility located within the municipal boundaries of the city.
(B) Manufacturing business.
(1) Any qualified business taxable under § 38.006 shall be eligible for a decreasing tax credit to be taken over a period of four years, and applied against the taxpayer’s business and occupation tax liability arising under said § 38.006. The first taxable year, for purposes of this tax credit, shall commence on the first day of the taxpayer’s fiscal year immediately succeeding the month in which the qualified investment is first placed in service or use; provided, that for purposes of this tax credit, each subsequent tax year shall commence on the anniversary date of the first taxable year. The total amount of the tax credit taken may not exceed the total amount of the qualified investment.
(2) The tax credit herein authorized shall be calculated as follows.
(a) New manufacturing business facility.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(B) Expanded manufacturing business facility. The tax credit treatment accorded to the qualified investment in a qualified expanded manufacturing business facility shall be the same as that accorded to a qualified new manufacturing business facility; provided, that the tax credit shall only apply to that incremental portion of the gross income directly attributable to the qualified investment in the expanded business facility. Upon determining the portion upon which the tax credit shall be applied, the tax credit shall be calculated as follows.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(C) Retail or wholesale business.
(1) Any qualified business that commences retail or wholesale sales activities within the corporate limits of the city that are taxable under § 38.007 shall be eligible for a decreasing tax credit to be taken over a period of four years, and applied against the taxpayer’s business and occupation tax liability arising under said § 38.007. The first taxable year, for purposes of this tax credit, shall commence on the first day of the taxpayer’s fiscal year immediately succeeding the month in which the qualified investment is first placed in service or use; provided, that for purposes of this tax credit, each subsequent tax year shall commence on the anniversary date of the first taxable year. The total amount of the tax credit taken may not exceed the total amount of the qualified investment.
(2) The tax credit herein authorized shall be calculated as follows.
(A) New retail or wholesale business facility.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(b) Expanded retail or wholesale business facility. The tax credit treatment accorded to the qualified investment in a qualified expanded retail or wholesale business facility shall be the same as that accorded to a qualified new retail or wholesale business facility; provided, that the tax credit shall only apply to that incremental portion of the gross income directly attributable to the qualified investment in the expanded retail or wholesale business facility. Upon determining the portion upon which the tax credit shall be applied, the tax credit shall be calculated as follows.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(D) Service business.
(1) Any qualified business taxable under § 38.011 shall be eligible for a decreasing tax credit to be taken over a period of four years, and applied against the taxpayer’s business and occupation tax liability arising under said § 38.011; provided, that a service business that, at the time of the passage of this section, is paying taxes to the city under the service classification for work performed within the city, although its principal place of business is without the city, shall be eligible for a credit upon location of its principal place of business within the city. The first taxable year, for purposes of this tax credit, shall commence on the first day of the taxpayer’s fiscal year immediately succeeding the month in which the qualified investment is first placed in service or use; provided, that for purposes of this tax credit, each subsequent tax year shall commence on the anniversary date of the first taxable year. The total amount of the tax credit taken may not exceed the total amount of the qualified investment.
(2) The tax credit herein authorized shall be calculated as follows.
(a) New service business facility.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(b) Expanded service business facility. The tax credit treatment accorded to the qualified investment in a qualified expanded service business facility shall be the same as that accorded to a qualified new service business facility; provided, that the tax credit shall only apply to that incremental portion of the gross income directly attributable to the qualified investment in the expanded business facility. Upon determining the portion upon which the tax credit shall be applied, the tax credit shall be calculated as follows.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(E) Rental income credit.
(1) Any qualified business taxable under § 38.012 that is a multi-unit commercial building facility constructed and placed in service or use on or after January 1, 2009 shall be eligible for a decreasing tax credit to be taken over a period of four years, and applied against the taxpayer’s business and occupation tax liability arising under said § 38.012. The first taxable year, for purposes of this tax credit, shall commence on the first day of the taxpayer’s fiscal year immediately succeeding the month in which the qualified investment is first placed in service or use: Provided, That for purposes of this tax credit, each subsequent tax year shall commence on the anniversary date of the first taxable year. The total amount of the tax credit taken may not exceed the total amount of the qualified investment.
(2) The tax credit herein authorized shall be calculated as follows.
(a) New multi-unit commercial business facility.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(b) Expanded multi-unit commercial business facility. The tax credit treatment accorded to the qualified investment in a qualified expanded multi-unit commercial business facility shall be the same as that accorded to a qualified new multi-unit commercial business facility; provided, that the tax credit shall only apply to that incremental portion of the gross income directly attributable to the qualified investment in the expanded retail or wholesale business facility. Upon determining the portion upon which the tax credit shall be applied, the tax credit shall be calculated as follows.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(F) Annexed business facility.
(1) Any annexed business facility that is subject to tax under §§ 38.006, 38.007, 38.011 or 38.012 shall be classified as a qualified business facility eligible for a decreasing tax credit to be taken over a period of four years and applied against the taxpayer’s business and occupation tax liability arising under said §§ 38.006, 38.007, 38.011 or 38.012. The first taxable year, for purposes of this tax credit, shall commence on the first day of the taxpayer’s fiscal year immediately succeeding the month in which the business facility is annexed into the city; provided, that for purposes of this tax credit, each subsequent tax year shall commence on the anniversary date of the first taxable year.
(2) The tax credit herein authorized shall be calculated as follows.
(a) Annexed business facility.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 75% |
3rd year | 50% |
4th year | 25% |
5th year | 0% |
(B) Business facility annexed on or after March 1, 2011. Any business facility that is subject to tax under §§ 38.006, 38.007, 38.011 or 38.012 and is annexed into the city on or after March 1, 2011 shall be classified as a qualified business facility eligible for a tax credit to be taken as indicated below and applied against the taxpayer’s business and occupation tax liability arising under said §§ 38.006, 38.007, 38.011 or 38.012. The first taxable year, for purposes of this tax credit, shall commence on the first day of the taxpayer’s fiscal year immediately succeeding the month in which the business facility is annexed into the city; provided, that for purposes of this tax credit, each subsequent tax year shall commence on the anniversary date of the first taxable year. The tax credit herein authorized shall be calculated as follows.
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
Calculation of Tax Credit | |
Year | Percent of B&O Tax Liability Used as a Tax Credit |
1st year | 100% |
2nd year | 100% |
3rd year | 100% |
4th year | 100% |
5th year | 100% |
6th year and every year thereafter | 0% |
(G) To qualify for credit. In order for a business to qualify for this credit, the jobs created shall be located within the city and shall be utilized in the qualified business’ activities in the city that are taxable under §§ 38.006, 38.007, 38.011 or 38.012. In addition, the jobs created shall be retained for the full term of the credit in order for the credit to be applicable; provided, that if the number of qualifying jobs at any time drops below the base year employment level plus five, the credit shall be lost.
(H) Credits for the purchase of existing businesses.
(1) Any qualified manufacturing, retailing, wholesaling, service or multi-unit commercial building facility or business taxable under §§ 38.006, 38.007, 38.011 or 38.012 that is purchased by another person may qualify for the tax credit herein authorized, such credit to be applied against any increase in tax liability after such sale has been consummated; provided, that the credit shall only apply to that incremental portion of gross income which is greater than the average gross income generated by the preceding business over the previous three years.
(2) Any current tax credit that an existing qualified business may have is eligible for transfer to the person purchasing the business; provided, that only the remaining term of the existing credit may be transferred. Any such transfer of an existing tax credit to the person purchasing the business shall make such business ineligible for the credit available under division (H)(1) above.
(I) Does not qualify for credit. A person will not qualify to use the tax credit authorized by this section if at the time of application the person is using a tax credit or tax rebate under the authority of Ordinance 96-05; provided, that this restriction will cease to be effective at the time the person is no longer using a tax credit or tax rebate that is authorized under Ordinance 96-05.
(J) Forfeiture. Any taxpayer authorized to use the tax credit provided in this section that does not pay when required any B&O tax imposed by this subchapter immediately forfeits any future use of the tax credit. Other than notifying the non-complying taxpayer that the taxpayer has forfeited its authorization to use the credit, the City Treasurer is not required to provide a hearing or any other procedure; provided, that if the taxpayer can demonstrate that the required payment of B&O taxes did in fact occur within the time stated in §§ 38.017 and 38.018, the City Treasurer shall authorize the taxpayer’s continued use of the tax credit.
(K) Forms. The City Treasurer shall develop such forms as are necessary to facilitate the application and approval of any business seeking to qualify for this tax credit. The forms at a minimum shall require the business’ name, address, federal employer identification number, the activities of the business, the number of employees of the business, the projected amount of qualified investment, and any other information the City Treasurer determines to be necessary. The City Treasurer shall provide information regarding this tax credit section to any business that requests it. Upon receipt of all of the relevant information, the City Treasurer shall recommend to the City Council that it either approve or disapprove the application. Upon receipt of the Treasurer’s recommendation, the City Council shall vote to either approve or disapprove the application.
(L) City Treasurer examination of books, records and papers. In order to assure the tax credit herein authorized is being properly utilized by each business determined by the city to be qualified to use the tax credit, the City Treasurer may, in person or by duly appointed agent, make examination of the books, records and papers, and audit the accounts of any such business, and may take the evidence, on oath, of any person whom he may believe shall be in possession of any relevant information. As soon as possible after procuring such information as the City Treasurer may be able to obtain that substantiates improper use of the tax credit, he shall proceed to assess the tax due and shall notify the business assessed of the amount of tax due. If the taxpayer shall refuse to pay the amount of tax due, the City Treasurer is authorized to pursue any and all action necessary to collect the amount of tax so assessed.
(M) City Treasurer determinations and denials. The City Treasurer is hereby authorized to make any necessary determinations regarding forfeiture or carryover of the tax credits authorized by this section. Further, the City Treasurer, subject to review by Council, may determine that a particular tax credit application violates the spirit and intention of this section, and deny the credit on that basis.
(Ord. 96-05, passed 12-2-2008; Ord. passed 3-15-2011; Ord. passed 6-7-2011; Ord. passed 8-16-2016)