West Virginia Code 11-13Q-8 – Qualified investment
(a) General. — The qualified investment in property purchased or leased for business expansion is the applicable percentage of the cost of each property purchased or leased for the purpose of business expansion which is placed in service or use in this state by the taxpayer during the taxable year.
Terms Used In West Virginia Code 11-13Q-8
- business: means any activity which is engaged in by any person in this state which is taxable under article thirteen, twenty-one, twenty-three or twenty-four of this chapter (or any combination of those articles of this chapter). See West Virginia Code 11-13Q-3
- business expansion: means capital investment in a new or expanded business facility in this state. See West Virginia Code 11-13Q-3
- business facility: means any factory, mill, plant, refinery, warehouse, building or complex of buildings located within this state, including the land on which it is located, and all machinery, equipment and other real and personal property located at or within the facility, used in connection with the operation of the facility, in a business that is taxable in this state, and all site preparation and start-up costs of the taxpayer for the business facility which it capitalizes for federal income tax purposes. See West Virginia Code 11-13Q-3
- Commissioner: means the State Tax Commissioner. See West Virginia Code 11-22-1
- compensation: means wages, salaries, commissions and any other form of remuneration paid to employees for personal services. See West Virginia Code 11-13Q-3
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Personal property: All property that is not real property.
- personal property: includes goods, chattels, real and personal, money, credits, investments, and the evidences thereof. See West Virginia Code 2-2-10
- State: when applied to a part of the United States and not restricted by the context, includes the District of Columbia and the several territories, and the words "United States" also include the said district and territories. See West Virginia Code 2-2-10
- taxpayer: means any person subject to any of the taxes imposed by article thirteen, twenty-one, twenty-three or twenty-four of this chapter (or any combination of those articles of this chapter). See West Virginia Code 11-13Q-3
- this state: means the State of West Virginia. See West Virginia Code 11-13Q-3
- Value: means in the case of any document not a gift, the amount of the full actual consideration for the document, paid or to be paid, including the amount of any lien or liens assumed. See West Virginia Code 11-22-1
(b) Applicable percentage. — For the purpose of subsection (a), the applicable percentage of any property is determined under the following table:
If useful life is:The applicable percentage is:
Less than 4 years 0%
4 years or more but less than 6 years 33 1/3%
6 years or more but less than 8 years 66 2/3%
8 years or more 100%
The useful life of any property, for purposes of this section, is determined as of the date the property is first placed in service or use in this state by the taxpayer, determined in accordance with such rules and requirements the Tax Commissioner may prescribe.
(c) Cost. — For purposes of subsection (a), the cost of each property purchased for business expansion is determined under the following rules:
(1) Trade-ins. — Cost does not include the value of property given in trade or exchange for the property purchased for business expansion.
(2) Damaged, destroyed or stolen property. — If property is damaged or destroyed by fire, flood, storm or other casualty, or is stolen, then the cost of replacement property does not include any insurance proceeds received in compensation for the loss.
(3) Rental property. -–
(A) The cost of real property acquired by written lease for a primary term of ten years or longer is one hundred percent of the rent reserved for the primary term of the lease, not to exceed twenty years.
(B) The cost of tangible personal property acquired by written lease for a primary term of:
(i) Four years, or longer, is one third of the rent reserved for the primary term of the lease;
(ii) Six years, or longer, is two thirds of the rent reserved for the primary term of the lease; or
(iii) Eight years, or longer, is one hundred percent of the rent reserved for the primary term of the lease, not to exceed twenty years: Provided, That in no event may rent reserved include rent for any year subsequent to expiration of the book life of the equipment, determined using the straight-line method of depreciation.
(4) Self-constructed property. — In the case of self-constructed property, the cost thereof is the amount properly charged to the capital account for depreciation in accordance with federal income tax law.
(5) Transferred property. — The cost of property used by the taxpayer out-of-state and then brought into this state, is determined based on the remaining useful life of the property at the time it is placed in service or use in this state, and the cost is the original cost of the property to the taxpayer less straight line depreciation allowable for the tax years or portions thereof the taxpayer used the property outside this state. In the case of leased tangible personal property, cost is based on the period remaining in the primary term of the lease after the property is brought into this state for use in a new or expanded business facility of the taxpayer, and is the rent reserved for the remaining period of the primary term of the lease, not to exceed twenty years, or the remaining useful life of the property (determined as aforesaid), whichever is less.