ADMINISTRATIVE NOTICE 9523
SUBJECT: BUSINESS INVESTMENT AND JOBS EXPANSION
TAX CREDIT -- Small Business Investment
and Jobs Expansion Tax Credit (Small Business Credit) -- Notice
of Inflation Adjustments for Tax years Beginning in 1996.
A "small business" may claim the
small business investment and jobs expansion tax credit allowed
under W. Va. Code § 11-13C-7a, when its qualified investment
in real or tangible personal property purchased or leased for
business expansion in this State, as defined in W. Va. Code §
11-13C-6, results in such small business hiring new employees
to fill at least ten (10) "new jobs" it created
in this State as a direct result of the purchase or lease of such
qualified investment property.
The law defined "small business,"
as of March 10, 1990, to mean a "business which has an annual
payroll [as defined in subsection 11-13C-14(e)(6)(A)] of one million
seven hundred thousand dollars or less, and annual gross
receipts [as defined in subsection 11-13C-14(e)(6)(B)] of not
more than five million five hundred thousand dollars[.]"
W. Va. Code § 1113C14(e)(6) (emphasis
added).
"New job" was
defined by incorporating the definition of "new job"
in subsection 11-13C-3(b)(14), with the additional requirement
that the median compensation of such new jobs cannot be less than
eleven thousand dollars per year. W. Va. Code § 11-13C-7a(c).
Dollar amounts stated in these definitions of "small
business" and "new job" are subject
to annual adjustment for inflation. This adjustment is determined
by the Tax Commissioner using the methodology described in subsection
11-13C-7a(1) through (4). The 1996 inflation adjustment factor
is based on the percentage by which the Consumer Price Index (CPI)
for calendar year 1995 exceeds the CPI for calendar year 1987.
For this purpose, the CPI for any calendar year is the average
of the Federal Consumer Price Index for the twelve month period
ending on August 31st of such calendar year. W. Va, Code § 11-13C-7a(A)(2).
The CPI for 1995 is 151.1916666666 and the CPI for 1987 is 111.9833333333.
Based on these figures, the inflation adjustment factor, for
purposes of § 1113C7a, for tax years beginning
in calendar year 1996, is 1.35012650691.
Accordingly, for tax years beginning during calendar
year 1996:
"Small business"
means a business which has an annual payroll of two million, twentyfive
thousand, one hundred fifty dollars ($2,025,150) or less, and
annual gross receipts of not more than six million, seven hundred
fifty thousand, six hundred dollars ($6,750,600); and
"New job"
means a "new job" as defined in W. Va. Code § 1113C3(b)(14):
Provided, That the annualized median compensation of such
new jobs shall not be less than fourteen thousand, eight hundred
fifty dollars ($14,850) per year.
A summary of the applicable inflation-adjusted Small
Business Credit criteria, by calendar year, for tax years begining
in such years, follows:
CRITERIA
MEDIAN
YEAR
PAYROLL GROSS SALES COMPENSATION
1987 $1,500,000 $5,000,000 $11,000
1988 $1,500,000 $5,000,000 $11,000
1989 $1,562,050 $5,206,850 $11,450
1990 $1,700,000* $5,500,000* $12,000
1991 $1,716,300 $5,721,050 $12,550
1992 $1,806,950 $6,023,200 $13,250
1993 $1,862,200 $6,207,350 $13,650
1994 $1,919,100 $6,397,150 $14,050
1995 $1,969,150 $6,563,800 $14,400
1996 $2,025,150 $6,750,600
$14,850
*Amounts established by 1990
W. Va. Acts 176.
Notice of this determination will be filed in the
West Virginia Register.
Issued: November 8, 1995 James H. Paige III
Secretary/Tax Commissioner
For additional information, please call or write:
Department of Tax and Revenue
Taxpayer Services Division
P. O. Drawer 3784
Charleston, WV 25337-3784
Operator on Duty 8:30 a.m. - 4:30 p.m.
Monday through Friday
Telephones: (304) 558-3333 or
1-800-982-8297 (within W. Va. only)
Telecopier: (304) 558-3269
TDD Service for the hearing impaired
1-800-282-9733