A "small business" may claim the small business economic opportunity tax credit allowed under W. Va. Code § 11-13Q-10, 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 § 11-13Q-8, 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 June 11, 2002, to mean a business which has annual gross receipts of not more than seven million dollars (including the gross receipts of any affiliates in its controlled group) W. Va. Code § 11?13Q?10(a) (emphasis added).

"New job" was defined by incorporating the definition of "new job" in subsection 11-13Q-3(b)(15).

Dollar amounts stated in the definition of "small business" are subject to annual adjustment for inflation. This adjustment is determined by the Tax Commissioner using the methodology described in subsection 11-13Q-10(a)(1) through (4). The 2004 inflation adjustment factor is based on the percentage by which the Consumer Price Index (CPI) for calendar year 2003 exceeds the CPI for calendar year 2002. 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 § 11-13Q-10(a)(2)). The CPI for 2003 is 182.750 and the CPI for 2002 is 178.675. Based on these figures, the inflation adjustment factor, for purposes of W. Va. Code § 11-13Q-10, for tax years beginning in calendar year 2004, is 1.0228067721.

Accordingly, for tax years beginning during calendar year 2004:

"Small business" means a business which has annual gross receipts of not more than seven million one hundred fifty nine thousand six hundred dollars ($7,159,600). The inflation increase is rounded to the lowest multiple of fifty dollars under W. Va. Code § 11-13Q-10(a)(4)

A summary of the applicable inflation-adjusted Small Business Credit criteria, by calendar year, for tax years beginning in such years, follows:

CRITERIA

YEAR	GROSS SALES
2003 2004	$7,000,000 $7,159.600

 

Notice of this determination will be filed in the West Virginia Register.

 

Issued: January 16, 2004	Rebecca Melton Craig State Tax Commissioner
State Tax Department Taxpayer Services Division P.O. Box 3784 Charleston, WV 25337-3784	Operator on duty 8:30 am - 4:30 pm Monday through Friday Phone: (304) 558-3333 or 1-800-982-8297 Fax: (304) 558-3269 TDD Service/Hearing Impaired 1-800-282-9822