Business, Government Legal News from throughout WVBusinesses locating to WV could get tax exemption

In an effort to revamp the state's business tax climate, the House of Delegates' committee on Energy, Industry & Labor/ Economic Development and Small Business is considering a bill that would provide tax credits for certain businesses.

According to the bill, House Bill 4547, the West Virginia Innovation Free-Trade Tax Credit Act would "encourage economic opportunity, greater capital investment and development of the use in this state of new innovative technologies by enacting this innovation free-trade tax credit." Businesses who bring 10 to 15 jobs and an investment of $5 million to $10 million would earn a five year exemption from the business franchise and corporate net taxes, among others. A business bringing more than 15 jobs and an investment of at least $10 million would be exempt from business and occupation, corporate net and personal income taxes for 10 years. The business franchise and corporate net taxes are being phased out in accordance with previously-passed legislation.

Mike Basile, a partner with Spilman Thomas & Battle PLLC and chairman of the Charleston Chamber of Commerce, said the bill aims to attract business to the Mountain State and was patterned after legislation in other states.

"What we tired to do is take a look at some of the most aggressive legislation our there," he said. "This legislation was patterned after legislation in place in Colorado, California and Massachusetts."

Basile went on to say that a federal statute empowers "foreign trade zones" that create tax rebates for businesses to import products, improve them and then re-export them as if they were residing in tax-free haven. He said Toyota is one of these foreign trade zones.

"It is that cocktail of state legislation out there with that federal overlay creating a tax leave where folks can add value," he said.

But the United States isn't the only government that offers tax breaks for companies. According to Allan Tweedle, the CEO of Composite Transport Technologies, Canada is also very competitive and aggressive in attracting companies. Although Tweedle, a Charleston resident, wants to locate his business in West Virginia, he said Ontario is offering "very attractive incentives" that are hard to ignore.

"We find very attractive incentives from the government, as well as the investment community," he said. "The Milken Institute out of California in its annual report again this year cites Canada as being, for the second year, as being the single most attractive country in the western world in which to invest and locate for entrepreneurs like us."

Tweedle's company, which has developed an application of lightweight composite materials for the aviation industry, pays about $65,000 annually plus health benefits and could employ about 300 people. But part of the problem is finding an investment stream.

"So much of the investment community in this turmoil over the last couple of years are looking for a quick buck on a turnaround like Google or Facebook. We're not that. We take time in engineering and research development and testing to get where we are."

Tweedle said if the bill is passed, West Virginia would become competitive and be able to attract businesses, such as his, that bring high-paying jobs. Delegate Barbara Fleischauer, D-Monongalia, said the payroll and benefits a company would provide would be considered in determining whether that company gets a tax credit.

The bill has moved out of the committee and will be reported to the Finance Committee before going to the full House.