H. B. 2147


(By Delegate R. M. Thompson)

[Introduced February 14, 2001 ; referred to the

Committee on Industry and Labor, Economic Development and Small Business then Finance.]




A BILL to amend chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article thirteen-p, relating to taxation; and providing a small business tax credit equal to any guaranty fee paid to the small business administration to obtain small business administration financing, or two percent of the loan from any other lending institution for a new business in this state.

Be it enacted by the Legislature of West Virginia:

That chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article thirteen-p, to read as follows:

ARTICLE 13P. SMALL BUSINESS TAX CREDIT.

§11-13P-1. Short title.

This article may be cited as the "West Virginia Small Business Tax Credit Act."

§11-13P-2. Small business tax credit.

For the purposes of this article, a "small business" is any corporation, partnership, sole proprietorship or other business entity which has an annual payroll of one million five thousand dollars or less, or annual gross sales of not more than five million dollars. Beginning the first day of January, two thousand two, and each January thereafter, the tax commissioner shall prescribe amounts which shall apply, in place of the amounts stated in this section, during that calendar year. These amounts shall be prescribed by increasing the amount of each by the cost-of-living adjustment for that calendar year.

Each small business formed under the laws of the state of West Virginia and operating within the state is entitled to claim as a credit against the tax imposed by this chapter for businesses any amount paid to the United States small business administration (SBA) as a guaranty fee pursuant to the obtaining of SBA guaranteed financing. This credit shall be applicable only to the tax year in which the guaranty fee was paid. The credit may not reduce the tax below the minimum tax where a minimum tax is provided under this
chapter and may only be claimed by the small business which is the primary obligor in the financing transaction and which actually paid the guaranty fee.
In the alternative, a small business is entitled to claim as a one time credit against the tax imposed by this chapter for businesses two percent of the total loan received by the small business from any lending or banking or financial institution located in this state that is authorized by law to make such business loans, if the proceeds from the loan are used solely for the new business.


NOTE: The purpose of this bill is to give small businesses a tax credit equal to any guaranty fee they pay to the Small Business Administration in order to obtain SBA financing or, as an alternative, a tax credit equal to 2% of any loan received by the small business from any other financial institution authorized to make business loans in this state. This is a one time credit.

This article is new; therefore, strike-throughs and underscoring have been omitted.