West Virginia — Corporate Income / Franchise Tax

West Virginia imposes a corporation net income tax on every domestic or foreign corporation that enjoys the benefits and protections of the government and laws of West Virginia or derives income from property, activity, or other sources in West Virginia.

Source: W. Va. Code § 11-24-4

Source: West Virginia Tax Division – Corporate Income Tax

A domestic corporation is any corporation organized under the laws of West Virginia. Every other corporation is a foreign corporation.

Source: W. Va. Code § 11-24-3a

For purposes of the tax, engaging in business or doing business means any corporation that enjoys the benefits and protection of government and laws in the state. West Virginia's nexus standard is broad; physical presence is not required. In Tax Commissioner of the State of West Virginia v. MBNA America Bank, N.A., 220 W. Va. 163, 640 S.E.2d 226 (W. Va. 2006), the West Virginia Supreme Court of Appeals upheld a "significant economic presence" test for determining whether a corporation has sufficient connection with the state to be subject to corporate income tax, even when the corporation had no employees or other tangible ties to the state. The court held that the physical presence standard of Quill Corp. v. North Dakota applies only to sales and use taxes, not to income or franchise taxes.

Source: Tax Commissioner of the State of West Virginia v. MBNA America Bank, N.A., 220 W. Va. 163, 640 S.E.2d 226 (W. Va. 2006) Source: W. Va. Code § 11-24-3a(11)

## Exemptions

Certain entities are exempt from the corporation net income tax:

• Corporations exempt from federal income tax under the Internal Revenue Code (except for unrelated business taxable income under IRC § 512)
• S corporations that have made a valid election under IRC § 1362(a) (though these entities must file an information return)
• Certain trusts established under 29 U.S.C. § 186 prior to January 1, 1967

Source: W. Va. Code § 11-24-5

Tax-exempt organizations with unrelated business income subject to federal tax under IRC § 512 must pay West Virginia corporation net income tax on that income.

Source: CIT-120 Instructions 2023

## Combined Reporting

For tax years beginning on or after January 1, 2009, any taxpayer engaged in a unitary business with one or more other corporations must file a combined report that includes the income, allocation, and apportionment of income of all corporations that are members of the unitary business. Members may elect to file either separate returns with a combined report or a group combined return with a designated surety corporation.

Source: W. Va. Code § 11-24-13a(j)

Source: West Virginia Tax Division – Corporate Income Tax

All combined reporting corporate income tax returns must be filed electronically using an approved software vendor.

Source: West Virginia Tax Division – Corporate Income Tax

West Virginia imposes a corporation net income tax at a flat rate on the West Virginia taxable income of every domestic or foreign corporation engaging in business in the state, except corporations exempt under W. Va. Code § 11-24-5. The statutory rate has changed as follows:

• Prior to January 1, 2026: The tax rate was 6.5 percent for taxable periods beginning on or after January 1, 2014, up to December 31, 2025.
• On and after January 1, 2026: The tax rate is reduced to 3.25 percent. This reduction was enacted by 2025 Regular Session legislation amending W. Va. Code § 11-24-4, effective for taxable years beginning on or after January 1, 2026.

The 6.5% rate was in effect for more than a decade prior to this statutory change. Taxpayers should consult Section 11-24-4 for precise applicability based on their tax year.

Source: W. Va. Code § 11-24-4 Source: TSD 100 Business Taxes, West Virginia Tax Division

For tax years beginning on or after January 1, 2026, West Virginia defines a corporation's federal taxable income for purposes of the corporation net income tax as the amount determined under the Internal Revenue Code (IRC) as amended through December 31, 2025, and including any amendments made in 2025 that are retroactively applicable. This new conformity was enacted by Senate Bill 393, passed during the 2026 Regular Session, and changes the state's prior IRC conformity date (which had previously been December 31, 2022).

This means West Virginia taxable income for corporate net income tax purposes starts with the federal taxable income as computed under the IRC as amended through December 31, 2025, subject to specific state additions and subtractions listed in W. Va. Code § 11-24-6. These adjustments—such as the addition of interest on non-West Virginia state and local bonds or subtraction of U.S. government bond interest—remain applicable. For prior years (before the conformity update), the starting point was the IRC as amended through December 31, 2022.

This change may require taxpayers to re-compute prior year amounts if accounting methods retroactively allowed by federal law affect earlier periods. Practitioners should verify the relevant conformity date for each specific tax year from the statutory text and the West Virginia Tax Division's guidance, as federal adoption or effective date language sometimes delays applicability for particular IRC provisions.

Source: W. Va. Code § 11-24-3 (as amended by 2026 SB 393) Source: W. Va. Code § 11-24-6 Source: West Virginia Tax Division – Business Tax Forms and Publications

For tax years beginning on or after January 1, 2022, West Virginia apportions the business income of multistate corporations using a single sales factor. The sales factor is a fraction: the numerator includes gross receipts from West Virginia, and the denominator includes total gross receipts everywhere. West Virginia uses market-based sourcing for sales of services and certain intangible property.

Prior apportionment formula (pre-2022): Prior to tax year 2022, West Virginia employed a three-factor apportionment formula—property, payroll, and double-weighted sales—commonly described by official sources as a 'three-factor formula with double-weighted sales.' Mathematically, the apportionment factor is calculated as the sum of the property factor, the payroll factor, and two times the sales factor, with a denominator of four. While this produces four components numerically, the statute and administrative publications refer to it as a three-factor formula with double-weighted sales, not a four-factor formula.

Source: W. Va. Code § 11-24-7 Source: TSD 100 Business Taxes, West Virginia Tax Division

Not yet human confirmed.

West Virginia corporate net income tax returns are due on the 15th day of the fourth month following the close of the corporation's taxable year. For calendar-year corporations, this means April 15. For fiscal-year filers, the return is due by the 15th day of the fourth month after the fiscal year ends.

## Automatic Extension with Federal Extension

West Virginia automatically grants a six-month extension of time to file if the corporation has obtained a valid federal extension from the IRS (Form 7004). No separate West Virginia extension application is required when a federal extension has been filed. The six-month extension moves the deadline to October 15 for calendar-year filers.

## State-Only Extension

If a corporation has not filed a federal extension—or wishes to file a West Virginia-only extension—it may submit Form CIT-120EXT (West Virginia Extension Corporation Net Income Tax Return) on or before the original due date of the return. The Tax Division may grant a written extension request if submitted by the original deadline.

## Payment Obligation

An extension of time to file is not an extension of time to pay. Any tax due must be paid by the original due date (the 15th day of the fourth month after year-end) to avoid interest and penalties. A corporation with an extension can remit payment by filing Form CIT-120EXT with the payment, or by making an electronic payment through the Tax Division's online system.

## Electronic Filing Mandate

Corporations that made payments totaling $50,000 or more during the most recent fiscal year are required to file and pay West Virginia corporation net income tax electronically. All combined reporting returns must be filed electronically using an approved software vendor.

Source: W. Va. Code § 11-24-14

Source: CIT-120 Instructions, West Virginia Tax Division

Source: West Virginia Tax Division – Corporate Income Tax

Every corporation subject to West Virginia corporation net income tax must make estimated tax payments for the taxable year if its West Virginia taxable income can reasonably be expected to exceed $10,000—which equals a tax liability after tax credits of more than $650.

Source: W. Va. Code § 11-24-16

Source: CIT-120U Underpayment of Estimated Tax Worksheet, West Virginia Tax Division (2024)

## Payment Schedule and Installment Requirements

Estimated tax payments are due in four equal installments on the 15th day of the fourth, sixth, ninth, and twelfth months of the tax year. For a calendar-year corporation, these installments are due April 15, June 15, September 15, and December 15.

A taxpayer is required to remit, in equal installments on these dates, at least ninety percent (90%) of the tax due for the filing period. Corporations may elect to pay any installment of estimated tax prior to the date prescribed for its payment.

Source: W. Va. Code § 11-24-16

Source: CIT-120U Underpayment of Estimated Tax Worksheet

## Underpayment Penalty

If a corporation fails to timely remit any required estimated tax payment or remits less than the required amount, an addition to tax (penalty) is imposed under W. Va. Code § 11-10-18a. The penalty is figured separately for each installment due date; a corporation may owe the penalty for an earlier installment even if it paid enough tax later to make up the underpayment.

The penalty is calculated by applying the interest rate established under W. Va. Code § 11-10-17 or § 11-10-17a—whichever is appropriate for the taxable year—to the amount of the underpayment for the period of the underpayment. The West Virginia Tax Commissioner sets this rate at six-month intervals, and the rate varies over time.

Source: W. Va. Code § 11-10-18a

Source: CIT-120U Underpayment of Estimated Tax Worksheet

## Safe Harbors and Exceptions

A corporation will not be subject to underpayment additions to tax if the total amount of estimated tax paid on or before the last installment date equals or exceeds one hundred percent (100%) of the tax shown on the taxpayer's return for the preceding taxable year, provided:

• A return showing a liability for tax was filed by the taxpayer for the preceding taxable year;
• The preceding taxable year was a taxable year of twelve months; and
• The prior-year return showed a West Virginia tax liability greater than zero.

This is known as the prior-year safe harbor. If the prior year did not meet all three conditions—for example, if it was a short tax year, or if no West Virginia liability was shown—the safe harbor does not apply.

Source: W. Va. Code § 11-10-18a

Source: CIT-120U Underpayment of Estimated Tax Worksheet

## Annualized Income Installment Method

Corporations with income that varies significantly during the year may use the annualized income installment method to reduce or eliminate the required amount of one or more installments. Under this method, the required installment is based on the taxpayer's actual annualized income computed through the end of each installment period, rather than on the prior year's tax or a flat estimate of current-year tax. If the annualized income installment is less than the amount otherwise required under the 90% current-year or 100% prior-year tests, the taxpayer may use the lower annualized amount for that installment.

To claim the benefit of the annualized income installment method, the taxpayer must complete the annualized installment worksheet sections of Form CIT-120U.

Source: W. Va. Code § 11-10-18a

Source: CIT-120U Underpayment of Estimated Tax Worksheet

For tax years beginning before January 1, 2022, West Virginia applied a 'throw-out rule' to its corporate net income tax sales factor: sales of tangible personal property delivered to a state where the taxpayer was not subject to income tax (e.g., due to Public Law 86-272 or lack of nexus) were excluded from both the numerator and the denominator of the sales factor. This effectively prevented untaxed out-of-state receipts from diluting a taxpayer’s West Virginia sales factor, often increasing the portion of income apportioned to West Virginia.

Effective for tax years beginning on or after January 1, 2022, West Virginia eliminated the throw-out rule as part of its shift to a single sales factor apportionment method. Under W. Va. Code § 11-24-7, all sales of tangible personal property are included in the denominator of the sales factor, regardless of whether the destination state subjects the taxpayer to tax. If the taxpayer is not taxable in the destination state, those receipts are not included in the West Virginia numerator but are still counted in the denominator.

Transition guidance for fiscal years that straddle January 1, 2022, is provided in W. Va. Code R. § 110-24-6a, which permits short-period returns or allocation of sales to the appropriate period according to the rule in effect when the sale was made.

Source: W. Va. Code § 11-24-7

West Virginia recognizes the federal protections of Public Law 86-272 for corporations whose only in-state activity is solicitation of orders for sales of tangible personal property. As codified in 15 U.S.C. § 381 et seq. (P.L. 86-272), states—including West Virginia—are preempted from imposing a net income tax when the corporation’s sole activity in the state is solicitation, provided that orders are sent outside the state for approval and shipment or delivery originates from outside the state.

Scope of Protection:

• The protection applies only when in-state activity is strictly limited to solicitation of sales of tangible personal property. Any activity in West Virginia beyond solicitation—including accepting orders, maintaining an office, having inventory or a warehouse, providing post-sale service, installation, collections, or engaging in business operations—exceeds the federal protection.
• West Virginia’s Tax Expenditure Report includes “corporations whose only activity is solicitation of sales (Public Law 86-272)” among those entities exempt from West Virginia corporation net income tax. This confirms the state’s recognition of the federal safe harbor for solicitation-only activity.

Exceeding 86-272—Loss of Protection:

• If a corporation performs any non-solicitation business activities in West Virginia—such as fulfillment, order approval, carrying inventory, installation, customer service, warranty work, or other operational tasks—the protection of P.L. 86-272 is lost and the entity may be subject to West Virginia corporation net income tax on its apportioned income.

Limitations:

• The statute and West Virginia’s published guidance do not enumerate every excluded activity. The determination of what activities constitute “only solicitation” follows the federal framework and interpretations. Borderline cases (e.g., providing samples, recruiting employees, attending trade shows) require careful analysis of federal guidance and, where available, state-specific regulatory or case law exposition. Practitioners should review current West Virginia Department of Revenue guidance if engaging in business activities near the line between protected solicitation and unprotected business operations.

Source: 15 U.S.C. § 381 Source: West Virginia Corporation Net & Personal Income Tax Expenditure Report (January 2023), p. 7

Not yet human confirmed.

West Virginia law distinguishes sharply between business (apportionable) income and nonbusiness (allocable) income for corporations. This classification determines whether income is divided by formula or assigned directly to a state.

Statutory distinctions:

• Business income is income arising from transactions in the regular course of a taxpayer’s trade or business, or from property integral to the business’s operation. All other income is classified as nonbusiness income (W. Va. Code § 11-24-7(d)).
• The single sales factor apportionment for business income is effective for tax years beginning on or after January 1, 2022; before that, a three-factor formula applied. The distinction between business and nonbusiness income applies throughout.

Rules for allocating nonbusiness (nonapportionable) income:

• Net rents and royalties from real property: Allocated to West Virginia if the property is located in the state.
• Net rents and royalties from tangible personal property: Allocated to West Virginia if the property is used in the state. If used both in and outside West Virginia, allocation is in proportion to use (W. Va. Code R. § 110-24-6.9).
• Capital gains and losses from real/tangible personal property: Allocated to the state where the property is located at the time of sale or disposition.
• Capital gains and losses from intangible personal property, and interest & dividends: Allocated to the taxpayer’s "commercial domicile" (defined as the principal place where the business is managed and directed; see W. Va. Code R. § 110-24-2.7).
• Patent and copyright royalties: Allocated to the state where the property is used, or to commercial domicile if the location cannot be determined (W. Va. Code § 11-24-7(e)).

Regulatory guidance: West Virginia’s regulation clarifies that “commercial domicile” means the principal place of management and direction. For property or royalties used both in and out of West Virginia, the regulation provides that income should be allocated proportionally by use (e.g., miles driven for vehicles).

Flow-through entity treatment: By statute, the allocation and apportionment rules for corporations also apply to flow-through entities unless specifically excepted (W. Va. Code § 11-21-37a(d)). TSD-392 offers additional administrative guidance.

Example: If a corporation’s commercial domicile is Charleston, WV, and it receives $10,000 in dividends from out-of-state investments, that income is allocated entirely to West Virginia.

Source: W. Va. Code § 11-24-7(d)-(e) Source: West Virginia Code R. § 110-24-6 Source: W. Va. Code § 11-21-37a(d) Source: TSD-392 West Virginia Apportionment and Allocation

West Virginia no longer imposes a corporate franchise tax, sometimes known in-state as the "Business Franchise Tax." The tax was fully repealed for tax years beginning on or after January 1, 2015.

Repeal Effective Date: The Business Franchise Tax applied to corporations and certain other business entities for taxable years beginning from July 1, 1987, through December 31, 2014. Under the statutory repeal at W. Va. Code § 11-23-6(c), no franchise tax is due for tax years beginning on or after January 1, 2015. The corporate net income tax continues to apply separate and apart from this repeal.

Filing and Audit of Legacy Tax Years: The West Virginia State Tax Department recognized the formal end of the franchise tax, and as of January 1, 2015, no franchise tax returns are required for subsequent tax years. However, legacy obligations (delinquent filings, audits, or assessments) for franchise tax years prior to repeal may persist subject to standard administrative and statutory statutes of limitation.

The statute and authoritative state guidance are both silent regarding any special look-back or amnesty for old franchise tax liabilities. Standard administrative rules and audit rights for closed tax periods would apply. Practitioners with clients who did business in West Virginia before 2015 should confirm that all business franchise tax filings and payments for those years are complete and audit statutes satisfied.

Authority:

• W. Va. Code § 11-23-6(c): “No tax is due under this article for all tax years beginning on or after January 1, 2015.”
• West Virginia Tax Department, Corporation Franchise Tax Overview: documents franchise tax history, confirms last tax year is 2014.

Source: W. Va. Code § 11-23-6 Source: West Virginia Tax Department – Corporation Franchise Tax Overview

Not yet human confirmed.

West Virginia offers a suite of notable corporate income tax credits—such as Business Investment and Jobs Expansion credits (e.g., headquarters relocation), Manufacturing Investment Credit, Post‑Coal Mine Site Business Credit, Economic Opportunity Credit, Film Industry Investment Credit, and more. Practitioners report these credits using Form CIT‑120TC (Summary of Corporation Net Income Tax Credits), and the most comprehensive, authoritative listing appears in the state’s biennial Tax Expenditure Study under Corporation Net Income Tax credits. These credits are authorized by a number of statutes in Chapter 11, especially Articles 13C and 13D of the West Virginia Code.

Key statutory credits (not an exhaustive list):

• Business Investment and Jobs Expansion Credit (W. Va. Code § 11-13C): Includes a relocation credit for moving corporate headquarters into West Virginia (§ 11-13C-4a), broad eligibility for new investment by qualified companies (application rules at § 11-13C-5), and related provisions.
• Manufacturing Investment Credit (W. Va. Code § 11-13S): For qualified manufacturing property placed in service in the state.
• Post-Coal Mine Site Business Credit (W. Va. Code § 11-13II): Incentivizes new business activity on former coal mining sites.
• Film Industry Investment Credit (W. Va. Code § 11-13EE): For qualified West Virginia film production expenditures.
• Economic Opportunity Credit (W. Va. Code § 11-13Q): For qualified creation of new jobs.
• Historic Rehabilitation Credit (W. Va. Code § 11-24-23a): For eligible rehabilitation expenses on certified historic structures.
• Jumpstart Savings Program Credit (W. Va. Code § 18-30A-15): For business contributions to eligible employee savings accounts.

Not all credits are available to every taxpayer or in every year: credits may sunset, be amended, or include company/industry-specific eligibility. Most contain caps, carryforward, application, and job maintenance requirements. See the CIT-120TC instructions and the Tax Expenditure Study for detailed program summaries and credit mechanics.

Where to find an official list or summary:

• Form CIT-120TC and its instructions (available on the WV Tax Division corporate income tax site) list the credits in current use and explain reporting mechanics.
• The West Virginia Tax Expenditure Study (latest edition, e.g. January 2026) includes a summary table and description of all corporation net income tax credits, their uptake in recent years, and statutory references.
• The official codified text of each credit (with all requirements and procedural details) is in Chapter 11 of the West Virginia Code; Articles 13C, 13D, 13S, 13II, 13EE, 13Q, 24 (e.g., https://code.wvlegislature.gov/11-13C/).

Source: West Virginia Form CIT-120TC and instructions Source: Tax Expenditure Study — Corporation Net Income Tax Credits, January 2026 Source: W. Va. Code § 11-13C (Business Investment Credits) Source: W. Va. Code § 11-13S (Manufacturing Investment Credit) Source: W. Va. Code § 11-13II (Post-Coal Mine Site Credit) Source: W. Va. Code § 11-13EE (Film Industry Investment Credit) Source: W. Va. Code § 11-13Q (Economic Opportunity Credit) Source: W. Va. Code § 11-24-23a (Historic Rehabilitation Credit) Source: W. Va. Code § 18-30A-15 (Jumpstart Savings Credit)

Not yet human confirmed.