(a) General. -– When used in this article, or in the administration of this article, terms defined in subsection (b) have the meanings ascribed to them by this section, unless a different meaning is clearly required by either the context in which the term is used, or by specific definition, in this article.

(b) Terms defined.

(1) Code or this code. -- The term “code” or "this code" means the Code of West Virginia, 1931, as amended.

(2) Commissioner or Tax Commissioner. -– The terms "commissioner" and "Tax Commissioner" are used interchangeably herein and means the Tax Commissioner of the State of West Virginia, or his or her designee.

(3) Headquarters. – For purposes of this article, the term “headquarters” means the place at which the corporation has its commercial domicile and from which the business of the corporation is primarily conducted.

(4) Eligible small business. – For purposes of this article, the term "eligible small business" means a business, including but not limited to, a sole proprietor, general partnership, limited partnership, limited liability company, professional limited liability company, corporation, or trust, that:

(A) Employs fewer than 25 persons;

(B) Maintains its headquarters or primary place of business in West Virginia; and

(a) Credit allowed. There is allowed to eligible small businesses a credit against the taxes imposed by articles twenty-one and twenty-four of this chapter as provided in this section.

(b) Amount of credit allowable. The credit allowable under this article to an eligible small business shall be up to 50% of the costs incurred by the eligible small business of branding, marketing, and advertising of agricultural or manufactured products produced or manufactured in West Virginia in a given taxable year in which the costs were incurred: Provided, That no amount of annual credit allowable under this article may exceed $1 million in a given tax year; Provided, however, That an eligible small business may accrue the credit under this article for up to five years; Provided further, That if a business under this section is located on a post-mine land site, the tax credit shall double.

(1) The credit shall be applied to reduce the corporation net income tax imposed under §11-24-1 et seq.

(2) If the eligible small business is a limited liability company, an electing small business corporation, as defined in section 1361 of the United States Internal Revenue Code of 1986, or a partnership, any unused tax credit remaining after application of subdivision one of this section is allowed as a tax credit against the taxes imposed by §11-24-1 et seq. on owners of the eligible small business.

(A) Electing small business corporations, as defined in section 1361 of the United States Internal Revenue Code of 1986, limited liability companies, and partnerships shall allocate the tax credit allowed by this article among their members in the same manner as profits and losses are allocated for the applicable taxable year.

(B) No tax credit is allowed under this article against any withholding tax imposed by, or payable under §11-21-1 et seq.

(3) If the eligible small business is a limited liability company, an electing small business corporation, as defined in section 1361 of the United States Internal Revenue Code of 1986, or a partnership, any unused tax credit remaining after application of subdivisions (1) and (2) of this subsection is allowed as a tax credit against the taxes imposed by article twenty-one of this chapter on owners of the eligible taxpayer.

(B) No tax credit is allowed under this article against any withholding tax imposed by, or payable under §11-21-1 et seq.

If the tax credit allowed under this article in any taxable year exceeds the sum of the taxes enumerated in section two of this article for that taxable year, the eligible small business and owners of eligible small businesses described in subsection (b) of section two of this article may apply the excess as a tax credit against those taxes, in the order and manner stated in this section, for succeeding taxable years until the earlier of the following:

(a) The full amount of the excess tax credit is used; or

(b) The expiration of the fourth taxable year after the taxable year in which the costs incurred by the eligible small business of branding, marketing and advertising of agricultural or manufactured products produced or manufactured in West Virginia was made. The tax credit remaining thereafter is forfeited.

(a) The burden of proof is on the taxpayer to establish by clear and convincing evidence that the taxpayer is entitled to the benefits allowed by this article.

(b) Application for tax credit required. --

(1) Application required. -- Notwithstanding any provision of this article to the contrary, no credit is allowed or may be applied under this article until the taxpayer makes written application to the commissioner for allowance of credit as provided in this subsection. An application for credit shall be filed, in the form prescribed by the Tax Commissioner, no later than February 1 following the tax year in which the expenses allowed under this article were incurred.

(2) Allocation in event of excess applications. -- In the event that the aggregate tax applications in a given taxable year exceed the yearly statutory cap provided under subsection (b) of this article, the Tax Commissioner shall allocate the tax credit dollars on a pro rata basis among all those eligible small business taxpayers who have timely made application under subdivision one of this subsection.

§11-13EE-5. Legislative rules.

(a) Beginning on June 1, 2020, and continuing annually on June 1 of 2026, the Tax Commissioner shall submit to the Governor, the President of the Senate and the Speaker of the House of Delegates a tax credit review and accountability report, evaluating the cost effectiveness of the credits allowed under this article during the most recent year for which the information is available. The criteria to be evaluated include, but are not limited to, the following:

(1) The number of taxpayers applying for the credit;

(2) The number of taxpayers claiming the credit;

(3) The amounts of the credits allowed; and

(4) The type of expenses claimed.

§11-13EE-7. Effective date; expiration of credit.