CHARLESTON, W.Va. -- Legislation intended to attract innovative businesses to the state advanced to the House floor Monday, despite concerns that this might not be the best time to give out potentially more than $90 million in tax credits.
"We can't afford not to attract new business and new people to West Virginia, especially when we have a budget deficit," said Delegate Doug Skaff, D-Kanawha, lead sponsor of the Project Launchpad legislation (HB4343).
"We can't build the budget on our existing structure, so why shouldn't we bring innovation to West Virginia?" he asked.
Under the bill, advanced Monday from the House Finance Committee, the governor could designate up to 10 economically distressed areas as launch pads.
Businesses involved in innovative or emerging technologies that locate within the launch pads could qualify for a number of tax credits, including a new jobs credit of $1,250 a year for each new full-time job with benefits created within the zone.
Qualifying businesses would also be exempt from paying sales taxes, personal income taxes, corporate net and business franchise taxes for up to 16 years, and any personal property and real property directed used in the state-of-the-art technology would be appraised at scrap value, or 5 percent of cost, for tax purposes.
Likewise, owners of certified businesses who live within the same launch pad zone would be exempt from state personal income taxes.
The bill also would create the Promoting West Virginia Employment Act, providing additional tax credits for qualified companies that create at least five new, high-paying jobs with benefits within a two-year period.
Deputy Revenue Secretary John Doyle told committee members the department has reservations about giving tax credits.
"I do think the Department of Revenue has some concerns about it, in that it has potential for tax credits that would eat into the budget," said Doyle, a former delegate.
Currently, the Tomblin administration is trying to close a $146 million revenue gap in the 2014-15 state budget, a gap caused in part by $360 million in tax cuts for this budget year.