West Virginia Business Taxes at a Glance
West Virginia has cut its personal income tax significantly in recent years, with more reductions possible if revenue goals are met. For businesses, the most distinctive taxes are local: many cities charge a business and occupation tax on gross receipts and a weekly fee on people who work there. The energy and timber industries also pay severance taxes. BOMCAS helps West Virginia individuals and businesses understand these rules and file correctly.
Personal Income Tax
West Virginia uses graduated brackets: residents report all income, and nonresidents report income sourced to West Virginia. Legislation in 2023 cut rates substantially and created a trigger process for further reductions when revenue exceeds certain levels. Rates have been reduced again since then. West Virginia also provides a growing exclusion for Social Security benefits and other retirement income.
West Virginia has reciprocal agreements with Kentucky, Maryland, Ohio, Pennsylvania, and Virginia for wages. Residents of those states who work in West Virginia generally pay tax only to their home state on wages. We prepare West Virginia returns, apply retirement exclusions, and handle reciprocity and part-year filings.
Municipal Business and Occupation Taxes
West Virginia does not have a state business and occupation tax for most businesses, but many cities do. A city B&O tax is based on gross receipts from business activity in the city, at rates that differ by type of business, such as retail, contracting, services, or manufacturing. It is filed with the city, not the state, and is due regardless of profit.
Contractors working on projects in several cities may owe B&O tax in each one. We help businesses register with each city, classify their activities, track receipts by city, and file returns.
City Service and User Fees
Several West Virginia cities charge a flat weekly fee on people who work within city limits, often called a city service fee or user fee. Employers usually withhold it from wages and remit it to the city. Some cities also charge fire or police service fees on property. These amounts are small per worker but add up for larger employers, and they need to be set up in payroll correctly. We include them in payroll setup.
Severance Taxes
West Virginia imposes severance taxes on the privilege of extracting natural resources, including coal, natural gas, oil, and timber. Rates and rules depend on the resource. Producers file with the Tax Division, and royalty owners see these taxes on their statements.
For small producers, royalty owners, and service companies, we provide:
- Bookkeeping that tracks production revenue and taxes by property
- Reconciliation of operator statements to deposits
- Depletion and depreciation schedules for federal returns
- Fixed asset records for property tax
Corporate and Pass-Through Taxes
Corporations doing business in West Virginia pay corporate net income tax on apportioned income. Partnerships and S corporations file West Virginia returns and generally withhold for nonresident owners, and West Virginia offers an elective pass-through entity tax with credits for owners. We prepare entity returns and evaluate the election.
Sales and Use Tax
West Virginia has a statewide sales and use tax, and many municipalities add a municipal sales and use tax administered by the state Tax Division. Some services are taxable in West Virginia. Businesses need a business registration certificate and file regularly. We prepare returns, track municipal taxes by location, and review purchases for use tax.
Property Tax and the Vehicle Credit
West Virginia counties tax real and personal property, including vehicles and business equipment. Since 2023, individuals and businesses can claim a state income tax credit for personal property tax paid on vehicles, and certain small businesses can claim credits for property tax on equipment. These credits require accurate records of property tax paid. We keep these records and claim credits on the returns.
Social Security Phase-Out
West Virginia has been phasing out its tax on Social Security benefits, with the exemption fully in place for 2026. Retirees who were previously limited by income now exclude benefits regardless of income. Pensions and other retirement income follow separate rules, including exclusions for military and some public retirement income. We apply the rules for the correct year.
Payroll and City Service Fees
West Virginia employers withhold state income tax, municipal fees where they apply, and report unemployment insurance to WorkForce West Virginia. Workers' compensation is purchased from private insurers. We run payroll, file quarterly reports, and handle reciprocity forms for employees from neighboring states.
Coal, Natural Gas, Chemicals, Health Care, and Tourism
- Coal, natural gas, and energy services: severance tax, joint interest accounting, and equipment
- Timber and wood products: severance tax and inventory
- Health care: practice accounting and staff in several cities
- Construction: municipal B&O tax on projects in different cities
- Tourism and outdoor recreation: seasonal payroll and hotel occupancy taxes
Books Organized by City and Well
West Virginia books should track gross receipts by city for B&O tax, employees by work location for city fees, and production by property for severance tax. We set up the chart of accounts and monthly close to provide these figures.
Working With BOMCAS in West Virginia
Royalty owners and producers filing severance tax, businesses paying municipal B&O tax, and vehicle owners claiming the property tax credit can contact BOMCAS for a remote review. Local pages for West Virginia cities and services are planned under this section. Return to the BOMCAS home page or see our United States services. Use this page as general background, not as advice for your own situation.
Talk to BOMCAS About Your West Virginia Taxes
Have a question about your West Virginia filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.