THE DETAILS:

The legislation allows businesses in West Virginia to subtract from their federal adjusted gross income an amount equal to the net income that is directly derived from qualified opportunity zone businesses located in West Virginia. The ultimate effect of this incentive is to completely eliminate state income taxes for West Virginia qualified opportunity zone businesses for up to ten (10) years. This incentive is designed to supplement the Federal Opportunity Zone benefits and further stimulate economic growth and investment in designated low-income communities.

While states across the country are taking steps to enact policies that will make their communities more competitive from a return on investment standpoint, West Virginia’s new law is unique. No other state in the country has proposed and enacted a program that will effectively eliminate all state income taxes on opportunity zones businesses. When paired with the federal program, opportunity zone investments in West Virginia could offer substantial internal rate of return opportunities with the right project. 

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If you have questions about opportunity zone investments, contact one of the authors of this alert.