This week saw the introduction of a number of new bills that are relevant or potentially helpful to West Virginia’s community development, and of particular interest to us were two bills aimed at helping small businesses.
Small Business Tax Credits and Regulatory Flexibility
HB 4437, sponsored by Delegate Kevin Hicks of Wayne County, would provide tax credits to small businesses that are created and operating entirely within West Virginia.
Under this law, any West Virginia business that has less than 100 employees would be eligible to take up to $2,500 in tax credits out of its business franchise and corporate income taxes, and potentially out of the business owner’s personal property taxes, for each employee that is with the business for longer than one year.
Importantly, it prohibits businesses from firing employees after one year to hire new employees to get additional tax credits. (We were impressed by the sponsors’ forethought on this clever – and destructive – potential effort to get as many tax credits as possible.)
The credits are only available from 2016 through 2024, but there is no upper limit on how many credits in total are available – at least not yet.
We’ve heard enough about the budget crisis to know that we should be skeptical about this bill’s ability to pass (as we are with any tax credit bill this year).
But, since the House just passed a bill this week that would provide a $100 tax credit to anyone who obtains a concealed weapon permit (HB 4145), we know that some tax credits can get through this year. It will be really interesting to see what gets kept, cut, and created once the dust settles on March 13.
We’re also wondering about the language of “operating entire within West Virginia.” We know that many small businesses do a mixture of physical and online sales in order to be financially viable. Would online sales to purchasers outside of West Virginia (but sent from stores or warehouses within the state) be considered operating outside of the state, and disqualify a business from getting the tax credits?
Meanwhile, In the Senate…
Small businesses got love in both chambers this week. The Senate also introduced a small business support bill, SB 541.
This bill attempts to reduce some of the regulatory burdens that small businesses face in operating in West Virginia.
We’ve heard anecdotally from some of our small business friends that it is hard to open and maintain a small business in West Virginia. There’s quite a few hoops you have to jump through. This bill seeks to reduce some of those burdens – and to place the burden on agencies to demonstrate clearly why any additional regulations on small businesses are required.
SB 541, the “Regulatory Flexibility Act” would require agencies to show the potential impact of the regulations on small businesses, and actively identify ways to minimize the impact of the new regulation on small businesses.
Additionally, the agencies would have to review all their regulations every five years to make sure that all rules are still necessary and that none are overly burdensome on small businesses.
The bill sponsor, Senator Ryan Ferns of Wheeling, is a small business owner himself and this is one of two bills he has sponsored seeking to reduce regulatory burdens on small businesses.
SB 541 is single referenced to Senate Government Organization. We’ll keep an eye on whether it moves before the deadline for bills to be out of committee on February 28.