HB 5399
Relating to providing a tax credit related to the establishment and operation of biochar manufacturing facilities
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- Passed House of Delegates
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill creates a state tax credit for businesses establishing and operating biochar manufacturing facilities in West Virginia. The credit is tied to the amount of federal carbon oxide sequestration credits these facilities receive, up to a maximum of 10% of their net income tax liability. The bill aims to incentivize investment in this industry by aligning state tax policy with existing federal incentives and supporting the repurposing of existing industrial sites and workforce skills, particularly in coal-impacted communities.
Key provisions
- Provides a state income tax credit to biochar manufacturing facilities.
- The credit is equal to 10% of the amount of a federal carbon oxide sequestration credit.
- Facilities must commence commercial operations after July 1, 2025, and be certified by the Internal Revenue Service.
- The credit can be claimed for up to 12 years after the facility is placed in service.
- Eligible taxpayers must provide documentation verifying federal carbon oxide sequestration credits and biochar production.
- The credit is available to electing small business corporations, partnerships, and limited liability companies.
- Unused portions of the credit can be carried forward, but not carried back before 2026.
- The Tax Commissioner can create rules to administer the credit.
Who is affected
- Biochar manufacturing companies
- West Virginia businesses
- Investors in biochar facilities
- Rural and coal-impacted communities
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