W. Va. Code R. § 110-13C-3

Current through Register Vol. XLI, No. 52, December 27, 2024

Section 110-13C-3 - Definitions

As used in these regulations and unless the context clearly requires a different meaning, the following terms shall have the meaning ascribed herein, and shall apply in the singular or in the plural.

3.1. Business. - The term "business" means any activity taxable under W. Va. Code ''11-12A et seq. or 13 et seq. (or both), which is engaged in by any person in this State: provided, That on and after the July 1, 1987, the term "business" means any activity taxable under article 13, 13-a, 13-b, 21, 23 and 24 of this chapter (or any one or combination of such articles of this chapter).

3.2. Business expansion. - The term "business expansion" means capital investment in a new or expanded business facility in this State.

3.3. Business facility. - The term "business facility" means any factory, mining operation, mill, plant, refinery, warehouse, building or complex of buildings located within this State, including the land on which it is located, and all machinery, equipment and other real and personal property located at or within such facility, used in connection with the operation of such facility, in a business that is taxable in this State, and all site preparation and start-up costs of the taxpayer for the business facility which it capitalizes for federal income tax purposes.

3.3.1. "Mining operation" means the place at which a person extracts ores or minerals from the ground. It includes both surface and underground mining operations.

3.3.2. "Surface mine" means the surface of land upon which activities are conducted which disturb the natural surface of the land and result in the production of ores or minerals.

3.3.3. "Underground mine" means the surface effects associated with the shafts, slopes, lifts or inclines connected with excavations penetrating seams or strata of minerals, and the equipment connected therewith which contribute to the mining, preparation or handling or ores or minerals.

3.4. Commissioner or Tax Commissioner. - The terms "Commissioner" and "Tax Commissioner" are used interchangeably herein and mean the Tax Commissioner of the State of West Virginia, or his delegate.

3.5. Compensation. - The term "compensation" means wages, salaries, commissions and any other form of remuneration paid to employees for personal services.

3.6. Construction contract. - The term "construction contract" means any contract for the building, construction, reconstruction or rehabilitation of, or the installation of any integral components to, or improvements of, a new or existing business facility.

3.7. Controlled group. - The term "controlled group" means one or more chains of corporations connected through stock ownership with a common parent corporation if stock possessing at least fifty percent (50%) of the voting power of all classes of stock of each of the corporations is owned directly or indirectly by one (1) or more of the corporations; and the common parent owns directly stock possessing at least fifty percent (50%) of the voting power of all classes of stock of at least one (1) of the other corporations.

3.8. Corporation. - The term "corporation" means any corporation, joint-stock company or association, and any business conducted by a trustee or trustees wherein interest or ownership is evidenced by a certificate of interest or ownership or similar written instrument.

3.9. Delegate. - The term "delegate" in the phrase "or his delegate," when used in reference to the Tax Commissioner, means any officer or employee of the Department of Tax and Revenue duly authorized by the Tax Commissioner directly, or indirectly by one or more redelegations of authority, to perform the functions mentioned or described in W. Va. Code '11-13C et seq.

3.10. Eligible taxpayer. - The term "eligible taxpayer" means any person subject to the taxes imposed by W. Va. Code '11-12a et seq. or 13 et seq. (or both) who makes qualified investment in a new or expanded business facility located in this State that results in the creation of at least fifty (50) new jobs: provided, That on and after July 1, 1987, the phrase "eligible taxpayer" means any person subject to the taxes imposed by W. Va. Code '11-13, 13-a, 13-b, 21, 23 and 24 et seq. (or any one (1) or combination of such articles of this chapter). "Eligible taxpayer" shall also include an affiliated group of taxpayers if such group elects to file a consolidated corporation net income tax return under W. Va. Code, '11-24. et seq.

3.11. Expanded facility. - The term "expanded facility" means any business facility (other than a new or replacement business facility) resulting from the acquisition, construction, reconstruction, installation or erection of improvements or additions to existing property if such improvements or additions are purchased on or after March 1, 1985, but only to the extent of the taxpayer's qualified investment in such improvements or additions.

3.12. Includes and including. - The terms "includes" and "including," when used in a definition contained in W. Va. Code '11-13C et seq. or these regulations, shall not be deemed to exclude other things otherwise within the meaning of the term defined.

3.13. Leased property. - For property leased or purchased pursuant to a so-called capital lease, as determined under generally accepted accounting principles, on or after March 10, 1990, the term "leased property" does not include property which the taxpayer is required to show on its books and records as an asset under generally accepted principles of financial accounting. If the taxpayer is prohibited from expensing the lease payments for federal income tax purposes, the property shall be treated as purchased property under this Section if the property was purchased or leased on or after March 10, 1990. Property leased prior to March 10, 1990 shall be treated as leased property without regard to whether the lease is a capital lease or an operating lease.

3.14. New business facility. - The term "new business facility" means a business facility which satisfies all the requirements of subsections 3.14.1, 3.14.2, 3.14.3 and 3.14.4 of this Section 3.14.

3.14.1. The facility is employed by the taxpayer in the conduct of a business the net income of which is or would be taxable pursuant to W. Va. Code '11-21 or 24 et seq. Such facility shall not be considered a new business facility in the hands of the taxpayer if the taxpayer's only activity with respect to such facility is to lease it to another person or persons. This restriction will not apply where the lease is between project participants and the lessee's lease payments do not constitute qualified investment, and investment in the property will qualify only at the level of third party transactions between a participant and an entity outside of the circle of project participants under 3.14.3 of these regulations.

3.14.2. For periods subsequent to March 9, 1990, such facility is purchased by, or leased to, the taxpayer and placed in service or use on or after March 1, 1985. For periods prior to March 10, 1990, such facility was placed in service or use on or after March 1, 1985, without regard to the time of purchase or leasing.

3.14.3. The facility was not purchased or leased by the taxpayer from a related person or a project participant, or related person of a project participant, in any certified project in which the taxpayer is a participant. The Tax Commissioner may waive this requirement if the facility was acquired from a related party for its fair market value and the acquisition was not tax motivated. Note that this provision does not disqualify investment in property purchased or leased by a project participant from an unrelated outside third party. However, the investment in lease or sublease payments between project participants in such property resulting from a subsequent lease arrangement would not qualify; nor would the purchase of such property by one project participant from another project participant qualify.

3.14.3.1. Given the statutory mandate for a reasonable construction of the business investment and jobs expansion tax credit statute enacted by the Legislature in W. Va. Code '11-13C-14(b) on March 10, 1990, the Tax Commissioner shall exercise the discretion granted in this Section of these regulations and W. Va. Code ''11-13C-3(b)(12)(C) and 11-13C-14(e)(3)(C) by refusing to grant any waiver of the proscription set forth therein except in extraordinary circumstances.

3.14.4. Such facility was not in service or use during the ninety (90) days immediately prior to transfer of the title to such facility, or prior to the commencement of the term of the lease of such facility: Provided, That this ninety (90) day period may be waived by the Tax Commissioner prior to March 10, 1990 for good and sufficient cause, and subsequent to March 9, 1990 if the Commissioner determines that persons employed at the facility may be treated as "new employees" as that term is defined in W. Va. Code '11-13C-14 and elsewhere in W. Va. Code '11-13C and in these regulations for periods subsequent to March 9, 1990.

3.14.5. Notwithstanding the provisions of subparagraphs 3.14.1, 3.14.2, 3.14.3 and 3.14.4 of this Section 3.14, the purchase or leasing of a facility or of property from a nonparticipant unrelated party by a participant in a certified project who then leases, subleases or sells such property to a participant in the same certified project may constitute qualified investment in a new business facility or in property purchased or leased for business expansion or in new property, as defined in these regulations if such facility or property otherwise qualifies as such in accordance with W. Va. Code '11-13C and these regulations; and lease, sublease or purchase price payments between project participants shall not constitute qualified investment.

3.15. New employee.

3.15.1. The term "new employee" means a person residing and domiciled in this State, hired by the taxpayer to fill a position for a job in this State which previously did not exist in the taxpayer's business enterprise in this State prior to the date on which the taxpayer's qualified investment is placed in service or used in this State. In no case shall the number of new employees directly attributable to such investment for purposes of this credit exceed the total net increase in the taxpayer's employment in this State: Provided, That with respect to taxpayers who file application for certification of a project under W. Va. Code '11-13C-4b after March 10, 1990, and other taxpayers which place qualified investment into service or use after March 10, 1990, the Tax Commissioner may require that the net increase in the taxpayer's employment in this State be determined and certified for the taxpayer's controlled group; and in the case of a project involving more than one (1) person for the controlled groups of all participants, taken as a whole: Provided, however, That persons filling jobs saved as a direct result of taxpayer's qualified investment in property purchased or leased for business expansion on or after March 10, 1990 may be treated as new employees filling new jobs if the taxpayer certifies the material facts to the Tax Commissioner and the Tax Commissioner expressly finds that:

3.15.1.1. But for the new employer purchasing the assets of a business in bankruptcy under chapter seven or eleven of the United States Bankruptcy Code and such new employer making qualified investment in property purchased or leased for business expansion, the assets would have been sold by the United States bankruptcy court in a liquidation sale and the jobs so saved would have been lost; or

3.15.1.2. But for taxpayer's qualified investment in property purchased or leased for business expansion in this State, taxpayer would have closed its business facility in this State, taxpayer would have closed its business facility in this State and the employees of the taxpayer located at such facility would have lost their jobs: Provided, That the Tax Commissioner shall not make this certification unless the Tax Commissioner finds that the taxpayer is insolvent as defined in 11 U.S.C. '101(31) or that the taxpayer's business facility was destroyed in whole or in significant part by fire, flood or other act of God.

3.15.1.2.a. This Section 3.15.1.2 shall apply when,

But for the making of qualified investment in property purchased or leased for business expansion in this State, the business facility in which such property purchased or leased for business expansion is placed in service or use, or which itself constitutes property purchased or leased for business expansion, would have closed and the employees at the facility would have lost their jobs: Provided, That the Tax Commissioner shall not make this certification unless the Tax Commissioner finds that the entity which owned the facility prior to the making of the qualified investment was insolvent as defined in 11 U.S.C. '101(31) immediately prior to the making of such qualified investment, or that the business facility was destroyed in whole or in significant part by fire, flood or other act of God.

3.15.1.3. Jobs relating to an insolvent business may be saved by:

3.15.1.3.a. The purchase of the assets of an insolvent entity by an unrelated entity, with or without the making of additional capital investment to be added to those assets, with the resulting continuation of employment and operations formerly maintained by the insolvent entity;

3.15.1.3.b. The purchase of, or merger of, an insolvent entity, by or with an unrelated entity, and the resulting continuation of operations formerly carried out by the formerly insolvent entity, and a resulting continuation of employment; or

3.15.1.3.c. Purchase of the assets of an insolvent entity by a partnership, or the joining of an insolvent entity with a partnership, as a partner, whereby the assets, or assets and liabilities, of the insolvent entity, as a partner, are absorbed by and become assets and liabilities of the partnership which, subsequent to the addition of the insolvent entity as a partner, shall not be insolvent, with the resultant continuation of employment and operations relating to the formerly insolvent entity.

3.15.1.4. Whether a facility was destroyed in whole, or in significant part, by an act of God depends on the facts and circumstances of each case.

3.15.2. A person shall be deemed to be a "new employee" only if such person's duties in connection with the operation of the business facility are on:

3.15.2.1. A regular, full-time and permanent basis; or

3.15.2.2. A regular, part-time and permanent basis: Provided, That such person is customarily performing such duties at least twenty (20) hours per week for at least six (6) months during the taxable year.

3.15.2.3. "Full-time employment" means employment for at least one hundred forty (140) hours per month at a wage not less than the prevailing state or federal minimum wage, depending on which minimum wage provision is applicable to the business: Provided, That for new jobs filled prior to March 10, 1990, "full-time employment" means employment for at least one hundred twenty (120) hours per month at a wage not less than the prevailing state or federal minimum wage, depending on which minimum wage provision is applicable to the business.

3.15.2.4. "Permanent employment" does not include employment that is temporary or seasonal and therefore the wages, salaries and other compensation paid to such temporary or seasonal employees will not be considered for purposes of this credit.

3.16. New job. - The term "new job" means a job which did not exist in the business of the taxpayer in this State prior to the taxpayer's qualified investment being made, or which is a saved job as discussed in Section 3.15 and the subsections thereof of these regulations and W. Va. Code '11-13C-14(e)(4), and which is filled by a new employee.

3.17. New property. - The term "new property" means:

3.17.1. Property the construction, reconstruction or erection of which is completed on or after March 1, 1985 and which was placed in service or use after such date; and

3.17.2. Property leased or acquired by the taxpayer that is placed in service or use in this State on or after March 1, 1985, if the original use of such property commences with the taxpayer and commences on or after such date.

3.17.3. New property must constitute property purchased or leased for business expansion in order for investment in such property to qualify for this credit.

3.18. Original use. - The term "original use" means the first use to which the property is put, whether or not such use corresponds to the use of the property by the taxpayer.

3.19. Partnership and partner. - The term "partnership" includes a syndicate, group, pool, joint venture or other unincorporated organization through or by means of which any business, financial operation or venture is carried on, and which is not a trust or estate, a corporation or a sole proprietorship. The term "partner" includes a member in such a syndicate, group, pool, joint venture or organization.

3.20. Person. - The term "person" includes any natural person, corporation or partnership.

3.21. Property purchased or leased for business expansion.

3.21.1. Included property. - Except as provided in subparagraph 3.21.2, the term "property purchased or leased for business expansion" means real property, and improvements thereto, and tangible personal property, but only if such real or personal property was constructed, purchased, or leased and placed in service or use by the taxpayer, for use as a component part of a new or expanded business facility, as defined in this Section, which is located within West Virginia. This term includes only:

3.21.1.1. Real property, and improvements thereto having a useful life of four or more years, placed in service or use on or after March 1, 1985, by the taxpayer.

3.21.1.2. Real property, and improvements thereto, or tangible personal property acquired by written lease having a primary term of ten (10) or more years and placed in service or use by the taxpayer on or after March 1, 1985.

3.21.1.3. Tangible personal property placed in service or use by the taxpayer on or after March 1, 1985, with respect to which depreciation, or amortization in lieu of depreciation, is allowable in determining the personal or corporation net income tax liability of the business taxpayer under W. Va. Code, '11-21 or 24 et seq., and which has a useful life, at the time such property is placed in service or use in this State, of four (4) or more years.

3.21.1.4. Tangible personal property acquired by written lease having a primary term of four (4) years or longer, that commenced and was executed by the parties thereto on or after February 1, 1986, if used as a component part of a new or expanded business facility, shall be included within this definition.

3.21.1.5. Tangible personal property owned, or leased, and used by the taxpayer at a business location outside this State which is moved into this State on or after February 1, 1986, for use as a component part of a new or expanded business facility located in this State: Provided, That if the property is owned, it must be depreciable or amortizable personal property for income tax purposes, and have a useful life of four (4) or more years remaining at the time it is placed in service or use in this State, and if the property is leased, the primary term of the lease remaining at the time the leased property is placed in service or use in this State must be four (4) or more years.

3.21.2. Excluded property. - The term "property purchased or leased for business expansion" shall not include:

3.21.2.1. Property owned or leased by the taxpayer and for which the taxpayer was previously allowed tax credit for industrial expansion, tax credit for industrial revitalization, tax credit for coal loading facilities or the tax credits allowed by W. Va. Code '11-13C-1 et seq. (the business investment and jobs expansion tax credit or supercredit, small business credit and corporate headquarters relocation credit).

3.21.2.2. Property owned or leased by the taxpayer and for which the seller, lessor, or other transferor, was previously allowed tax credit for industrial expansion, tax credit for industrial revitalization, tax credit for coal loading facilities, or the tax credits allowed by W. Va. Code '11-13-1 et seq. (the business investment and jobs expansion tax credit or supercredit, the small business tax credit or the corporate headquarters relocation credit).

3.21.2.3. Repair costs, including materials used in the repair, unless for federal income tax purposes the cost of the repair must be capitalized and not expensed.

3.21.2.4. Airplanes.

3.21.2.5. Property which is primarily used outside this State, with use being determined based upon the amount of time the property is actually used both within and without this State.

3.21.2.6. Property which is acquired incident to the purchase of the stock or assets of the seller, unless for good cause shown, the Tax Commissioner consents to waiving this requirement.

3.21.2.7. Natural resources in place purchased or leased prior to March 1, 1985, and placed in service or use after March 9, 1990, or purchased or leased after March 1, 1985 pursuant to an option to purchase or lease such natural resources in place acquired prior to March 1, 1985 but exercised in whole or in part on or after March 10, 1990, and not subject to the transition rules of W. Va. Code '11-13C-14(c)(2) unless pursuant to a written contract to purchase or lease executed prior to March 10, 1990, and subject, to one (1) or more of the transition rules set forth in W. Va. Code '11-13C-14(c)(2). Property purchased or leased prior to March 1, 1985, but placed in service or use on or after March 1, 1985 and prior to March 10, 1990 may constitute property purchased or leased for business expansion if other requirements for such property are otherwise met.

3.21.2.8. Property purchased or leased on or after March 10, 1990, and not subject to the transition rules of W. Va. Code '11-13C-14(c)(2) unless pursuant to a written contract to purchase or lease executed prior to March 10, 1990, and subject, to one (1) or more of the transition rules set forth in W. Va. Code '11-13C-14(c)(2), the cost or consideration for which cannot be quantified with any reasonable degree of accuracy at the time such property is placed in service or use: Provided, That when the contract of purchase or lease specifies a minimum purchase price or minimum annual rent, the amount thereof shall be used to determine the qualified investment in such property under W. Va. Code '11-13C-6 if the property otherwise qualifies as property purchased or leased for business expansion.

3.21.3. Assumption of liabilities of the seller by the purchaser of property purchased or leased for business expansion in consideration for such property will count toward the cost of such property in determining qualified investment.

3.21.4. Investment in intangibles is excluded from the measure of property purchased or leased for business expansion.

3.21.5. Purchase date. - Property shall be deemed to have been purchased prior to a specified date only if:

3.21.5.1. The physical construction, reconstruction or erection of the property was begun prior to the specified date, or such property was constructed, reconstructed, erected or acquired pursuant to a written contract as existing and binding on the purchase prior to the specified date;

3.21.5.2. The machinery or equipment was owned by the taxpayer prior to the specified date or was acquired by the taxpayer pursuant to a binding purchase contract which was in effect prior to the specified date; or

3.21.5.3. In the case of leased property, there was a binding written lease or contract to lease identifiable property in effect prior to the specified date.

3.22. Purchase. - The term "purchase" means any acquisition of property, but only if:

3.22.1. The property is not acquired from a person whose relationship to the person acquiring it would result in the disallowance of deductions under Section 267 or 707(b) of the United States Internal Revenue Code of 1954, as amended, and in effect on January 1, 1985.

3.22.2. The property is not acquired by one (1) component member of a controlled group from another component member of the same controlled group. The Tax Commissioner can waive this requirement if the property was acquired from a related party for its then fair market value; and

3.22.2.1. Given the statutory mandate for a reasonable construction of the business investment and jobs expansion tax credit statute enacted by the Legislature in W. Va. Code '11-13C-14(b) on March 10, 1990, the Tax Commissioner shall exercise the discretion granted in this Section of these regulations and W. Va. Code '11-13C-3(b)(20)(B) by refusing to grant any waiver of the proscription set forth therein except in extraordinary circumstances.

3.22.3. The basis of the property for federal income tax purposes, in the hands of the person acquiring it is not determined:

3.22.3.1. In whole or in part by reference to the federal adjusted basis of such property in the hands of the person from whom it was acquired; or

3.22.3.2. Under Section 1014(e) of the United States Internal Revenue Code of 1954, as amended, and in effect on January 1, 1985.

3.23. Qualified activity. - The term "qualified activity" means any business or other activity subject to the tax imposed by W. Va. Code '11-12A or 13 et seq. (or both): Provided, That on and after July 1, 1987, the phrase "qualified activity" means any business or other activity subject to the tax imposed by W. Va. Code '11-13, 13A, 13B, 21, 23 and 24 et seq. (or any one (1) or combination of such articles), but not the activity of merely holding employment as an employee subject to personal income tax and subject to withholding by the employer.

3.24. Related person. - The term "related person" means:

3.24.1. A corporation, partnership association or trust controlled by the taxpayer:

3.24.2. An individual corporation, partnership, association or trust that is in control of the taxpayer;

3.24.3. A corporation, partnership, association or trust controlled by an individual, corporation, partnership, association or trust that is in control of the taxpayer; or

3.24.4. A member of the same controlled group as the taxpayer.

For purposes of Sections 3.22 and 3.25 of these regulations, "control," with respect to a corporation means ownership, directly or indirectly, of stock possessing fifty percent (50%) or more of the total combined voting power of all classes of the stock of such corporation entitled to vote. "Control," with respect to a trust, means ownership, directly or indirectly, of fifty percent (50%) or more of the beneficial interest in the principal or income of such trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section 267(c) of the United States Internal Revenue Code of 1954, as amended, other than paragraph (3) of such Section.

3.25. Replacement facility. - The term "replacement facility" means any property (other than an expanded facility) that replaces or supersedes any other property located within this State that:

3.25.1. The taxpayer or a related person used in or in connection with any activity for more than two (2) years during the period of five (5) consecutive years ending on the date the replacement or superseding property is placed in service by the taxpayer.

3.25.2. Is not used by the taxpayer or a related person in or in connection with any qualified activity for a continuous period of one (1) year or more commencing with the date the replacement or superseding property is placed in service by the taxpayer.

3.26. Small business.

3.26.1. July 1, 1987 to March 9, 1990. - For periods prior to March 10, 1990, and after June 30, 1987, the term "small business" means a small business which has either annual payroll or annual gross receipts of not more than the following amounts for the first tax year when investment is first placed in service or use and beginning during a period listed. Refer to Section 7a of these regulations for material relating to small businesses.

Period	Annual Payroll	Annual GrossReceipts
July 1, 1987 to Dec. 31, 1988	$1,500,000	$5,000,000
Jan. 1, 1989 to Dec.31, 1989	$1,562,050	$5,206,850
Jan. 1, 1990 to March 9, 1990	$1,637,150	$5,457,250

3.26.1.1. Annual payroll. - For small businesses which have placed investment into service or use before March 10, 1990, or which are subject to a transition rule set forth in W. Va. Code '11-13C-14(c)(2), the annual payroll of a business shall include the employees of the business whether employed on a full-time, part-time, temporary, or other basis, during the preceding twelve (12) months, the payroll of the business shall be divided by the number of weeks, including fractions of a week, that it has been in business, and the result multiplied by fifty-two (52).

3.26.1.2. Annual gross receipts. - For small businesses which have placed investment into service or use before March 10, 1990, or which are subject to a transition rule set forth in W. Va. Code '11-13C-14(c)(2), the annual gross receipts of a business shall be calculated as follows:

3.26.1.2.a. The "annual gross receipts" of a business which has been in business for three (3) or more complete fiscal years means the highest annual gross revenues of the business from among the last three (3) fiscal years. For purposes of this definition, the gross revenues of the business includes revenues from sales of tangible personal property and services, interest, rents, royalties, fees, commissions and receipts from any other source, but less returns and allowances, sales of fixed assets, interaffiliated transactions between a business and its domestic and foreign affiliates, and taxes collected for remittance to a third party, as shown on its books for federal income tax purposes.

3.26.1.2.b. The annual receipts of a business that has been in business for less than three (3) complete fiscal years means its total receipts for the period it has been in business, divided by the number of weeks including fractions of a week that it has been in business, and multiplied by fifty-two (52).

3.26.2. Subsequent to March 10, 1990. - The term "small business" means a small business which has an annual payroll of one million seven hundred thousand dollars ($1,700,000) or less, and annual gross receipts of not more than five million five hundred thousand dollars ($5,500,000): Provided, That on or before January 15, 1991, and on or before each January 5th thereafter, the Tax Commissioner shall prescribe amounts which shall apply in lieu of the above amounts for taxable years beginning on or after January 1 of the calendar year in which the determination is made: Provided, however, That this determination shall not apply to small business projects which have received certification from the Tax Commissioner prior to March 10, 1990, if the said small business projects which have previously received certification continue to meet the requirements of a small business as in effect at the time of the certification of the project. Such prescribed amounts shall be determined in accordance with W. Va. Code '11-13C et seq. and notice thereof shall be filed in the State Register. For purposes of this definition:

3.26.2.1. Annual payroll. - For small businesses which place qualified investment into service or use after March 9, 1990, and which are not subject to a transition rule set forth in W. Va. Code '11-13C-14(c)(2), the annual payroll of a business shall include the employees of its domestic and foreign affiliates, whether employed on a full-time, part-time, temporary, or other basis, during the preceding twelve (12) months, the payroll of the business shall be divided by the number of weeks, including fractions of a week, that it has been in business, and the result multiplied by fifty-two (52). That amount shall then be added to the twelve (12) month payrolls of its domestic and foreign affiliates to determine the annual payroll of the business for purposes of this Section.

3.26.2.2. Annual gross receipts. - The annual gross receipts of a business shall include the annual gross receipts of its foreign and domestic affiliates.

3.26.2.2.a. The "Annual gross receipts" of a business which has been in business for three (3) or more complete fiscal years means the highest annual gross revenues of the business for the last three (3) fiscal years. For purposes of this definition, the gross revenues of the business includes revenues from sales of tangible personal property and services, interest, rents, royalties, fees, commissions and receipts from any other source, but less returns and allowances, sales of fixed assets, interaffiliated transactions between a business and its domestic and foreign affiliates, and taxes collected for remittance to a third party, as shown on its books for federal income tax purposes.

3.26.2.2.b. The annual receipts of a business that has been in business for less than three (3) complete fiscal years means its total receipts for the period it has been in business, divided by the number of weeks including fractions of a week that it has been in business, and multiplied by fifty-two (52).

3.26.2.2.c. The annual payroll, annual gross receipts and annual median compensation requirements applicable to any small business except a certified project credit taker under Section 3.26.2 of these regulations shall, be determined when qualified investment is first placed in service or use, and the subsequently redetermined inflation adjusted amounts for each year, shall be the requirements applicable to that business for each year throughout the ten (10) year credit period and any further carryover or other extended credit period for the original credit to which the requirements relate.

3.26.2.3. Affiliates. - The term "affiliates" includes all concerns which are affiliates of each other when either directly or indirectly one concern controls or has the power to control the other or a third party or parties controls or has the power to control both. In determining whether concerns are independently owned and operated and whether or not affiliation exists, consideration shall be given to all appropriate factors, including common ownership, common management and contractual relations.

3.26.2.4. Concern. - The term "concern" means any business entity organized for profit (even if its ownership is in the hands of a nonprofit entity), having a place of business located in this State, and which makes a contribution to the economy of this State through payment of taxes, or the sale or use in this State of tangible personal property, or the procurement or providing of services in this State, or the hiring of employees who work in this State. "Concern" includes but is not limited to any person as defined in W. Va. Code '11-13C-3(b)(18).

3.27. Taxpayer. - The term "taxpayer" means any person subject to taxes imposed by W. Va. Code ''11-13, 11-13a, 11-13b, 11-21, 11-23 or 11-24 et seq. or any one or combination thereof.

3.28. This Code. - The term "this Code" means that the Code of West Virginia, 1931, as amended.

3.29. This State. - The term "this State" means the State of West Virginia.

3.30. Used property. - The term "used property" means property acquired after February 28, 1985, that is not "new property."

W. Va. Code R. § 110-13C-3