WV Center on Budget and Policy > Blog > One-Third of Tax Credits Go Out of State

One-Third of Tax Credits Go Out of State

Last fall, the WVCBP published a report critiquing the state’s efforts at evaluating business tax incentives. One of the documents examined in the report was the state’s Tax Credit Disclosure List. Published every five years, the Tax Credit Disclosure List compiles a list of each individual claimant for any of the state’s multiple tax credits (remember though, tax credits are only one form of tax incentive).

The latest edition of the Tax Credit Disclosure List contains information from the state’s tax credits and their claimants in 2007. The list shows that there were a total of 588 tax credits claimed in 2007. Instead of a dollar amount for each claim, the Tax Credit Disclosure list offers a range of possible values. Most of the credits claimed fall in the $1-$50,000 range, however 12 claims fall in the $1,000,000+ range. Therefore, the minimum total value of the tax credits would be roughly $24 million; while the total maximum value of the tax credits can’t be calculated, we know it is greater than $66 million (See Table).

Value Range

Number of Claimants

Min Value

Max Value

$1 to $50,000

482

$482

$24,100,000

$50,000 to $100,000

38

$1,900,000

$3,800,000

$100,000 to $250,000

36

$3,600,000

$12,600,000

$250,000 to $500,000

13

$3,250,000

$6,500,000

$500,000 to $1,000,000

7

$3,500,000

$7,000,000

$1,000,000+

12

$12,000,000

$12,000,000+

Total

588

$24,250,482

$66,000,000+

 The Tax Credit Disclosure List also contains the address of those claiming each credit. 221 of the 588 total credits claimed, roughly 38 percent, went to businesses and individuals outside of West Virginia. Tax credits went to a total of 29 states other than West Virginia in 2007. The chart below shows that most of the out of state claims came from our neighboring states of Virginia, Ohio, and Pennsylvania, but claimants from states across the country received tax credits from West Virginia.

 

WV Tax Credit Recipients by State

Source: 2007 West Virginia Tax Credit Disclosure List

The Tax Credit Disclosure List contains which credit each claimant is receiving. Although a number of tax credits listed have since expired or have been phased out, due to their structure, businesses can continue to claim them for a number of years. The Industrial Expansion/Revitalization Credit was the most popular credit, with 167 claims, followed by the Manufacturing Investment Credit.

 

 WV Tax Credits by Number of Recipients

Source: 2007 West Virginia Tax Credit Disclosure List

So the West Virginia Tax Credit Disclosure List provides a lot more transparency than some of the state’s other documents cataloging business tax incentives. But it still has significant shortcomings: the data is out of date, one can’t compile a total value, and it actually isn’t found anywhere online. The report also doesn’t evaluate the effectiveness of any of the listed credits. By updating it more often, making it more openly available, including more business tax credits and incentives,  the state could go much further along towards transparency and accountability.

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