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Schedule MITC-1
MANUFACTURING INVESTMENT TAX CREDIT INSTRUCTIONS
(For periods AFTER January 1, 2020)

The purpose of the Manufacturing Investment Tax Credit is to Purchases of the following property will not qualify for the
encourage the establishment of new industry, the expansion Manufacturing Investment Tax Credit:
of existing industry, and the growth and revitalization of
industrial facilities in West Virginia. 1. Property placed into service prior to January 1, 2003;
2. Motor vehicles licensed by the Department of Motor
ELIGIBLE TAXPAYERS Vehicles;
Eligibility for the Manufacturing Investment Tax Credit is 3. Airplanes;
limited to taxpayers with manufacturing facilities within West
Virginia. The term, “Manufacturing,” means any business 4. O -premiseﬀtransportation equipment;
activity classi ﬁed as having a sector identi er, ﬁ consisting 5. Property primarily used outside of West Virginia;
of the ﬁrst two digits of the sixdigit North American Industry
6. Property acquired incident to the purchase of the
Classi ﬁcation System code number, of thirty-one, thirty-two,
stock or assets of an industrial Taxpayer which was or
or thirty-three.
had been used by the seller in his industrial business
AMOUNT OF CREDIT in West Virginia, or property in which investment was
previously the basis of a tax credit taken under the
The tax credit shall be limited to 5% of the total quali edﬁ business investment and jobs expansion tax credit
investment for industrial expansion or revitalization. The tax (supercredit), industrial expansion and revitalization
credit is applied and prorated over 10 consecutive years at tax credit, research and development tax credit, small
a rate of 1/2% for each year. The amount of credit applied business tax credit, corporate headquarters relocation
in any given year cannot reduce the taxpayer’s liability for tax credit, economic opportunity tax credit, strategic
Severance Tax ( W. Va. Code §§11-13A-1 et seq.) and research and development tax credit, manufacturing
Corporation Net Income Tax (W. Va. §§11-24-1 et seq.) by investment credit or any other tax credit allowable
more than 60% (50% for tax years that began before January under current or former provisions of Chapter 11 of
1, 2009). Any unused credit for a particular year is forfeited. the West Virginia Code.
PROPERTY PURCHASED FOR MANUFACTURING 7. Repair costs including materials used in the repair,
INVESTMENT unless for federal income tax purposes, the cost of the
Property purchased for manufacturing investment is de ﬁned repair must be capitalized and not expensed;
as real property improvements to realty, and tangible personal 8. Property not directly attributable to the creation or
property, constructed or purchased on or after January 1, expansion of a manufacturing facility.
2003, for use as a component part of a new, expanded, or 9. Property acquired from certain persons or entities
revitalized industrial facility. Only tangible personal property related to the credit claimant.
with respect to which depreciation or amortization, in lieu of
depreciation, is allowable in determining the federal income 10. Certain property having a carryover or referred federal
tax liability of the industrial taxpayer, that has a useful life, tax basis, based on certain Internal Revenue Code
at the time the property is placed in service or use in West provisions.
Virginia of 4 years or more will qualify for credit. Useful life is COST OF QUALIFIED INVESTMENT PROPERTY
actual economic useful life, the period over which the asset
Net cost of quali ﬁed property is the monetary consideration
may reasonably be expected to be actively useful in the
provided for acquisition of title or for lease or ownership of
Taxpayer’s business.
the subject property. Net cost does not include the value of
LEASING OF PROPERTY property given in trade or exchange for property purchased
for manufacturing investment.
Leased property used as a component part of a new
or expanded, industrial facility is considered property If property is damaged or destroyed by re, ood,ﬁstormﬂor
purchased for manufacturing investment if the property is other casualty, or is stolen, then the cost of replacement
newly acquired on or after January 1, 2003, the lease term property does not include any insurance proceeds received
is at least 10 years, and the rent to be paid over the primary in compensation for the loss.
term of the lease is quanti ﬁable. However, lease renewals,
subleases or assignments do not qualify. In the case of leased property acquired for a period of 10
years or longer, up to 20 years, cost is 100% of the rent to
INELIGIBLE PROPERTY be paid over the primary term of the lease, not to exceed 20
WEST VIRGINIA STATE TAX DEPARTMENT
MITC-1 Instructions — Rev. 9/2020 Page 1 of 3

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years. Lease renewals, options, and some subleases and Virginia prior to the end of the categorized useful life of the
assignments cannot be considered. Leases for which the property must be recalculated for all tax years for which the
amount of rent to be paid over the primary term cannot be credit based on that asset was applied, according to actual
quanti ﬁed will not qualify for purposes of the credit. useful life. For example, Company A invests $10 million in
equipment with an assumed useful life of 8 years in 2003.
In the case of self-constructed property, the cost of self-
constructed property is the amount charged to the capital ($10M x 100% applicable percentage) x 5% = $500,000
account for purposes of depreciation.
The credit for Company A is calculated to equal $500,000 or
PROPERTY PURCHASED FOR MULTIPLE BUSINESS $50,000 per year for 10 years.
USES
($500,000) ÷ 10 years = $50,000 credit available each year.
In the case of property purchased and used partly as a
component of a new, expanded, or revitalized industrial Company A moves this equipment to New York in 2008.
facility and used partly in some other business or activity Therefore, the equipment’s actual useful life in West Virginia
not eligible for credit (for example, in retail selling), the is reduced to only 5 years. The corresponding credit is
cost of the property is apportioned between the quali ed ﬁ reduced according to the above formula from $500,000 to
and nonquali ﬁed activities, and the amount apportioned $166,667 or $16,667 per year for 10 years.
to the new or expanded or revitalized industrial facility is
considered quali ﬁed investment. The use of the property in (($10M x 331/3% applicable percentage) = $3,333,333.33) x
the quali ﬁed activity and nonquali ﬁed activity, respectively, 5% = $166,666.67)
must be thoroughly supported and explained by documents
submitted with the application, and the amount of credit $166,666.67 ÷ 10 years = $16, 666.67 credit available each
arising from investment in the multiple use property must be year

based on cost allocated to the quali ﬁed activity. A reconciliation statement for the 2003 through 2008 period
ELIGIBLE INVESTMENT re ﬂ ecting an over utilization of credit must then be submitted
with payment of any additional tax, interest and penalties
To determine the amount of eligible investment for the owed.
manufacturing investment tax credit, the cost of each asset
purchased is multiplied by the applicable percentage shown COMPUTATION OF MANUFACTURING INVESTMENT
below according to the useful life of the property. TAX CREDIT
If useful life is: The applicable percentage is: Computation of Eligible Investment:
4 years or more but less than 6 years 33 1/3% Column 1 Enter the net costs of the property in Column
6 years or more but less than 8 years 66 2/3% (1) on the appropriate line determined by the
8 years or more 100 % life of the property.

EXAMPLE Col. 2 & 3 Multiply the net costs in Column (1) by the
applicable percentages in Column (2). Enter
On February 10, 2003, a Taxpayer purchases a machine at the results in Column 3.
a cost of $25,000 for use in a new, expanded, or ongoing
portion of its industrial facility, which has a useful life of 6 Line 4 Add the ﬁgures in Column (3) and enter on Line 4.
years. This is the taxpayer’s eligible investment.

The eligible investment is equal to $16,666.67. Computation of Potential Current Annual Credit:
Eligible investment is calculated by multiplying the cost of Line 5 To determine the taxpayer’s total potential current
the equipment, $25,000, times the applicable percentage annual credit, which can be taken over a period
according to the useful life, 66 2/3%, to arrive at $16,666.67. of ten years, multiply the total eligible investment
(Line 4) by 5%. Enter the result on Line 5.
($25,000 x 66 2/3% = $16,666.67)
Computation of Current Annual Credit:
The credit attributable to the asset is equal to 5% of the Line 6 To determine the taxpayer’s annual credit earned
eligible investment or $833.33, (5% x $16,666.67 = $833.33). during the current taxable year, multiply the total
potential credit on Line 5 by 10%. Enter on Line 6.
This credit must be claimed over a period of 10 years at a
Forfeited if not used.
rate of 10% ($83.33) per year.
Credit from Previous Years:
CREDIT RECAPTURE
Line 7 Enter any annual Manufacturing Investment Tax
Credit attributable to property that ceases to be used in West
Credit from prior year(s). For eligible investments
WEST VIRGINIA STATE TAX DEPARTMENT
MITC-1 Instructions — Rev. 9/2020 Page 2 of 3

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for multiple year(s), a worksheet must be Line 10g Enter the lesser of Line 8, or Line 10c, or Line
provided showing the computation. [Reminder: 10f. This represents the maximum Manufacturing
The Manufacturing Investment Tax Credit is rstﬁ Investment Tax Credit available against your
available on or after January 1, 2003. The value Severance Tax liability. Also enter this amount on
on this line is $0 in 2003]. the Severance Tax return.

Computation of Total Annual Credit: Line 11 Annual Manufacturing Investment Tax Credit
Line 8 To determine the total amount of credit available adjusted for Severance Tax Claim – Subtract the
in the current taxable year, add the credit earned amount on line 10g from the amount on line 8.

during the current year shown on Line 6 to the Line 12a Enter total pre-credit Corporation Net Income Tax
amounts available from previous years shown on liability.
Line 7. Enter the total on Line 8.
Line 12b Enter sum of all other credits, if any, applied
Line 9 Credit O ﬀset Factor – Enter 0.6 (i.e., 60%) if the against your Corporation Net Income Tax liability.
current tax year began on or after January 1,
2009, otherwise enter 0.5 (i.e., 50%). Line 12c Subtract Line 12b from 12a.

Line 10a. Enter total pre-credit Severance Tax liability. Line 12d Corporation Net Income Tax Manufacturing
Investment Tax Credit Limit – Multiply the amount
Line 10b Enter sum of Business Investment and Jobs on line 12a by the Credit O ﬀset Factor from Line 9.
Expansion Credit (Super Credit), Industrial
Expansion and Revitalization Credit, Research Line 12e Enter sum of Industrial Expansion and
and Development Project Credit, Residential Revitalization Credit, Research and Development
Housing Development Project Credit and Coal Project Credit, Residential Housing Development
Loading Facilities Credit, if any, applied against Credit, and Aerospace Industrial Facility Credit if
your Severance Tax liability. any, applied against your Corporation Net Income
Tax liability.
Line 10c Subtract Line 10b from 10a.
Line 12f Subtract Line 12e from Line 12d.
Line 10d Severance Tax Manufacturing Investment Tax
Credit Limit – Multiply the amount on line 10a by Line 12g Enter the lesser of Line 11, or Line 12c, or Line
the Credit O ﬀset Factor from Line 9. 12f. This represents the maximum Manufacturing
Investment Tax Credit available against your
Line 10e Enter sum of Industrial Expansion and Revitalization Corporation Net Income Tax liability. Also, enter
Credit, Research and Development Project Credit this amount on the Summary of Corporation Net
and Residential Housing Development Credit, if Income Tax Credits (Form CIT-120TC).
any, applied against your Severance Tax liability.

Line 10f Subtract Line 10e from Line 10d.

WEST VIRGINIA STATE TAX DEPARTMENT
MITC-1 Instructions — Rev. 9/2020 Page 3 of 3

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