Offsetting Property Tax Bills: West Virginia's Property Tax Adjustment Credits

Each year, the West Virginia Tax Division publishes TSD 110, a handy overview of the tax credits available to businesses and individuals across the state. As a partner at Brown Edwards, I like to walk our clients through these credits one topic at a time so the details are easier to digest — this post is another installment in that series.

West Virginia has built several income tax credits specifically to offset the property taxes businesses and individuals pay on inventory, equipment, and vehicles. Here's a look at a couple of them.

Small Business Property Tax Adjustment Credit

Code: W. Va. Code §11-13MM-5 | Relevant Form(s): Form SB-1

The Small Business Adjustment Tax Credit is a refundable tax credit against up to 100% of Corporation Net Income Tax, or up to 100% of Personal Income Tax on flow-through income.

Q: What does this credit do?

A: The Small Business Property Tax Adjustment Credit provides a refundable credit against West Virginia Corporation Net Income Tax and Personal Income Tax for certain property taxes paid on qualifying business personal property.

Q: Who qualifies?

A: Eligible taxpayers include:

• Corporations
• Electing pass-through entities
• Partnerships
• S corporations
• Sole proprietorships
• Owners of pass-through entities claiming the credit on their individual returns

To qualify, the aggregate appraised value of eligible personal property, including motor vehicles, generally must not exceed $1 million.

Q: Is the credit refundable?

A: Yes. If the allowable credit exceeds the taxpayer's West Virginia income tax liability, the excess may be refunded.

Q: How much is the credit?

A: The credit generally equals 50% of the West Virginia ad valorem personal property tax timely paid on qualifying business personal property.

Q: What property qualifies?

A: Eligible property generally includes business personal property subject to West Virginia ad valorem property tax, including:

• Machinery and equipment
• Furniture and fixtures
• Computers and technology equipment
• Certain business vehicles
• Other taxable business personal property reported to the county assessor

Q: Is real estate included in the calculation?

A: No. The credit applies to personal property taxes, not real property taxes.

Q: Are motor vehicles included?

A: Yes. Motor vehicles are included when determining eligibility and may generate the credit. However, coordination rules apply if the taxpayer also claims the Motor Vehicle Property Tax Adjustment Credit.

Q: Can I claim both this credit and the Motor Vehicle Property Tax Adjustment Credit on the same vehicle tax?

A: No. Property taxes used to generate the Motor Vehicle Property Tax Adjustment Credit cannot also generate a duplicate benefit under the Small Business Property Tax Adjustment Credit.

Q: Does the property tax have to be paid on time?

A: Yes. Only timely paid ad valorem property taxes generally qualify. Late-paid taxes may not be eligible for the credit.

Q: How is the $1 million limitation determined?

A: The limitation is based on the aggregate appraised value of qualifying personal property. Taxpayers should evaluate all eligible personal property subject to the aggregation rules required by the statute and administrative guidance.

Q: Do related entities have to be combined when testing the $1 million threshold?

A: Potentially yes. Taxpayers should carefully review the related-party and controlled-group provisions contained in the statute and TSD 456. Ownership of multiple entities may require aggregation of appraised values across related businesses when determining eligibility.

Q: What documentation should be retained?

A: Taxpayers should keep:

• County property tax tickets
• Proof of payment
• Assessment information
• Fixed asset schedules
• Vehicle information where applicable
• Copies of Form SB-1 and supporting calculations

Q: What must be attached to the return?

A: Taxpayers generally should attach Form SB-1 and supporting property tax receipts.

Q: What if property taxes from multiple tax tickets were paid during the same income tax year?

A: Separate calculations may be necessary. Taxpayers should ensure property is not counted more than once when applying the $1 million appraised value limitation.

Q: Are oil and gas taxpayers eligible?

A: Certain oil and gas working-interest owners are specifically excluded from eligibility under the statute.

Q: Are public service companies eligible?

A: Generally, centrally assessed public service companies are not eligible for the credit.

Q: When did the credit become effective?

A: The credit applies for tax years beginning on or after January 1, 2024.

Motor Vehicle Property Tax Adjustment Credit

Code: W. Va. Code §11-13MM-3 | Relevant Form(s): Form MV-1 (mailed by the Tax Division)

The credit offsets a taxpayer's Personal Income Tax or Corporation Net Income Tax, as applicable, in the amount of West Virginia ad valorem property tax timely paid during the income tax year on owned or leased motor vehicles.

Q: Who can claim the credit?
A: Individuals and businesses that timely pay West Virginia ad valorem property tax on qualifying motor vehicles may claim the credit. The credit is available against either Personal Income Tax or Corporation Net Income Tax, depending on the taxpayer.

Q: Does the vehicle have to be used for business purposes?
A: No. The credit is not limited to business vehicles. Property tax paid on personal-use vehicles may also qualify, provided the tax was timely paid, and all other requirements are met.

Q: What if the vehicle is leased rather than owned?
A: Leased vehicles may qualify for the credit if the taxpayer is responsible for and timely pays the West Virginia ad valorem property tax on the vehicle.

Q: When is the credit claimed?
A: The credit is claimed on the income tax return for the tax year in which the qualifying property tax payment is made, not necessarily the year for which the property tax was assessed.

Q: What happens if I do not owe any West Virginia income tax?
A: This credit is refundable. If the allowable credit exceeds your income tax liability, the excess may be refunded.

Q: What documentation should I keep?
A: Taxpayers should retain copies of county property tax bills, proof of payment, vehicle registration information, and Form MV-1 in case the credit is later questioned by the Tax Division.

Q: Does timely payment matter?
A: Yes. The credit generally applies only to ad valorem property taxes that are timely paid. Property taxes paid after the applicable due date may not qualify for the credit, so make sure you schedule these payments to be paid on time.

Q: Can I claim both the Motor Vehicle Property Tax Adjustment Credit and the Small Business Property Tax Adjustment Credit on the same vehicle taxes?
A: No. Property taxes used to calculate the Motor Vehicle Property Tax Adjustment Credit must reduce the amount of property taxes available for the Small Business Property Tax Adjustment Credit. Taxes paid on the same vehicle tax cannot generate a double benefit.

Q: Are recreational vehicles or specialty vehicles eligible?
A: Vehicles subject to West Virginia ad valorem personal property tax may qualify. Eligible vehicles can include automobiles, trucks, motorcycles, buses, trailers, antique vehicles, farm trucks, and ATVs.

Q: How do I obtain Form MV-1?
A: The West Virginia Tax Division generally mails Form MV-1 to taxpayers based on information received from county assessors and sheriffs. Taxpayers who do not receive a form should check the WV State Tax Department’s online tool or contact the Tax Division for assistance.

These credits are easy to overlook because they're tied to property tax payments rather than a big capital project, but for many of our clients they add up to real, recurring savings. Just remember that the Small Business Property Tax Adjustment Credit and the Motor Vehicle Property Tax Adjustment Credit coordinate on the same vehicles rather than stack. Make sure your property tax receipts are being tracked and handed to your tax preparer each year.

Source: West Virginia Tax Division, TSD 110 – West Virginia Tax Credits (Rev. October 2025). This article summarizes general information from that publication for educational purposes and is not a substitute for the underlying tax laws or regulations, nor is it individualized tax advice. Please consult your Brown Edwards advisor about how these credits may apply to your specific situation.