Pay Your West Virginia Small Business Taxes

Paying West Virginia small business taxes is a part of keeping your business legally compliant. But how do you know what your West Virginia business tax rate is? How can you find out where to file your returns and pay your fees? Needless to say, understanding how to file small business taxes in West Virginia can challenge even the most experienced business owners. One of the biggest challenges business owners face in understanding small business taxes is the fact that rates can change depending on entity type, activity, income, and more. To help business owners like you, we’ve compiled this guide to the most common business taxes levied by the state of West Virginia and which of our products and services can help make things easier at tax time.

For legal compliance help our Worry-Free Compliance Service can help you stay current with your filing obligations to keep you in good standing in your state.

If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses to learn more.

Step 1: Establish your West Virginia business’s corporate income tax obligations

No two businesses are alike, and that means that there’s no easy formula to calculate your small business’s taxes. If your company was formed in or does business in West Virginia, you’ll likely have to pay West Virginia small business taxes and file a tax return. The West Virginia business tax rate charged usually depends upon two things: the type of entity you operate and the amount of money your company earned during the tax year. 

Corporations are typically taxed at the state’s corporate income tax rate. However, if you operate your business as a limited liability company (LLC), partnership, or sole proprietorship, these are all considered pass-through entities. Pass-through entities are usually taxed at the state’s personal income tax rate.

Corporations

West Virginia charges corporations a flat, 6.5% income tax. If your company is organized as a traditional, or C corporation, you can expect to pay this as your West Virginia business tax rate. Information about how to file your tax returns, as well as any necessary forms, are available through the West Virginia State Tax Department. 

Pass-through entities

While West Virginia’s business tax rates for corporations are straightforward, it can be a little harder to decipher West Virginia business taxes for partnerships, S corporations, sole proprietorships, and LLCs. 

Pass-through entities like LLCs are taxed at your personal income tax rate in West Virginia. Similar to federal taxation, West Virginia charges marginal income taxes. These rates range from 3-6.5%, depending on your level of income. Check with the State Tax Department to confirm your personal tax rate. You may also need to confirm the date your returns are due, as different fiscal year-ends may have different due dates for returns.

Other considerations

An important thing to keep in mind when considering how to file small business taxes in West Virginia is whether you need to submit a return at all. Even if your business doesn’t make any money in a given year, you may still have to file a “zero return.” Sometimes this is called a null return, or a “No Business Return.” This type of tax return usually shows that you’re an active West Virginia company but confirms you didn’t make any money during the taxable period. Check with the State Department of Tax to clarify any questions about filing your return.

Step 2: Determine your West Virginia business’s employment taxes

If your West Virginia business has employees, you’ll need to consider whether you need to pay employment taxes. These are usually known as “withholding taxes,” or the amount of money you need to take out of an employee’s paycheck and give to the state each pay period. Different rates will apply to each employee, so be sure to check with the State Tax Department before finalizing your withholding tax returns or payments.

Step 3: Establish your West Virginia business’s additional state tax obligations

Some states have additional tax requirements for business owners, beyond income and employment taxes. While West Virginia is very business-friendly, there are a few additional taxes you need to consider when calculating your West Virginia business tax rates.

Sales tax

West Virginia charges a 6% sales tax. Business owners need to pass the sales tax they collect through to the state. This tax is usually charged on goods and services sold in the state. Be aware that local municipalities are free to charge up to an additional 1% sales tax as well. Make sure to check with your local tax authority to confirm your proper West Virginia small business tax rates. 

Unemployment taxes

West Virginia employers need to pay an unemployment insurance tax. This is another consideration for West Virginia small businesses when considering what their “real” West Virginia small business taxes are. Check with Workforce West Virginia to see what your rates and requirements are, as they may vary by employer and industry.

West Virginia is strict about enforcing payment of unemployment insurance tax. Businesses that don’t pay their taxes can be put on a searchable “Violators List.” You can see why paying your West Virginia small business taxes is such an important part of business compliance!

Excise taxes

Excise taxes are taxes imposed on the sale of specific goods or services, like alcohol, fuel, or certain other items. Most states don’t have excise taxes. West Virginia has a small number of excise taxes imposed on the sale of certain goods or businesses that operate in specific industries. Those excise taxes include:

• A beer and wine tax
• A business occupation tax for operating certain public utilities
• A health care tax
• A cannabis dispensary tax
• A solid waste assessment fee
• A soft drink tax
• A tobacco tax

If your business operates in any of these industries or involves the sale of any of these goods, check with the State Tax Department to understand your tax and filing obligations.

Step 4: Prepare to file and pay your West Virginia small business taxes

At tax time, you’ll go to the West Virginia State Tax Department to file your tax returns and pay your tax bill. The State Tax Department’s e-File portal enables you to file your taxes and pay your bill all in one place.  You’ll need to have account and business information on hand to do so, which makes tracking expenses and income vital. Some records you may need to file your business taxes in West Virginia include:

• Your social security number and home address 
• Your business address and any organizational information like bylaws
• Your business’s employer identification number (EIN)
• Any invoices and sales records from the last year
• Your business’s expense records
• Your personal business expense records (if your business is a pass-through entity)
• Any relevant receipts

We can also help you keep track of invoices and manage your business finances with our ZenBusiness Money app. Paying vendors and knowing where your business records are has never been easier, especially at tax time.

Do I need an accountant?

Failure to file business taxes in West Virginia can result in serious penalties. You can get into just as much hot water for filing incorrect documents filled with bad calculations. Therefore, most small businesses need and use professional accounting help. In fact, nearly all small business owners hire accountants and tax preparers. To help business owners, the Internal Revenue Service (IRS) has posted a guide to understanding tax preparer qualifications on its website, which gives you an overview of tax preparer qualifications and certifications.

How we can help

We offer many tools to help West Virginia business owners maintain and grow their businesses. If you’re looking to track finances, our ZenBusiness Money App helps business owners manage invoices and send payments. The app allows you to easily send custom invoices, accept credit card and bank transfer payments, and manage your clients from an easy-to-use dashboard.

If your small business is still in the formation phase, our West Virginia LLC Formation Services or Corporation Formation Services can help you get started. Not sure how to stay compliant? Learn more about legal compliance for small business owners.