West Virginia LLC Taxes

Paying federal, state, and local taxes are an essential part of running a West Virginia limited liability company (LLC) — regardless of the size of your business.

In this article, you will learn about all applicable West Virginia LLC taxes, and as well as how to file them correctly in order to avoid fines and/or penalties.

Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes. 

How Is an LLC Taxed in West Virginia?

Taxation in West Virginia isn’t applied in the same way to all LLCs – instead, it varies depending on a number of factors, such as an LLC’s nature, locality, and tax election.

While LLCs typically benefit from pass-through taxation by default, they can elect to be taxed as one of the following:

• C Corporations: The LLC is treated as a separate entity to its owners, paying corporate income tax rates on its total profit while the owners also pay personal income taxes on any distributions they take.
• S Corporations: In return for paying owners a “reasonable salary,” the LLC’s remaining profits are distributed among members without a need to pay FICA or self-employment taxes on them.

The following sections go into the various tax responsibilities of your LLC at local, state, and federal levels in West Virginia to help you ensure your LLC navigates them effectively.

West Virginia Local Taxes

Municipalities in West Virginia have their own laws and tax regulations, which differ significantly from one place to another. 

Depending on where you live or do business, you may be subject to the following types of local taxes within the state:

Sales and Use Taxes

If your business plans to sell any goods or services in West Virginia, it’s worth noting that the sales and use tax rates it’s liable to collect can vary depending on the municipality it’s based in.

This is because municipalities in West Virginia are permitted to impose their own local rates (up to a maximum of 1.00%) that apply in addition to the statewide sales tax rate. While this allows the combined sales tax rate to reach up to as much as 7%, the average combined rate is 6.55%.

These local rates are chargeable on all sales made by your business within a municipality that are subject to West Virginia State sales tax.

Note: To get a better idea of the applicable sales and use tax rates in your local area, be sure to refer to the West Virginia Tax Division website.

Exceptions

While municipal sales and use taxes will apply to most items and services sold within a jurisdiction, it does not need to be paid in specific circumstances, such as if:

• Your customer provides a valid Certificate of Exemption for state sales tax. 
• You deliver or ship the items to a customer outside the city’s limits to a location that does not have municipal sales and use tax.
• You sell direct-to-home satellite services — in this case you are only required to pay state sales taxes. 
• You sell or lease motor vehicles, in which case you only need to pay the 5% DMV sales tax. 
• You sell or provide the use of motor fuels that are subject to the motor fuel excise taxes.

You can find more information on how municipal sales and use tax works in practice in the West Virginia Tax Division’s Tool Kit for Municipalities Imposing Sales and Use Taxes. 

Hotel Occupancy Tax

Hotel occupancy tax is a privilege tax administered by counties and municipalities in West Virginia that applies to any individual or business providing lodging for a fee, such as hotels, motels, resorts, cabins, campgrounds, and bed and breakfasts.

Since this tax is administered on a local level, different cities within West Virginia can apply it at different rates or with different exemptions. For example, Charleston imposes it at a rate of 6% in addition to the state and municipal sales taxes. 

Note: For a list of counties and their hotel occupancy tax rates, see the Contact List section of the West Virginia Tax Division’s Hotel Occupancy Tax page. 

Property Tax

In West Virginia, you’ll need to pay property tax for any real property (such as land and buildings) or tangible personal property (such as machinery, equipment, and inventory) that your LLC uses. However, since West Virginia does not have a uniform property tax that applies across the state, the amount your LLC will need to pay will vary based on where it’s located. 

This is because property taxes are based on a property’s assessed value and the levy rate, which are both unique to each county. To get a better idea of how much your business may need to pay in property tax, it’s a good idea to talk to either an accountant or your local county’s assessor.

Note: To find a list of assessors in each of West Virginia’s counties, you can use the County Assessors directory provided by the West Virginia Tax Division. 

Recommended Service: Schedule a free consultation with 1-800Accountant to ensure your business remains legally compliant.

West Virginia State Taxes

Every state has its own regulations and rules that dictate how it taxes individuals and businesses. Below is a list of the most relevant state-level taxes for LLCs in West Virginia. 

State Income Taxes

This group of taxes refers to the charges imposed by the state on the earnings of individuals and entities from business activity based in West Virginia. Depending on the tax structure of your LLC, it will either need to pay personal or corporate income taxes.

By default, the members of an LLC pay individual income tax on the distributions they get from the business’s net earnings. Individuals pay West Virginia income tax at a rate that varies between 3% and 6.5% depending on how much they earn. However, LLCs that opt to be taxed as C Corps are subject to a flat corporate income rate of 6.50% on their net earnings.

Understanding the nuances of your state income taxes is crucial for both individuals and corporations as they form a central part of your statewide tax responsibilities.

State Sales and Use Tax

West Virginia also imposes a statewide sales and use tax rate of 6% on most tangible goods and services sold or used within the state. However, as mentioned above, this can go up to as much as 7% if local sales and use taxes are included — as these vary between municipalities.

While most goods and services sold within the state are taxable, there are a few items that are exempt from the sales and use tax, such as:

• Prescription drugs and medical devices
• Food and food ingredients for home consumption
• Agricultural products and livestock
• Gasoline and motor fuel

Note: If your business is liable to pay sales and use tax, it will first need to obtain a seller’s permit from the West Virginia Tax Division. This allows you to collect these taxes from buyers, remit them to the state, and file monthly or quarterly returns. 

Severance Tax

West Virginia’s severance tax is a state-level tax that is imposed on businesses for the privilege of mining natural resources (e.g., coal, oil, natural gas, limestone, etc.). The tax is collected by the State Tax Commissioner and transferred into a special fund within the West Virginia State Treasurer’s Office. 

This tax applies to any person or business entity that engages in the activity of severing natural resources in West Virginia, regardless of their legal form. However, certain tax credits and exemptions are available depending on your LLC’s activities and investments. For example, severance taxpayers who invest in new or expanded manufacturing facilities in the state are eligible for a tax credit. 

Note: You can find more information about how much your business may owe in severance taxes on the West Virginia Tax Division’s page on Severance Tax. 

Fuel Tax

Fuel tax is imposed on businesses in West Virginia for the privilege of selling or using motor fuel within the state. This tax is levied at a gradual rate depending on the type and value of the fuel. For example, the fuel tax rate for gasoline and diesel is 35.7 cents per gallon, which consists of a flat rate component of 20.5 cents per gallon and a variable rate component based on the average wholesale price of the fuel.

Your LLC will be required to pay this tax if it engages in any of the following activities:

• Refining, supplying, importing, exporting, blending, or distributing motor fuel;
• Operating a terminal or a bulk transfer facility for motor fuel;
• Transporting motor fuel by pipeline, barge, rail, or truck; or
• Using untaxed or refunded motor fuel for highway vehicles.

If your LLC is liable to pay fuel tax, it will also be required to file monthly or annual reports and pay this tax by the last day of each month for the previous month. 

Note: For more information on the specifics of how fuel tax works in West Virginia, be sure to visit the Fuel Tax page of the West Virginia Tax Division website. 

Federal Taxes

Regardless of where your business is located, if you run an LLC in the US, there are a number of federal taxes you’ll need to pay. Below are some of the main types your LLC may be required to pay for federal tax purposes:

Income Tax

By default, the Internal Revenue Service (IRS) will not treat single and multi-member LLCs as a separate entity from you for tax purposes. What this means is that you’ll need to report your share of your LLC’s profits on your individual tax returns and pay federal income tax on them at the personal rate of your tax bracket.

Having said that, keep in mind that LLCs can also elect to be taxed as C corps or S corps, which changes how these taxes are levied in different ways.

Self-Employment Tax

In addition to income tax, members of single- and multi-member LLCs will need to pay self-employment tax on the share of the business’s profits that they report on their personal tax return at the end of the year.

This tax is levied at a flat rate of 15.3% against businesses with net earnings that exceed $400, though it is applied slightly differently to LLCs that have elected to be taxed as S corps or C corps.

Employment Tax

If your LLC hires any employees, it will need to withhold a portion of their salaries to cover various types of taxes on your employees’ behalf – including Social Security, Medicare (FICA), and payroll taxes.

Furthermore, the members of any LLCs that have elected to be taxed as an S corp will be required to pay employment taxes on their salaries. However, in return for this, the remainder of the business’s profit after these salaries have been distributed will be safe from both self-employment and FICA taxes.

Excise Tax

If your LLC engages in certain types of business (such as the sale of alcohol and tobacco or operating a heavy highway vehicle, among others), it may need to pay federal excise taxes in order to do so legally. Each excise tax comes with its own set of rules, rates, and filing obligations you’ll need to be aware of.

Understanding and fulfilling these federal tax obligations is crucial for keeping your LLC compliant and avoiding unnecessary financial penalties and/or fines.

How to File LLC Taxes in West Virginia

Below, we’ve outlined the general process an LLC in West Virginia will need to follow in order to file their tax return correctly. Note that the specificities of each step will vary slightly depending on how your LLC is organized and the specific locality it’s based in. 

Step 1: Gather Your Documentation

To ensure accurate tax filing, thorough record-keeping is essential. Begin by collecting your personal information, including:

• You and your partner’s Social Security number, date of birth, and residential address
• The previous year’s tax returns
• Your LLC’s Employer Identification Number (EIN)

Then, you’ll need to gather all documentation related to your business’s income, such as:

• Invoices you’ve issued
• Sales transaction logs
• Electronic payment reports from services like PayPal or Stripe

Lastly, assemble all records pertaining to your business expenses, which should cover:

• Lease receipts for your business premises
• Bills for utilities
• Records of office supplies purchases
• Documentation of business-related travel
• Payroll records for employees

Note: Depending on how your LLC is organized and its tax election, you may need different information for your tax return. 

Step 2: Find The Right Tax Forms

Once you've gathered all necessary documents, the next step is to select the correct tax forms for your LLC based on its organization:

• Single-Member LLCs: The business’s total income and expenses are reported on a Schedule C form, which is attached to the owner’s personal tax return and due by April 15 or the following business day if it lands on a weekend or holiday.
• Multi-Member LLCs: File an information return using Form 1065. Members must fill out a Schedule K-1 showing their individual earnings or losses by March 15 or the next business day.
• C Corporations: File a corporate tax return using Form 1120 by the April 15 deadline or on the next business day if it's a weekend or holiday.
• S Corporations: Use Form 1120-S for the corporate tax return and distribute Schedule K-1 forms to shareholders for reporting their shares of profits or losses. The deadline for filing taxes using 1120-S is March 15 or the following business day.

Since state and local taxes will have their own individual forms and requirements, we recommend contacting your municipality or hiring an accountant for guidance.

With the appropriate documentation gathered and the correct tax forms for your business entity on hand, you’ll be ready to fill them out and submit them.

Step 3: File Your Taxes

The majority of businesses choose electronic filing for its speed, enhanced security, and reliability compared to paper filing, which can be slower and more prone to errors. Here’s how it works:

• Federal Tax Returns: The IRS provides two electronic services for tax submission: Free File for businesses with an AGI below $72,000 and Free Fillable Forms for those above the threshold.
• State and Local Tax Returns: The filing requirements can change depending on the type of tax. You can use the West Virginia Tax Division’s MyTaxes to electronically file and report these different taxes.

Note: These electronic filing tools are best suited for those who are already confident in handling their LLC taxes as if filling out a paper form. 

For new business owners, we recommend opting for the expertise of a tax professional in order to ensure both accuracy and compliance in your tax filings. 

Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes. 

Keep Your West Virginia LLC Compliant

While LLCs are generally easier to maintain than corporations, there are certain state and local formalities your LLC must satisfy in order to remain compliant. 

West Virginia LLC Annual Report

West Virginia requires LLCs to file an annual report with the West Virginia Secretary of State to ensure it is kept up to date with important information regarding your business. 

The annual report is due by June 30 of each year, and the filing fee is $25. However, this fee is waived for veteran-owned registered entities for the first four years after the initial business formation. If you fail to file your report by this deadline, your LLC may suffer a penalty or even administrative dissolution.

Note: You can file your annual report online using the WV One Stop Business Portal. 

Licensure and Tax Requirements

In West Virginia, almost all businesses are required to obtain various licenses and permits at the local, state, and federal levels. Below, we’ve broken down three of the most common types your LLC may need:

• Sales Tax Licenses: If your LLC plans to sell or use tangible goods and some services within West Virginia, you need to obtain a sales tax license from the West Virginia Tax Division. 
• Professional Licenses: If your LLC plans to provide professional services that require certifications, licenses, or permits from the state, you’ll need to obtain a professional license from the appropriate licensing board. For example, if your LLC plans to offer real estate services, you need to obtain real estate licenses from the West Virginia Real Estate Commission (WVREC). 
• Environmental Permits: If your LLC engages in activities that affect the air, water, or land of the state, you may need to obtain environmental permits from the West Virginia Department of Environmental Protection (WVDEP). 

Note: For a full list of the statewide licenses and permits your LLC may need, please refer to the Occupational, Professional, and Special Licenses and Permits page provided by the WV One Stop Business Portal. 

West Virginia LLC Taxes FAQs