West Virginia has been cutting its personal income tax steadily. After the most recent 5% cut, retroactive to January 1, 2026, individuals pay 2.11% to 4.58%, compared with a 6.5% top rate in 2022. C corporations pay a flat 6.5%. Many cities also charge a business and occupation tax on gross receipts. The 6% sales tax is moderate, and LLC fees are low.
This guide covers West Virginia's business taxes for 2026, with worked examples and comparisons with its five neighbors.
West Virginia business taxes at a glance
A West Virginia C corporation pays a flat 6.5% on profit. Pass-through owners pay graduated personal rates that reach 4.58% above $60,000. Businesses in many cities, including Charleston, Huntington and Morgantown, pay municipal B&O tax on gross receipts. Customers pay 6% state sales tax plus up to 1% in cities. Businesses pay property tax on real estate and on equipment and inventory, though credits now offset tax on inventory and equipment for many. LLCs pay $100 to form and $25 a year.
Corporate income tax
| Item | 2026 |
|---|---|
| Corporate income tax rate | 6.5% flat |
- Apportionment: Single sales factor for most businesses since 2022.
- Combined reporting: Required for unitary groups.
- Credits: Manufacturing investment credit, strategic research and development credit, and credits against property tax on inventory, equipment and vehicles.
- Returns: Form CIT-120 is due on the 15th day of the fourth month after year-end.
Personal income tax and pass-through owners
| Taxable income (2026, approx.) | Rate |
|---|---|
| $0 to $10,000 | 2.11% |
| $10,000 to $25,000 | 2.81% |
| $25,000 to $40,000 | 3.16% |
| $40,000 to $60,000 | 4.22% |
| Over $60,000 | 4.58% |
- Rate cuts: A 21.25% cut in 2023, a further 4% cut in 2025 and the 5% cut under SB 392 for 2026.
- LLC owners, partners and sole proprietors pay these rates on profit.
- S corporation shareholders pay on their share.
- PTE election: Available, making state tax deductible federally.
Municipal business and occupation tax
| City | Typical rates |
|---|---|
| Charleston | About 0.3% to 0.5% for retail and services |
| Huntington | Varies by classification |
| Morgantown | Varies by classification |
- Gross receipts: Applies regardless of profit.
- City service fees: Some cities, such as Charleston, charge a weekly user fee on people working in the city.
- Municipal sales tax: Cities can add 1% sales tax, and some have reduced their B&O taxes in exchange.
Sales and use tax
| Component | Rate |
|---|---|
| State sales tax | 6% |
| Municipal sales tax | Up to 1% |
| Maximum combined rate | 7% |
- Groceries are exempt from the state rate.
- Services: Many services are taxable unless exempt, though professional services are excluded.
- Remote sellers with more than $100,000 of West Virginia sales or 200 transactions must collect.
Payroll and property taxes
- Unemployment insurance: Employers pay on the first $9,500 of each employee's wages.
- Property tax: Business real and personal property is taxed, including inventory and equipment. Since 2024, tax credits refund property tax on inventory, manufacturing equipment and business vehicles for many businesses.
Forming a business in West Virginia: fees and ongoing costs
| Item | LLC | Corporation |
|---|---|---|
| Formation filing fee | $100 | $100 |
| Annual report | $25 (due July 1) | $25 (due July 1) |
| Registered agent | Required | Required |
Worked example: $500,000 of profit
| Step | Amount |
|---|---|
| Taxable income | $500,000 |
| West Virginia corporate tax at 6.5% | $32,500 |
| Federal tax at 21% on $467,500 | $98,175 |
| Total income tax | $130,675 (26.1%) |
For a single LLC owner with $150,000 of West Virginia taxable income, state tax is about $6,073. At $75,000 it is about $2,638.
How West Virginia compares with its neighbors
| State | Corporate rate | Top personal rate | State sales tax |
|---|---|---|---|
| West Virginia | 6.5% | 4.58% | 6% |
| Ohio | None (CAT) | 2.75% plus municipal | 5.75% |
| Pennsylvania | 7.49% | 3.07% plus local | 6% |
| Maryland | 8.25% | 6.5% plus county | 6% |
| Virginia | 6% | 5.75% | 5.3% |
| Kentucky | 5% | 3.5% | 6% |
West Virginia's personal rates are now below Virginia's and Maryland's, though still above Ohio's, Pennsylvania's and Kentucky's flat taxes. Its corporate rate is in the middle of the region.
Choosing an entity in West Virginia
- LLC: $100 to form and $25 a year; owners pay up to 4.58%.
- S corporation: Same personal rates, federal payroll tax savings and the PTE election.
- C corporation: 6.5% plus 21% federally.
Because the top personal rate is now well below the corporate rate, pass-through treatment is usually cheaper at the state level.
West Virginia taxes by business type
Energy companies. Coal, natural gas and oil producers pay severance taxes, and natural gas production in the north of the state has grown sharply with the Marcellus and Utica shales.
Manufacturers. The property tax credits for equipment and inventory, together with the manufacturing investment credit, have lowered costs for manufacturers. Chemicals, metals and wood products are major industries.
Remote workers. The Ascend WV program offers cash incentives and outdoor recreation benefits to remote workers who move to certain towns.
Retailers in cities. Retailers in cities pay municipal B&O tax and collect the extra 1% municipal sales tax.
Doing business across West Virginia
Charleston, the capital, has state government, chemicals and health care. Morgantown is home to West Virginia University and a growing technology and health sector. Huntington is a river port near Ohio and Kentucky. The Eastern Panhandle, including Martinsburg, is part of the Washington, DC, commuter area, and residents there working in Maryland or Virginia benefit from reciprocity agreements, paying income tax only to West Virginia on their wages.
Tax planning tips for West Virginia businesses
Claim the property tax credits. Credits refund property tax on inventory, equipment and business vehicles for many businesses, but require filing a claim with the income tax return.
Check your municipal B&O exposure. Locating just outside a city can avoid B&O tax, though you may lose city services.
Elect the PTE tax. For profitable pass-through owners, the election makes state tax deductible federally.
Who pays the most in West Virginia
Energy producers pay a large share of West Virginia's taxes through severance taxes on coal and natural gas. City-based businesses pay municipal B&O on gross receipts, and workers in some cities pay weekly user fees. Corporations pay 6.5%, well above the rate most pass-through owners pay after the recent cuts. Consumers pay sales tax on many services as well as goods. Pass-through owners with moderate incomes and businesses outside cities pay comparatively little.
How West Virginia's income tax cuts add up
West Virginia's top personal rate was 6.5% in 2022. A 21.25% cut in 2023, a 4% cut in 2025 and the 5% cut for 2026 have brought it to about 4.58%. For an owner with $150,000 of taxable income, that's a saving of roughly $3,000 a year compared with 2022. State law includes triggers for further cuts if revenue grows, so rates may continue to fall.
Recent changes for 2025 and 2026
- Personal income tax cut 5% under SB 392, retroactive to 2026.
- Property tax credits for inventory, equipment and vehicles in effect.
- Single sales factor apportionment for most businesses.
Is West Virginia a good state for business?
Advantages
- Falling personal income tax rates
- Low formation and annual report fees
- Property tax relief for equipment and inventory
- Low costs and access to East Coast markets
Drawbacks
- Municipal B&O taxes on gross receipts
- Corporate rate higher than some neighbors
- Declining population and small labor market
- Rugged terrain and limited infrastructure
Compliance checklist
- File Articles of Organization or Incorporation with the Secretary of State.
- Register with the State Tax Department for sales tax, withholding and income tax.
- Register with your city for municipal B&O tax where required.
- Register with WorkForce West Virginia if you hire.
- File the annual report by July 1.
- File Form CIT-120, SPF-100 or IT-140 each year.
Compare West Virginia with its neighbors below or estimate your taxes in the United States calculator. See LLC taxes for more.