BLUEFIELD, W.Va (WVVA) - WVVA is helping to answer your questions about small business. Joining us every Wed. at 5 p.m. is John O'Neal, the Executive Director of the Development Authority of Mercer County.
WVVA: this week we continue our new series for small business entitled "Advantage West Virginia." John, what is our focus this Wednesday?
O'Neal: When considering a relocation, an expansion, or a start-up, there are a number of factors that any business owner must consider. Among these are affordability, business climate, location, quality of life, workforce, and education.
Last week we discussed affordability. This week we will consider business climate. A legal definition of business climate would include the attitude of political, finance, and lending institutions toward business activity; the relationship between employers and labor groups; and tax, regulatory, and legal environments. West Virginia has improved significantly in these areas in recent years.
WVVA: What are some examples of an improving business climate?
O'Neal: For the last 20 years, there have been no new taxes imposed on business. Also, the West Virginia Workers Compensation system has been privatized, resulting in 14 consecutive years of lower premiums, saving more than $400,000,000, and making our state among the best in the nation in these rates.
More recently, the state's Corporate Net Income Tax was reduced from 9 to 6.5%, making it the lowest of our surrounding states. The Business Franchise Tax was eliminated.
These changes alone have reduced burdens on employers by nearly a billion dollars over the last eight years.
Significant legal and regulatory reforms, as well as passage of a right to work law, have contributed greatly to the improved perception of the Business Climate in West Virginia.
Another important factor is that the state has the third largest cash surplus in the nation, kept in what are called "Rainy Day Funds." This allows the state to weather any major financial crisis, like a pandemic, without having to impose new taxes. This is very important for a stable business environment.
All of these factors have contributed to West Virginia being ranked 19th best in the nation in the 2019 Tax Foundation Business Climate Index. This is better than all of our surrounding states.
So whether someone is considering relocating, expanding, or starting a new enterprise, the business climate in West Virginia should be considered as a positive factor.
Viewers should tune in each Wednesday at 5 p.m. for this new series, Advantage West Virginia.