Start a business in West Virginia
In a quarter where your West Virginia business earned nothing at all, Charleston still expects a return. That is the tell: the municipal Business & Occupation tax is not a licence fee that happens to scale, it is a quarterly tax on gross receipts, filed four times a year whether or not there were any. Add the city service fee — a flat weekly charge for every worker at a location in the city, which self-employed people pay on themselves — and West Virginia's local layer is heavier than its formation fees suggest. This page is about both, and about the refundable credit that gives half your equipment tax back.
West Virginia's state charges are small and finite: $100 to form, $30 for the Business Registration Certificate that you must hold before you trade, and $25 a year for the annual report each 30 June. Five years of that comes to $230 — among the cheapest in the region, and the LLC hub has the detail. The $100 formation fee is waived for veteran-owned businesses and for founders under 30; the $30 certificate never is.
The cities are where the real recurring cost sits, and they collect it in two ways that most founders have never encountered: a quarterly tax on revenue, and a weekly charge per head.
- Sales tax
- 6% state + 0% or 1% local · typically 7%
- Local income tax
- None
- State business licence
- Business Registration Certificate — $30
- Workers' comp from
- 1 employee
- Formation approved in
- Roughly 5–10 business days for standard online filings through the One Stop Business Portal
- First 90 days, all in
- $250–$1,000 · $130 of it to the state
Official portals: WV One Stop Business Portal · West Virginia Tax Division — MyTaxes · WV One Stop — Licences and Permits. Figures checked September 2026; the portal always wins.
The municipal B&O tax, quarter by quarter
Charleston, Huntington, Morgantown and Parkersburg all run Business & Occupation tax regimes, and the shape is the same: your gross receipts, sorted into classifications, each with its own rate. In Charleston the published rates are 1% for services and for all other businesses, 2% for contracting and 0.5% for retail.
Those look like small percentages until you remember what they are charged on. Gross receipts, not profit. A contractor turning over $300,000 in Charleston owes $6,000 in B&O whether the year cleared $60,000 or nothing.
| Classification | Rate on gross receipts | On $200,000 |
|---|---|---|
| Contracting | 2% | $4,000 |
| Services and all other businesses | 1% | $2,000 |
| Retail | 0.5% | $1,000 |
Two features make this different from the gross-receipts licence taxes in Georgia, South Carolina and Virginia, and both are worth internalising.
It is quarterly, and a dead quarter still files
Four returns a year, and a zero return is required even in a quarter with no activity at all. Miss the filing and you have a delinquency on a tax you did not owe. This is the single most common way a small West Virginia business ends up with a compliance problem.
It follows the work into the city
A business based outside city limits that performs work inside them is still liable for that city's B&O on those receipts. So a Cross Lanes contractor with a six-week job in Charleston has a Charleston filing obligation. Work in three cities and you file in three, each on its own quarterly cycle.
The city service fee: a weekly charge per head
Separate from B&O, and separate again from any state tax, some West Virginia cities levy a city service fee: a flat weekly amount for each person working at a location in the city. The employer withholds it from every full-time and part-time employee and remits it, and someone self-employed pays it on their own account.
Charleston's published overview puts the fee at $3 a week — around $156 a year per worker — but that document dates from 2018 and the current amount was not re-verified in this pass. Treat the $3 as the shape of the thing and get the current figure from the city before you budget from it.
What matters more than the exact number is the structure. It is flat, so it does not fall in a bad year. It is per worker, so it scales with headcount rather than revenue. And it reaches sole traders, which very few per-employee charges do — a one-person business working in the city pays it for itself.
The one certificate you cannot trade without
West Virginia is one of a small number of states where a general, state-issued certificate is genuinely compulsory rather than industry-specific. The Business Registration Certificate costs $30, comes from the Tax Division, and has to be in hand before the business opens. It is permanent — no renewal — unless the business relocates, closes, or the certificate is suspended, revoked or cancelled.
It also doubles as your sales tax registration, which is why the $30 is doing more work than it looks like it is. That is one form for two purposes, and it is genuinely one of the tidier arrangements in the region.
- Sales tax rate
- 6% state. 167 municipalities levy a municipal sales and use tax and every one of them charges exactly 1%, so the rate is a flat 7% inside those city limits and 6% outside them. No county rates, no arithmetic — two possible answers.
- Services are not automatically exempt
- West Virginia's sales tax reaches selected services as well as goods, which is further than most of its neighbours go. Check your own category on the Tax Division's guidance rather than assuming a service business is outside it.
- Where it is filed
- MyTaxes, the Tax Division's portal — the same account as the registration certificate.
- What it is not
- The certificate is not a licence for a regulated trade, and it is not a municipal B&O registration. Those are separate and neither substitutes for the other.
Half your equipment tax back, in cash
West Virginia is one of the states that still taxes business personal property — equipment and inventory — which is a cost several of its neighbours do not charge at all. The counterweight is unusually generous and unusually little known.
The Small Business Property Tax Adjustment Credit returns 50% of the personal property tax a business paid, as a refundable credit. Refundable is the important word: it is cash back, not a reduction in a tax bill you might not have. It is available to any business with $1,000,000 or less of aggregate appraised property, which covers essentially every business likely to be reading this page.
So the practical position is that West Virginia charges you for owning equipment and then gives half of it back if you claim it. Claiming it is the operative step — the Tax Division's TSD 456 sets out how, and a business that never files for it simply pays the full amount.
The personal income tax was also cut a further 5% for 2026 under SB 392, retroactive to 1 January, taking the top rate to 4.58%. Between the two, the state layer is moving in the right direction even as the municipal layer stays where it is.
Cover from the first employee, bought on the open market
Every West Virginia employer with an employee must carry workers' compensation. There is no headcount exemption at all — not the five that Alabama and Tennessee allow, not the four in Florida and South Carolina, not the three in Virginia, Georgia and North Carolina. One employee, one policy.
Since the market was deregulated, cover is bought from private insurers rather than from a state fund, so it is a quote to obtain rather than a form to file. Narrow statutory exemptions do exist and the Offices of the Insurance Commissioner's Employer Coverage Unit reviews applications for them under Informational Letter #201, but the specific exempt categories were not confirmed in this pass — do not plan around an exemption you have not had confirmed in writing.
Unemployment insurance registration goes to WorkForce West Virginia and is part of the One Stop Business Portal flow. The 2026 taxable wage base, new-employer rate and exact liability threshold were not confirmed here; WorkForce West Virginia publishes the current figures.
Worth holding all of it together before a first hire: in a city that levies both, one employee brings a workers' comp premium, a city service fee withheld weekly, and whatever their work adds to your quarterly B&O.
Common questions
What is the West Virginia B&O tax?
A municipal Business & Occupation tax on gross receipts, levied by cities rather than the state. Charleston's published rates are 1% for services and all other businesses, 2% for contracting and 0.5% for retail. Huntington, Morgantown and Parkersburg run their own regimes. It is filed quarterly, and a zero return is required even in a quarter with no activity.
Do I owe B&O in a city I do not have an office in?
You can. An out-of-city business that performs work inside city limits is liable for that city's B&O on those receipts. A contractor working jobs in three cities that levy it files in all three, each on its own quarterly cycle.
What is the city service fee?
A flat weekly charge for each person working at a location in the city, withheld by the employer from full-time and part-time employees and paid by self-employed people on their own account. Charleston's published overview puts it at $3 a week, but that document dates from 2018 and the current amount was not re-verified here — check with the city.
Do I need a Business Registration Certificate?
Yes. West Virginia is one of the few states where a general state-issued certificate is genuinely compulsory. It costs $30 from the Tax Division, must be in hand before the business opens, and is permanent unless the business relocates, closes, or the certificate is suspended, revoked or cancelled. It doubles as your sales tax registration.
What is the sales tax rate in West Virginia?
6% state, plus a 1% municipal rate in 167 municipalities — every one of which charges exactly 1%. So the rate is 7% inside those city limits and 6% elsewhere, with no county component. West Virginia taxes selected services as well as goods, so a service business should check its category rather than assume it is exempt.
Can I get any of the equipment tax back?
Yes. The Small Business Property Tax Adjustment Credit returns 50% of the business personal property tax paid as a refundable credit — actual cash — for any business with $1 million or less of aggregate appraised property. It has to be claimed; the Tax Division's TSD 456 explains how.
When do I need workers' compensation?
From the first employee. West Virginia has no small-employer headcount exemption of the kind every neighbouring state has. Cover is bought from private insurers since the market was deregulated. Narrow statutory exemptions exist and are reviewed by the Insurance Commissioner's Employer Coverage Unit, but the specific categories were not confirmed in this research pass.
Four quarters, however many cities.
Describe your business and Velofound lays out the West Virginia list — the registration certificate, the cities you owe B&O in, the 30 June report — beside a live website taking real card payments. Free to start.
Start free →