Complete Guide to West Virginia LLC Taxes in 2025
West Virginia offers LLC owners a straightforward and relatively affordable tax environment. The state imposes no entity-level tax on LLCs — meaning the LLC itself does not pay state taxes. Instead, LLC income passes through to members and is taxed at individual income tax rates ranging from 2.36% to 5.12% for the 2024 tax year (filed in 2025).
With an annual report fee of just $25 — one of the lowest in the nation — and no franchise tax, no gross receipts tax, and no separate business privilege tax for LLCs, West Virginia is an increasingly attractive state for small business owners. The state has also been aggressively cutting income tax rates in recent years, making it even more competitive.
West Virginia Income Tax Rates (2024 Tax Year, Filed 2025)
West Virginia uses a graduated income tax system. Your LLC's pass-through income is added to your personal income and taxed at these rates:
| Taxable Income | Tax Rate | Tax on Bracket |
|---|---|---|
| $0 — $10,000 | 2.36% | Up to $236 |
| $10,001 — $25,000 | 3.15% | $236 + 3.15% over $10K |
| $25,001 — $40,000 | 3.54% | $709 + 3.54% over $25K |
| $40,001 — $60,000 | 4.72% | $1,239 + 4.72% over $40K |
| Over $60,000 | 5.12% | $2,183 + 5.12% over $60K |
Rate Reduction Trend: West Virginia has been cutting income tax rates aggressively. The top rate was 6.5% as recently as 2022, dropped to 5.12% in 2024, and the legislature has signaled continued reductions. Keep an eye on HB 2526 and similar legislation for future rate cuts that could further benefit LLC owners.
No Entity-Level Tax on West Virginia LLCs
One of West Virginia's key advantages is that LLCs do not face any entity-level state tax. Unlike states such as California (which charges an $800 minimum franchise tax) or Texas (which imposes a franchise/margin tax), West Virginia only taxes LLC income when it passes through to individual members.
This means a multi-member LLC in West Virginia where all members are WV residents simply files an informational return, and each member reports their share of income on their personal WV income tax return (Form IT-140).
WV Sales Tax for LLCs
West Virginia imposes a 6% state sales tax with local municipalities able to add up to 1%, bringing the maximum combined rate to 7%. If your LLC sells taxable goods or services, you must:
- Register for a sales tax permit with the WV State Tax Department
- Collect sales tax at the point of sale
- Remit collected taxes on a monthly, quarterly, or annual basis
West Virginia taxes many services that other states exempt, including:
- Personal services (haircuts, dry cleaning, pet grooming)
- Professional services (some exceptions apply)
- Digital goods and streaming services
- Telecommunications
- Repair and maintenance services
Tip: West Virginia's broad sales tax base means more businesses must collect sales tax compared to other states. Review the WV State Tax Department's exemption list carefully to determine whether your specific services are taxable.
West Virginia LLC Annual Report
Every WV LLC must file an annual report with the Secretary of State:
- Fee: $25 — one of the cheapest in the nation
- Due date: April 1 each year
- Filing method: Online via the WV One Stop Business Portal
- Penalty: Failure to file may result in administrative dissolution
- Required info: Principal office address, registered agent, members/managers
West Virginia LLC Formation
Forming an LLC in West Virginia is straightforward and affordable:
- Articles of Organization filing fee: $100
- Registered agent: Required (must have WV physical address)
- Operating agreement: Recommended but not legally required
- EIN: Free from the IRS
- Business registration: Register with WV State Tax Department
- Processing time: 1-3 business days online
Federal Self-Employment Tax for WV LLC Owners
Regardless of your state, LLC members who actively participate in the business owe federal self-employment tax at 15.3% on 92.35% of net earnings. This includes:
- Social Security: 12.4% on earnings up to $176,100 (2025)
- Medicare: 2.9% on all earnings
- Additional Medicare: 0.9% on earnings above $200,000 (single)
You can deduct half of your self-employment tax as an above-the-line adjustment on your federal return, which also reduces your WV adjusted gross income.
Nonresident Members and WV Source Income
If your WV LLC has nonresident members, those members must file a West Virginia nonresident income tax return (Form IT-140NR) and pay WV tax on their share of WV-sourced income. The LLC may file a composite return on behalf of nonresident members, simplifying compliance.
West Virginia does not impose a formal withholding requirement on LLCs for nonresident members, but the state expects nonresidents to pay their tax through estimated payments or the composite return process.
Qualified Business Income (QBI) Deduction
WV LLC owners may qualify for the federal Section 199A QBI deduction, allowing a deduction of up to 20% of qualified business income. This deduction applies to your federal return only (not WV state). For 2025, the phase-out begins at $191,950 for single filers and $383,900 for joint filers.
WV Business & Occupation Tax (Utility/Production Only)
West Virginia has a Business & Occupation Tax, but unlike Washington's broad-based B&O tax, WV's version applies only to specific industries: public utilities, natural gas producers, and certain energy/mining companies. Most LLCs are not subject to this tax. If your LLC operates in energy extraction or utilities, you will need to register separately with the WV State Tax Department.
Key Tax Deadlines for WV LLCs
| Tax/Filing | Due Date | Filed With |
|---|---|---|
| Annual Report | April 1 | WV Secretary of State |
| WV Income Tax Return (IT-140) | April 15 | WV State Tax Dept. |
| Federal Income Tax Return | April 15 | IRS |
| Quarterly Estimated Tax (WV) | Apr 15, Jun 15, Sep 15, Jan 15 | WV State Tax Dept. |
| Quarterly Estimated Tax (Federal) | Apr 15, Jun 15, Sep 15, Jan 15 | IRS |
| Sales Tax Return | Monthly, quarterly, or annually | WV State Tax Dept. |
Tax Planning Tips for West Virginia LLCs
- Leverage declining rates: With WV rates continuing to drop, timing income recognition (where legally permissible) can result in lower state tax bills.
- Consider S-Corp election: If net LLC income exceeds $50,000, an S-Corp election can reduce self-employment tax by splitting income between salary and distributions.
- Maximize business deductions: Because WV taxes pass-through net income, every legitimate business deduction reduces both your federal and state tax bill.
- Make quarterly estimated payments: WV requires estimated tax payments if you expect to owe $600 or more. Avoid underpayment penalties by paying quarterly.
- Use retirement contributions: SEP-IRA or Solo 401(k) contributions reduce both federal and WV taxable income, providing a double tax benefit.
- Track the sales tax base: Many services are taxable in WV. Ensure you are collecting where required to avoid penalties and back taxes.
Comparing West Virginia to Neighboring States
| State | Top Income Tax Rate | Entity-Level Tax? | Annual LLC Fee |
|---|---|---|---|
| West Virginia | 5.12% | No | $25 |
| Virginia | 5.75% | No | $50 |
| Ohio | 3.5% | CAT (gross receipts) | $0 |
| Kentucky | 4.0% (flat) | LLET ($175 min) | $15 |
| Pennsylvania | 3.07% (flat) | No | $70 (decennial) |
| Maryland | 5.75% + county | No | $300 |
West Virginia's combination of declining income tax rates, no entity-level tax, and a $25 annual report makes it one of the most affordable states for LLC operation in the eastern US. While Pennsylvania has a lower flat rate, WV's all-in cost of compliance is remarkably low.
West Virginia Municipal Business & Occupation Taxes
Some West Virginia cities impose their own municipal Business & Occupation (B&O) taxes on businesses operating within city limits. These are separate from the state B&O tax and apply more broadly. Common municipal B&O tax rates range from 0.15% to 1% of gross receipts. Cities that impose this include Charleston, Huntington, and Wheeling. Check with your local city clerk's office to determine if your LLC owes a municipal B&O tax.
WV Workers' Compensation for LLCs with Employees
If your WV LLC has employees, you must carry workers' compensation insurance. West Virginia transitioned from a state-run monopoly to a competitive market in 2006, so you can shop for coverage from private insurers. LLC members can choose to cover themselves under the policy or exclude themselves. Rates vary by industry classification and payroll size.