West Virginia LLC vs S Corp: Taxes, Fees and When the Election Pays

An LLC and an S corporation are not two competing legal structures. An LLC is a company you form with the West Virginia Secretary of State. An S corporation is a federal tax status, elected with the IRS, that a corporation or an LLC can hold. Most owners comparing the two want to know three things: what the state charges and taxes for each, whether the S election changes that, and whether the election saves enough to justify the extra work. This guide answers those questions with the state figures.

Disclaimer: This is informational content, not legal or tax advice. Your choice depends on your income, payroll, ownership and location. Talk with a qualified attorney and a CPA before you file an election.

The short answer

A West Virginia LLC is taxed as a pass-through by default. Profit flows to the owners, who report it on their personal returns at 2.11% to 4.58% for tax year 2026. A C corporation pays the 6.5% corporation net income tax on its own profit. An S corporation is generally treated as a pass-through for West Virginia income tax, so the 6.5% tax generally does not apply to it, but confirm that treatment with the State Tax Division. The S election does not change your state filing fees, city taxes or trade licenses. Its value is mostly a federal payroll question.

How each structure is taxed

LLC, the default pass-through

An LLC with more than one owner is taxed as a partnership for federal purposes unless it elects otherwise. A single-owner LLC is disregarded and reported on the owner's return. Either way, West Virginia has no state franchise tax (repealed in 2015), and the LLC pays no corporation net income tax. Owners pay personal income tax on their share of profit whether or not the money is distributed to them.

C corporation

A C corporation pays the 6.5% corporation net income tax on federal taxable income, apportioned by a single sales factor. Shareholders are then taxed again on dividends they receive, so profit can face two layers of tax. Most owner-operated businesses avoid C status unless they plan to raise outside investment or keep substantial earnings in the company.

S corporation

An S corporation is a corporation, or an LLC taxed as one, that has elected S status with the IRS. For federal purposes it passes profit through to its shareholders. For West Virginia income tax, shareholders generally report their share on the personal return at the same 2.11% to 4.58% rates. Electing S status does not create a new state entity type, so the state filings stay the same.

Fees you pay under either structure

State filing costs depend on the entity you form, not on the tax election. The figures below come from the Secretary of State and the State Tax Division.

Item	Agency	Cost	Notes
Articles of Organization (Form LLD-1)	Secretary of State	$100	Standard processing is 5 to 10 business days
Articles of Incorporation (Form CD-1)	Secretary of State	$100	Nonprofits use Form CD-1NP
Annual report, LLC	Secretary of State	$25	Filed January 1 to June 30; $75 after June 30 because of a $50 late fee
Annual report, corporation	Secretary of State	$25	For-profit late fee is $50
Business Registration Certificate	State Tax Division	$30	One time and permanent, one per fixed location
Name reservation	Secretary of State	$15	Holds the name for 120 days
Trade name (DBA), LLC or corporation	Secretary of State	$25	Plus a $1 online processing fee through the One Stop portal

Expedited service costs extra on top of the filing fee: $25 for same day or next business day, $250 for 2 hour service and $500 for 1 hour service. Online filings add a $1 portal processing fee. The first annual report is due in the calendar year after you register.

The registered agent is optional. West Virginia does not require a separate commercial agent, because the Secretary of State is appointed attorney-in-fact for every entity that files organizing documents. Form LLD-1 asks for an agent only 'if any'. If you name one, keep the record current, since changes are filed on Form AAO for $15. DBAs are filed with the Secretary of State, not county clerks, and individuals, sole proprietors and general partnerships pay no DBA fee.

What an S election changes and what it does not

The S election changes how profit and owner pay are treated for federal tax purposes. It does not change:

• Your entity on file. An LLC that elects S status is still an LLC and still files the $25 LLC annual report.
• The $30 Business Registration Certificate, which applies whatever the entity type or tax election.
• Municipal B&O tax and the weekly city service fee, which follow the business, not the entity.
• Trade licenses, which attach to the work you do.

Payroll is what can change. An S corporation owner who works in the business generally takes a salary subject to payroll tax, and the remaining profit may be paid as distributions that are not subject to the same payroll tax. Whether that produces a saving depends on the salary you can defend, your profit and federal rules. This is a federal question for your CPA to model, and this guide does not put a number on it.

The West Virginia pass-through entity election

West Virginia offers an elective pass-through entity (PTE) tax, reported on Form EPT-100. The business pays the tax at the entity level at the top individual rate, and each owner takes a credit for their share on their personal return. The rules that matter most:

• It is elective and made year by year. Electing for one year does not commit you for the next.
• Once the election is made for a year, it is irrevocable for that year.
• The rate is set in the 2026 EPT-100 instructions. Check those instructions before you quote or model a number. This guide does not state one.
• Its main appeal depends on federal treatment of the tax and on each owner's personal position. Model it with your CPA alongside the S election, not separately.

City taxes apply whatever structure you choose

West Virginia has no general statewide business license, and the state business and occupation (B&O) tax applies only to utilities. The gross receipts B&O tax that reaches shops, contractors and service firms is levied by cities under W. Va. Code 8-13-5. Cities levy it together with a city business license and a weekly per-worker city service fee. West Virginia has 55 counties and 230 incorporated places, and the city where you operate sets these charges, so confirm current rates with its clerk or treasurer.

Retail sales carry a second local layer. The state sales tax rate is 6%, and 101 municipalities add a 1% sales tax on top, rising to 107 from January 1, 2027. If you sell in one of those cities, the local rate affects your pricing and filings whichever entity you choose.

Licenses are the same for every entity

Registering with the Secretary of State is a filing, not a license. The nearest thing West Virginia has to a general business license is the $30 Business Registration Certificate from the State Tax Division. It is permanent until the business name, location or ownership changes, and you need a separate certificate for each fixed location. Trade licenses are separate and depend on the work:

• Contractor Licensing Board: required for residential work above $5,000 or commercial work above $25,000.
• State Fire Marshal: electricians.
• Division of Labor: plumbers and HVAC technicians.
• ABCA: alcohol.
• WVDA: cottage food, hemp, kratom and pesticides.

Each agency sets its own fees. Confirm the current cost on the agency page before you budget for it.

When the election pays: a decision test

Consider the S election only if most of these answers are yes:

1. The business earns enough profit that owner pay is a real share of it, not a small slice.
2. You work in the business full time, so the salary you take reflects genuine work.
3. You can run payroll for owner pay and keep the federal payroll filings it requires.
4. Your records can support a reasonable salary if the IRS asks.
5. Your CPA has modeled the federal payroll result, and the state PTE election if it applies, using the same numbers.

A profitable service firm with a full-time owner is the typical good fit. A new business with thin margins, a part-time owner, or a business whose main costs are city B&O and license fees is a weak fit, because those costs do not move with the election. City charges are the same under either structure, so they should never be the reason you elect S status.

Steps to take

1. Pick the entity. Form an LLC with Form LLD-1 or a corporation with Form CD-1 through the WV One Stop Business Portal. Standard processing takes 5 to 10 business days.
2. Get your $30 Business Registration Certificate from the State Tax Division for each fixed location.
3. Check city B&O, license and service fee requirements in every city where you operate.
4. Calendar the annual report for January 1 to June 30 each year, starting the year after you register.
5. If you are considering an S election or the PTE election, have a CPA model both before you make either one.

Bottom line

State filing fees are the same whether you choose an LLC or an S corporation, and city taxes follow the business. The real decision is whether the federal S election, which changes payroll treatment, is worth the added work for your situation, with the optional state PTE tax as a second question. Confirm the EPT-100 rate, city charges and trade fees on the official sites at sos.wv.gov/business and tax.wv.gov, and have an attorney and CPA review your plan before you file anything with the IRS or the state.

This article is informational only and is not legal or tax advice.