Senate Bill No. 540
(By Senators Helmick and McCabe)
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[Introduced March 11, 2009; referred to the Committee on
Finance.]
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A BILL to amend and reenact §11-6I-3 and §11-6I-5 of the Code of
West Virginia, 1931, as amended; to amend and reenact §11-
10-5e of said code; to amend said code by adding thereto a
new section, designated §11-10-25; to amend and reenact §11-
13Q-22 of said code; to amend and reenact §11-15-3c of said
code; to amend said code by adding thereto a new section,
designated §11-15-9m; to amend and reenact §11-21-21, §11-
21-22, §11-21-23 and §11-21-24 of said code; to amend and
reenact §11-24-3a and §11-24-4b of said code; and to amend
and reenact §21A-6-1c of said code, all relating to
taxation; specifying authority of the Tax Commissioner to
designate Tax Division documents that may be sent by
personal service, United States postal service, regular
mail, certified mail or registered mail or other means;
specifying statutory burden of proof and presumption against
tax exemptions; specifying inflation adjustment for certain
economic opportunity tax credit entitlement requirements;
specifying exclusion of sales and use of certain motor
vehicles and certain trailers and classes of vehicle and
vehicular apparatus from state consumers sales and use tax
on certain vehicles; specifying exclusion of sales and use
of certain motor vehicles and certain trailers and classes
of vehicle and vehicular apparatus from municipal and local
consumers sales and service tax and use tax, or special
downtown redevelopment district excise tax, or special
district excise tax and other sales taxes; authorizing
discretionary designation of per se exemptions from the
consumers sales and service tax and use tax by the Tax
Commissioner; specifying a technical correction; correcting
the reference to the licensing provision from chapter eleven
of said code to chapter seventeen-a of said code; specifying
exclusion of federal alternative minimum income taxpayers
from eligibility for property tax payment deferment and
assessor's denial of deferment; disqualifying persons who
pay the federal alternative minimum income tax in specified
years from qualification for the senior citizens' tax credit
under article twenty-one, chapter eleven of said code;
disqualifying persons who pay the federal alternative
minimum income tax in specified years from qualification for
the low-income family tax credit; disqualifying persons who
pay the federal alternative minimum income tax in specified years from qualification for the refundable tax credit for
real property taxes paid in excess of four percent of
income; specifying that senior citizen property tax relief
credit is not authorized for tax years beginning on or after
January 1, 2009; defining terms; specifying treatment of
certain income and deduction items for certain regulated
investment companies and real estate investment companies;
authorizing state income tax withholding from the
individual's payment of unemployment compensation; and
specifying effective dates.
Be it enacted by the Legislature of West Virginia:
That §11-6I-3 and §11-6I-5 of the Code of West Virginia,
1931, as amended, be amended and reenacted; that §11-10-5e of
said code be amended and reenacted; that said code be amended by
adding thereto a new section, designated §11-10-25; that §11-13Q-
22 of said code be amended and reenacted; that §11-15-3c of said
code be amended and reenacted; that said code be amended by
adding thereto a new section, designated §11-15-9m; that §11-21-
21, §11-21-22, §11-21-23 and §11-21-24 of said code be amended
and reenacted; that §11-24-3a and §11-24-4b of said code be
amended and reenacted; and that §21A-6-1c of said code be amended
and reenacted, all to read as follows:
CHAPTER 11. TAXATION
ARTICLE 6I. SENIOR CITIZEN PROPERTY TAX PAYMENT DEFERMENT ACT.
§11-6I-3. Property tax payment deferment.
(a) The following homesteads shall qualify for the deferment
provided in subsection
(b) (c) of this section:
(1) Any homestead owned by an owner sixty-five years of age
or older and used and occupied exclusively for residential
purposes by such owner; and
(2) Any homestead that:
(A) Is owned by an owner sixty-five years of age or older
who, as a result of illness, accident or infirmity, is residing
with a family member or is a resident of a nursing home, personal
care home, rehabilitation center or similar facility;
(B) Was most recently used and occupied exclusively for
residential purposes by the owner or the owner's spouse; and
(C) Has been retained by the owner for noncommercial
purposes.
(b) A homestead which is owned, in whole or in part, by any
person who is required to pay the federal alternative minimum
income tax in the current tax year, or who was required to pay
the federal alternative minimum income tax in the tax year
immediately preceding the current tax year, is disqualified from
the deferment provided in this article.
(b) (c) (1) For tax years commencing on or after January 1,
2009, the owner of a homestead meeting the qualifications set
forth in subsection (a) of this section may apply for a deferment
in the payment of the tax increment of ad valorem taxes assessed
under the authority of article three of this chapter on the homestead
: Provided, That the deferment may be authorized only
when the tax increment is the greater of $300 or ten percent or
more:
Provided, however, That all deferred taxes are not subject
to any rate of interest.
(2) In lieu of the deferment of the tax increment authorized
pursuant to this article, a taxpayer entitled to such deferment
may elect to instead apply the senior citizen property tax relief
credit authorized under section twenty-four, article twenty-one
of this chapter. Any taxpayer making such election shall be
fully subject to the terms and limitations set forth in section
twenty-four, article twenty-one of this chapter:
Provided, That,
for tax years beginning on and after January 1, 2009, no credit
shall be allowed under the provisions of this subdivision (2) or
under section twenty-four, article twenty-one of this chapter.
§11-6I-5. Determination; notice of denial of application for
deferment.
(a) The assessor shall, as soon as practicable after an
application for deferment is filed, review that application and
either approve or deny it. The assessor shall approve or
disapprove an application for deferment within thirty days of
receipt. Any application not approved or denied within thirty
days is deemed approved. If the application is denied, the
assessor shall promptly, but not later than January 1, serve the
owner with written notice explaining why the application was
denied and furnish a form for filing with the county commission,
should the owner desire to take an appeal. The notice required or
authorized by this section shall be served on the owner or his or
her authorized representative either by personal service or by
certified mail.
(b) In the event that the assessor has information
sufficient to form a reasonable belief that an owner, after
having been originally granted a deferment, is no longer eligible
for the deferment, he or she shall, within thirty days after
forming this reasonable belief, revoke the deferment and serve
the owner with written notice explaining the reasons for the
revocation and furnish a form for filing with the county
commission should the owner desire to take an appeal.
(c) The assessor shall deny any application made by or for
an owner who is required to pay the federal alternative minimum
income tax in the current tax year, or who was required to pay
the federal alternative minimum income tax in the tax year
immediately preceding the current tax year. The application may
contain an affirmation, prescribed by the Tax Commissioner,
whereby the applicant shall indicate whether the applicant is
required to pay the federal alternative minimum income tax in the
current tax year, or was required to pay the federal alternative
minimum income tax in the tax year immediately preceding the
current tax year. Failure to truthfully indicate whether the
applicant is required to pay the federal alternative minimum
income tax in the current tax year, and failure to indicate whether the applicant was required to pay the federal alternative
minimum income tax in the tax year immediately preceding the
current tax year shall be subject to the applicable penalties of
article nine of this chapter and article ten of this chapter.
ARTICLE 10. TAX PROCEDURE AND ADMINISTRATION ACT.
§11-10-5e. Service of notice.
Notwithstanding any other provision of this code, the Tax
Commissioner may designate those assessments, notices, statements
of account or other Tax Department documents which shall be sent
by personal service, or United States Postal Service regular
mail, or certified mail or registered mail, or by such other
means as the Tax Commissioner may determine, at the discretion of
the Tax Commissioner, pursuant to any provision of this chapter.
Notices of assessments and administrative decisions shall be
served upon the taxpayer either by personal or substituted
service or by certified mail. Service of notice by personal or
substituted service shall be valid if made by any method
authorized by Rule 4 of the West Virginia Rules of Civil
Procedure. Any service of notice addressed by United States
Postal Service regular mail is presumed to be accepted upon
mailing unless proven otherwise by the taxpayer. Any Service
service of notice by certified mail shall be valid if accepted by
the taxpayer, or if addressed to and mailed to the taxpayer's
usual place of business or usual place of abode or last known
address and accepted by any officer, partner, employee, spouse or
child of the taxpayer over the age of eighteen. Any notice
addressed and mailed in the above manner and accepted by any
person, shall be presumed to be accepted by such person unless
proven otherwise by the taxpayer.
Any notice addressed and mailed
in the above manner, and which is refused or not claimed, may
then be served by regular mail if such notice is subsequently
mailed by first class mail, postage prepaid, to the same address;
and date of posting in the United States mail shall be the date
of service.
§11-10-25. Taxpayer must show tax exemption applies;
presumption.
(a) The burden of proving that a tax exemption applies to
any tax administered by the Tax Commissioner shall be upon the
taxpayer. Tax exemptions administered by the Tax Commissioner
shall be strictly construed against the taxpayer and for the
payment of any applicable tax.
(b) To prevent evasion, it is presumed that a tax exemption
does not apply until the contrary is clearly established by clear
and convincing evidence.
ARTICLE 13Q. ECONOMIC OPPORTUNITY TAX CREDIT.
§11-13Q-22. Credit available for taxpayers which do not satisfy
the new jobs percentage requirement.
(a) Notwithstanding any provision of this article to the
contrary, a taxpayer engaged in one or more of the industries or
business activities specified in section nineteen of this article which does not satisfy the new jobs percentage requirement
prescribed in subsection (c), section nine, of this article, or
if the taxpayer is a small business as defined in section ten of
this article, does not create at least ten new jobs within twelve
months after placing qualified investment into service as
required by section ten of this article, but which otherwise
fulfills the requirements prescribed in this article, is
permitted to claim a credit against the taxes specified in
section seven of this article in the order so specified that are
attributable to and the consequence of the taxpayer's business
operations in this state, which result in the creation of net new
jobs. Credit under this section is allowed in the amount of
$3,000 per year, per new job created and filled by a new
employee; as those terms are defined in section three of this
article for a period of five consecutive years beginning in the
tax year when the new employee is first hired. In no case may
the number of new employees determined for purposes of this
section exceed the total net increase in the taxpayer's
employment in this state. Credit allowed under this section
shall be allowed beginning in the tax year when the new employee
is first hired:
Provided, That each new job:
(1) Pays at least $32,000 annually.
Beginning January 1,
2010, and on January 1 of each year thereafter, the commissioner
shall prescribe an amount that shall apply in lieu of the $32,000
amount during that calendar year. This amount is prescribed by
increasing the $32,000 figure by the cost-of-living adjustment
for that calendar year;
(2) Provides health insurance and may offer benefits
including child care, retirement or other benefits; and
(3) Is a full-time, permanent position, as those terms are
defined in section three, of this article.
Jobs that pay less than $32,000 annually,
or less than the
amount prescribed by the commissioner pursuant to subdivision (1)
of this subsection, whichever is higher, or that pay that salary
but do not also provide benefits in addition to the salary, do
not qualify for the credit authorized by this section. Jobs that
are less than full-time, permanent positions do not qualify for
the credit authorized by this section.
(b) For purposes of this section, the following definitions
apply:
(1) Cost-of-living adjustment. -- For purposes of subsection
(a), the cost-of-living adjustment for any calendar year is the
percentage (if any) by which the consumer price index for the
preceding calendar year exceeds the consumer price index for the
calendar year 2009.
(2) Consumer price index for any calendar year. -- For
purposes of subdivision (1) of this subsection, the consumer
price index for any calendar year is the average of the federal
consumer price index as of the close of the twelve-month period
ending on August 31 of that calendar year.
(3) Consumer price index. -- For purposes of subdivision (2)
above, the term "Federal Consumer Price Index" means the most
recent consumer price index for all urban consumers published by
the United States Department of Labor.
(4) Rounding. -- If any increase under subdivision (1) above
is not a multiple of $50, the increase shall be rounded to the
next lowest multiple of $50.
(b) (c) Unused credit remaining in any tax year after
application against the taxes specified in section seven of this
article is forfeited and does not carry forward to any succeeding
tax year and does not carry back to a prior tax year.
(c) (d) The tax credit authorized by this section may be
taken in addition to any credits allowable under articles
thirteen-c, thirteen-d, thirteen-e, thirteen-f, thirteen-g,
thirteen-j, thirteen-r or thirteen-s of this chapter.
(d) (e) Reduction in number of employees credit forfeiture.
If during the year when a new job was created for which credit
was granted under this section or during any of the next
succeeding four tax years thereafter, net jobs that are
attributable to and the consequence of the taxpayer's business
operations in this state, decrease, counting both new jobs for
which credit was granted under this section and preexisting jobs,
then the total amount of credit to which the taxpayer is entitled
under this section shall be decreased and forfeited in the amount
of $3,000 for each net job lost.
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
§11-15-3c. Imposition of consumer sales tax on motor vehicle
sales; rate of tax; use of motor vehicle purchased
out of state; definition of sale; definition of
motor vehicle; exemptions; collection of tax by
Department of Motor Vehicles; dedication of tax to
highways; legislative and emergency rules.
(a) Notwithstanding any provision of this article or article
fifteen-a of this chapter to the contrary, beginning on July 1,
2008, all motor vehicle sales to West Virginia residents shall be
subject to the consumer sales tax imposed by this article.
(b)
Rate of tax on motor vehicles. -- Notwithstanding any
provision of this article or article fifteen-a of this chapter to
the contrary, the rate of tax on the sale and use of a motor
vehicle shall be five percent of its sale price, as defined in
section two, article fifteen-b of this chapter:
Provided, That
so much of the sale price or consideration as is represented by
the exchange of other vehicles on which the tax imposed by this
section or section four, article three, chapter seventeen-a of
this code has been paid by the purchaser shall be deducted from
the total actual sale price paid for the motor vehicle, whether
the motor vehicle be new or used.
(c)
Motor vehicles purchased out of state. --
Notwithstanding this article or article fifteen-a to the contrary, the tax imposed by this section shall apply to all
motor vehicles, used as defined by section one, article fifteen-
a, of this chapter, within this state, regardless of whether the
vehicle was purchased in a state other than West Virginia.
(d)
Definition of sale. -- Notwithstanding any provision of
this article or article fifteen-a of this chapter to the
contrary, for purposes of this section "
sale", "
sales" or
"
selling" means any transfer or lease of the possession or
ownership of a motor vehicle for consideration, including
isolated transactions between individuals not being made in the
ordinary course of repeated and successive business and also
including casual and occasional sales between individuals not
conducted in a repeated manner or in the ordinary course of
repetitive and successive transactions.
(e)
Definition of motor vehicle. -- For purposes of this
section "
motor vehicle" means every propellable device in, or
upon which any person or property is or may be transported or
drawn upon a highway including but not limited to: automobiles;
buses; motor homes; motorcycles; motorboats; all-terrain
vehicles; snowmobiles; low speed vehicles; trucks, truck
tractors, and road tractors having a weight of less than fifty-
five thousand pounds; trailers, semitrailers, full trailers, pole
trailers, and converter gear having a gross weight of less than
two thousand pounds; and motorboat trailers, fold down camping
trailers, traveling trailers, house trailers, and motor homes;
except that the term
"motor vehicle" does not include: modular
homes, manufactured homes, mobile homes, similar nonmotive
propelled vehicles susceptible of being moved upon the highways
but primarily designed for habitation and occupancy; devices
operated regularly for the transportation of persons for
compensation under a certificate of convenience and necessity or
contract carrier permit issued by the Public Service Commission;
mobile equipment as defined in section one, article one, chapter
seventeen-a of this code; special mobile equipment as defined in
section one, article one, chapter seventeen-a of this code;
trucks, truck tractors, and road tractors having a gross weight
of fifty-five thousand pounds or more; trailers, semitrailers,
full trailers, pole trailers and converter gear, having weight of
two thousand pounds or greater:
Provided, That notwithstanding
the provisions of section nine, article fifteen, chapter eleven
of this code, the exemption from tax under this section for
mobile equipment as defined in section one, article one, chapter
seventeen-a of this code; special mobile equipment defined in
section one, article one, chapter seventeen-a of this code; Class
B trucks, truck tractors, and road tractors registered at a gross
weight of fifty-five thousand pounds or more; and Class C
trailers, semitrailers, full trailers, pole trailers and
converter gear, having weight of two thousand pounds or greater;
does not subject the sale or purchase of the vehicle to the
consumer sales and service tax imposed by section three of this article.
(f)
Exemptions. -- Notwithstanding any other provision of
this code to the contrary, the tax imposed by this section shall
not be subject to any exemption in this code other than the
following:
(1) The tax imposed by this section does not apply to any
passenger vehicle offered for rent in the normal course of
business by a daily passenger rental car business as licensed
under the provisions of article six-d,
of this chapter
seventeen-
a of this code. For purposes of this section, a daily passenger
car means a motor vehicle having a gross weight of eight thousand
pounds or less and is registered in this state or any other
state. In lieu of the tax imposed by this section, there is
hereby imposed a tax of not less than $1 nor more than $1.50 for
each day or part of the rental period. The Commissioner of Motor
Vehicles shall propose an emergency rule in accordance with the
provisions of article three, chapter twenty-nine-a of this code
to establish this tax.
(2) The tax imposed by this section does not apply where the
motor vehicle has been acquired by a corporation, partnership or
limited liability company from another corporation, partnership
or limited liability company that is a member of the same
controlled group and the entity transferring the motor vehicle
has previously paid the tax on that motor vehicle imposed by this
section. For the purposes of this section, control means
ownership, directly or indirectly, of stock or equity interests
possessing fifty percent or more of the total combined voting
power of all classes of the stock of a corporation or equity
interests of a partnership or limited liability company entitled
to vote or ownership, directly or indirectly, of stock or equity
interests possessing fifty percent or more of the value of the
corporation, partnership or limited liability company.
(3) The tax imposed by this section does not apply where
motor vehicle has been acquired by a senior citizen service
organization which is exempt from the payment of income taxes
under the United States Internal Revenue Code, Title 26 U.S.C.
§501(c)(3) and which is recognized to be a bona fide senior
citizen service organization by the Bureau of Senior Services
existing under the provisions of article five, chapter sixteen of
this code.
(4) The tax imposed by this section does not apply to any
active duty military personnel stationed outside of West Virginia
who acquires a motor vehicle by sale within nine months from the
date the person returns to this state.
(5) The tax imposed by this section does not apply to motor
vehicles acquired by registered dealers of this state for resale
only.
(6) The tax imposed by this section does not apply to motor
vehicles acquired by this state or any political subdivision
thereof, or by any volunteer fire department or duly chartered rescue or ambulance squad organized and incorporated under the
laws of this state as a nonprofit corporation for protection of
life or property.
(7) The tax imposed by this section does not apply to motor
vehicles acquired by an urban mass transit authority, as defined
in article twenty-seven, chapter eight of this code, or a
nonprofit entity exempt from federal and state income tax under
the Internal Revenue Code, for the purpose of providing mass
transportation to the public at large or designed for the
transportation of persons and being operated for the
transportation of persons in the public interest.
(8) The tax imposed by this section does not apply to the
registration of a vehicle owned and titled in the name of a
resident of this state if the applicant:
(A) Was not a resident of this state at the time the
applicant purchased or otherwise acquired ownership of the
vehicle;
(B) Presents evidence as the Commissioner of Motor Vehicles
may require of having titled the vehicle in the applicant's
previous state of residence;
(C) Has relocated to this state and can present such
evidence as the Commissioner of Motor Vehicles may require to
show bona-fide residency in this state;
and
(D) Presents an affidavit, completed by the assessor of the
applicant's county of residence, establishing that the vehicle
has been properly reported and is on record in the office of the
assessor as personal property; and
(E) (D) Makes application to the Division of Motor Vehicles
for a title and registration, and pays all other fees required by
chapter seventeen-a of this code within thirty days of
establishing residency in this state as prescribed in subsection
(a), section one-a of this article.
(9) On and after January 1, 2009, the tax imposed by this
section does not apply to Class B trucks, truck tractors, and
road tractors registered at a gross weight of fifty-five thousand
pounds or more, or to Class C trailers, semitrailers, full
trailers, pole trailers and converter gear, having a weight of
two thousand pounds or greater. If an owner of a vehicle has
previously titled the vehicle at a declared gross weight of
fifty-five thousand pounds or more and the title was issued
without the payment of the tax imposed by this section, then
before the owner may obtain registration for the vehicle at a
gross weight less than fifty-five thousand pounds, the owner
shall surrender to the commissioner the exempted registration,
the exempted certificate of title and pay the tax imposed by this
section based upon the current market value of the vehicle.
(10) The tax imposed by this section does not apply to
vehicles leased by residents of West Virginia. On or after
January 1, 2009, a tax is imposed upon the monthly payments for
the lease of any motor vehicle leased under a written contract of lease by a resident of West Virginia for a contractually
specified continuous period of more than thirty days, which tax
is equal to five percent of the amount of the monthly payment,
applied to each payment, and continuing for the entire term of
the initial lease period. The tax shall be remitted to the
Division of Motor Vehicles on a monthly basis by the lessor of
the vehicle. Leases of thirty days or less are taxable under the
provisions of this article and article fifteen-a of this chapter
without reference to this section.
(g)
Division of Motor Vehicles to collect.-- Notwithstanding
any provision of this article, article fifteen-a, and article ten
of this chapter to the contrary, the Division of Motor Vehicles
shall collect the tax imposed by this section:
Provided, That
such tax is imposed upon the monthly payments for the lease of
any motor vehicle leased by a resident of West Virginia, which
tax is equal to five percent of the amount of the monthly
payment, applied to each payment, and continuing for the entire
term of the initial lease period. The tax shall be remitted to
the Division of Motor Vehicles on a monthly basis by the lessor
of the vehicle.
(h)
Dedication of tax to highways. -- Notwithstanding any
provision of this article or article fifteen-a of this chapter to
the contrary, all taxes collected pursuant to this section, after
deducting the amount of any refunds lawfully paid, shall be
deposited in the state Road Fund in the State Treasury, and
expended by the Commissioner of Highways for design, maintenance
and construction of roads in the state highway system.
(i)
Legislative rules; emergency rules. -- Notwithstanding
any provision of this article, article fifteen-a, and article ten
to the contrary, the Commissioner of Motor Vehicles shall
promulgate legislative rules explaining and implementing this
section, which rules shall be promulgated in accordance with the
provisions of article three, chapter twenty-nine-a of this code
and should include a minimum taxable value and set forth
instances when a vehicle is to be taxed at fair market value
rather than its purchase price. The authority to promulgate
rules includes authority to amend or repeal those rules. If
proposed legislative rules for this section are filed in the
State Register before June 15, 2008, those rules may be
promulgated as emergency legislative rules, as provided in
article three of said chapter twenty-nine-a.
(j) Notwithstanding any other provision of this code,
effective January 1, 2009, no municipal sales or use tax or local
sales or use tax or special downtown redevelopment district
excise tax, or special district excise tax shall be imposed under
article twenty-two, chapter seven, or article thirteen, chapter
eight, or article thirteen-b, chapter eight, or article thirty
eight, chapter eight of this code, or any other provision of this
code, except this section, on sales of motor vehicles as defined
in this article or on any tangible personal property excepted or exempted from tax under this section. Nothing in this
subdivision shall be construed to prevent the application of the
municipal business and occupation tax on motor vehicle retailers
and leasing companies.
§11-15-9m. Discretionary designation of per se exemptions.
Notwithstanding any other provision of this code, the Tax
Commissioner may, by rule, specify those exemptions authorized in
this article or in other provisions of this code or applicable
federal law for which exemption certificates or direct pay
permits are not required.
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-21. Senior citizens' tax credit for property tax paid on
first $10,000 of taxable assessed value of a
homestead in this state; tax credit for property
tax paid on the first $20,000 of value for property
tax years after December 31, 2006.
(a)
Allowance of credit.--
(1) A low-income person who is allowed a $20,000 homestead
exemption from the assessed value of his or her homestead for ad
valorem property tax purposes, as provided in section three,
article six-b of this chapter, shall be allowed a refundable
credit against the taxes imposed by this article equal to the
amount of ad valorem property taxes paid on up to the first
$10,000 of taxable assessed value of the homestead for property
tax years that begin on or after January 1, 2003, except as
provided in subdivision (2) of this subsection.
(2) For tax years beginning on or after January 1, 2007, a
low-income person who is allowed a $20,000 homestead exemption
from the assessed value of his or her homestead for ad valorem
property tax purposes, as provided in section three, article six-
b of this chapter, shall be allowed a refundable credit against
the taxes imposed by this article equal to the amount of ad
valorem property taxes paid on up to the first $20,000 of taxable
assessed value of the homestead for property tax years that begin
on or after January 1, 2007:
Provided, That for tax years
beginning on and after January 1, 2009, any person who is
required to pay the federal alternative minimum income tax in the
current tax year, or who was required to pay the federal
alternative minimum income tax in the tax year immediately
preceding the current tax year is disqualified from receiving any
tax credit provided under this section.
(3) Due to the administrative cost of processing, the
refundable credit authorized by this section may not be refunded
if less than $10.
(4) The credit for each property tax year shall be claimed
by filing a claim for refund within three years after the due
date for the personal income tax return upon which the credit is
first available.
(b)
Terms defined. --
For purposes of this section:
(1) "
Low income" means federal adjusted gross income for the
taxable year that is one hundred fifty percent or less of the
federal poverty guideline for the year in which property tax was
paid, based upon the number of individuals in the family unit
residing in the homestead, as determined annually by the United
States Secretary of Health and Human Services.
(2) (A) For tax years beginning before January 1, 2007,
"
taxes paid" means the aggregate of regular levies, excess levies
and bond levies extended against not more than $10,000 of the
taxable assessed value of a homestead that are paid during the
calendar year determined after application of any discount for
early payment of taxes but before application of any penalty or
interest for late payment of property taxes for a property tax
year that begins on or after January 1, 2003, except as provided
in paragraph (B) of this subdivision.
(B) For tax years beginning on or after January 1, 2007,
"
taxes paid" means the aggregate of regular levies, excess levies
and bond levies extended against not more than $20,000 of the
taxable assessed value of a homestead that are paid during the
calendar year determined after application of any discount for
early payment of taxes but before application of any penalty or
interest for late payment of property taxes for a property tax
year that begins on or after January 1, 2007.
(c)
Legislative rule. --
The Tax Commissioner shall propose a legislative rule for
promulgation as provided in article three, chapter twenty-nine-a
of this code to explain and implement this section.
(d)
Confidentiality. --
The Tax Commissioner shall utilize property tax information
in the statewide electronic data processing system network to the
extent necessary for the purpose of administering this section,
notwithstanding any provision of this code to the contrary.
§11-21-22. Low-income family tax credit.
In order to eliminate West Virginia personal income tax on
families with incomes below the federal poverty guidelines and to
reduce the West Virginia personal income tax on families with
incomes that are immediately above the federal poverty
guidelines, there is hereby created a nonrefundable tax credit,
to be known as the low-income family tax credit, against the West
Virginia personal income tax. The low-income family tax credit
is based upon family size and the federal poverty guidelines.
and
The low-income tax credit reduces the tax imposed by the
provisions of this article on families with modified federal
adjusted gross income below or near the federal poverty
guidelines:
Provided, That for tax years beginning on and after
January 1, 2009, any person who is required to pay the federal
alternative minimum income tax in the current tax year, or who
was required to pay the federal alternative minimum income tax in
the tax year immediately preceding the current tax year is disqualified from receiving any tax credit provided under this
section.
§11-21-23. Refundable credit for real property taxes paid in
excess of four percent of income.
(a) For the tax years beginning on or after January 1, 2008,
any homeowner living in his or her homestead shall be allowed a
refundable credit against the taxes imposed by this article equal
to the amount of real property taxes paid in excess of four
percent of their income. If the refundable credit provided in
this section exceeds the amount of taxes imposed by this article,
the state Department of Revenue shall refund that amount to the
homeowner.
(b) Due to the administrative cost of processing, the
refundable credit authorized by this section may not be refunded
if less than $10.
(c) The credit for each property tax year shall be claimed
by filing a claim for refund within twelve months after the real
property taxes are paid on the homestead.
(d) For the purposes of this section:
(1) "
Gross household income"-- is defined as federal
adjusted gross income plus the sum of the following:
(A) Modifications in subsection (b), section twelve of this
article increasing federal adjusted gross income;
(B) Federal tax-exempt interest reported on federal tax
return;
(C) Workers' compensation and loss of earnings insurance;
and
(D) Nontaxable social security benefits; and
(2) For the tax years beginning before January 1, 2008,
"real property taxes paid" means the aggregate of regular levies,
excess levies and bond levies extended against the homestead that
are paid during the calendar year and determined after any
application of any discount for early payment of taxes but before
application of any penalty or interest for late payment of
property taxes for property tax years that begin on or after
January 1, 2008.
(e) A homeowner is eligible to benefit from this section or
section twenty-one of this article, whichever section provides
the most benefit as determined by the homeowner. No homeowner
may receive benefits under both this section and section twenty-
one of this article during the same taxable year.
For tax years
beginning on and after January 1, 2009, any person who is
required to pay the federal alternative minimum income tax in the
current tax year, or who was required to pay the federal
alternative minimum income tax in the tax year immediately
preceding the current tax year is disqualified from receiving any
tax credit provided under this section. Nothing in this section
denies those entitled to the homestead exemption provided in
section three, article six-b of this chapter.
(f) No homeowner may receive a refundable tax credit imposed by this article in excess of $1,000. This amount shall be
reviewed annually by the Legislature to determine if an
adjustment is necessary.
§11-21-24. Senior citizen property tax relief credit
not
authorized for tax years beginning on or after
January 1, 2009.
(a) Definitions. -- As used in this section, the following
terms shall have the meaning ascribed to them in this subsection,
unless the context in which the term is used clearly requires a
different meaning or a specific different definition is provided:
(1) "Assessed value" means the value of property as
determined under article three of this chapter.
(2) "Real property taxes paid" means, for the tax years
beginning on or after the first day January, two thousand nine,
the aggregate of regular levies, excess levies and bond levies
extended against the homestead that are paid during the calendar
year and determined after any application of any discount for
early payment of taxes but before application of any penalty or
interest for late payment of property taxes.
(3) "Senior citizen property tax relief tax credit" means
the tax credit authorized under this section.
(4) "Gross household income" means gross household income as
defined in section twenty-three of this article.
(5) "Homestead" means a homestead qualified for the
homestead property tax exemption authorized in article six-b of
this chapter, but limited to a single-family residential house,
including a mobile or manufactured or modular home, and the land,
not exceeding one acre, surrounding such structure that is owned
by the owner of the single-family residential house, including a
mobile or manufactured or modular home; or a mobile or
manufactured or modular home regardless of whether the land upon
which such mobile or manufactured or modular home is situated is
owned by another.
(6) "Owner" or "homeowner" means the person who is possessed
of the homestead, whether in fee or for life. A person seized or
entitled in fee subject to a mortgage or deed of trust shall be
considered the owner. A person who has an equitable estate of
freehold, or is a purchaser of a freehold estate who is in
possession before transfer of legal title shall also be
considered the owner. Personal property mortgaged or pledged
shall, for the purpose of taxation, be considered the property of
the party in possession.
(7) "Sixty-five years of age or older" includes a person who
attains the age of sixty-five on or before June 30 following the
July first assessment day.
(8) "Tax increment" means the increase of ad valorem taxes
assessed on the homestead, determined as the difference between
the ad valorem taxes assessed on the homestead for the current
tax year and the ad valorem taxes assessed on the homestead for
the tax year immediately preceding the tax year for which the taxpayer's application for tax credit specified in this section
is approved by the assessor, or otherwise finally approved in
accordance with the provisions of this article.
(9) "Tax year" means the property tax calendar year
following the July first assessment day.
(10) "Used and occupied exclusively for residential
purposes" means that the property is used as an abode, dwelling
or habitat for more than six consecutive months of the calendar
year prior to the date of application by the owner thereof; and
that subsequent to making application for tax credit, the
property is used only as an abode, dwelling or habitat to the
exclusion of any commercial use.
(b) Refundable credit. -- Subject to the requirements and
limitations of this section, for the tax years beginning on or
after January 1, two thousand nine, any homeowner having a gross
household income equal to or less than twenty-five thousand
dollars for the tax year, living in his or her homestead shall be
allowed a refundable credit against the taxes imposed by this
article equal to the amount of real property taxes paid that are
attributable to the tax increment of ad valorem taxes assessed
under the authority of article three of this chapter on the
homestead: Provided, That the gross household income shall be
adjusted annually in accordance with the consumer price index.
The credit shall be applied against the personal income tax in
the personal income tax year of the taxpayer when the property
tax increment was actually paid.
(1) Due to the administrative cost of processing, the
refundable credit authorized by this section may not be refunded
if less than ten dollars.
(2) The credit for each property tax year shall be claimed
by filing a claim for refund within twelve months after the real
property taxes are paid on the homestead.
(c) Notwithstanding the provisions of section twenty-one or
section twenty-three of this article , for property tax years
that begin on or after January, 2009, a homeowner is eligible to
benefit from this section, section twenty- one or twenty-three of
this article, whichever section provides the most benefit as
determined by the homeowner. No homeowner may receive benefits
under this section, section twenty-one or twenty- three of this
article during the same taxable year. Nothing in this section
shall be interpreted to deny any lawfully entitled taxpayer of
the homestead exemption provided in section three, article six-b
of this chapter.
(c) Qualification for credit. --
(1) The following homesteads shall qualify for the tax
credit provided in this section:
(A) Any homestead owned by an owner sixty-five years of age
or older and used and occupied exclusively for residential
purposes by such owner; and
(B) Any homestead that:
(I) Is owned by an owner sixty-five years of age or older
who, as a result of illness, accident or infirmity, is residing
with a family member or is a resident of a nursing home, personal
care home, rehabilitation center or similar facility;
(ii) Was most recently used and occupied exclusively for
residential purposes by the owner or the owner's spouse; and
(iii) Has been retained by the owner for noncommercial
purposes.
(2) (A) For tax years commencing on or after January 1, two
thousand nine, the owner of a homestead meeting the
qualifications set forth in subdivision (1) of this subsection
may apply for a tax credit in the amount of the tax increment of
ad valorem taxes assessed under the authority of article three of
this chapter on the homestead, subject to the limitations set
forth in this section: Provided, That the tax credit may be
authorized only when the tax increment is the greater of three
hundred dollars or ten percent or more.
(B) In lieu of the tax credit authorized under this section,
a taxpayer entitled to such credit may elect to instead apply the
deferment of the tax increment authorized pursuant to article
six-h of this chapter. Any taxpayer making such election shall be
fully subject to the terms and limitations set forth in article
six-h of this chapter.
(d) Application for tax credit; renewals; waiver of tax
credit. --
(1) General. -- No tax credit may be allowed under this
section unless an application for tax credit is filed with the
assessor of the county in which the homestead is located, on or
before November 1, following mailing of the tax ticket in which
the tax increment that is the subject of the application is
contained, such tax ticket being mailed pursuant to section
eight, article one, chapter eleven-a of this code. In the case of
sickness, absence or other disability of the owner, the
application may be filed by the owner or his or her duly
authorized agent.
(2) Renewals. -- After the owner has filed an application
for tax credit with his or her assessor, there shall be no need
for that owner to refile an application for the tax credit.
However, the taxpayer shall in all cases be required to file a
personal income tax return in order to claim the credit in any
tax year.
(e) Determination; notice of denial of application for tax
credit. --
(1) The assessor shall, as soon as practicable after an
application for tax credit is filed, review that application and
either approve or deny it. If the application is denied, the
assessor shall promptly, but not later than January 1, serve the
owner with written notice explaining why the application was
denied and furnish a form for filing with the county commission,
should the owner desire to take an appeal. The notice required or authorized by this section shall be served on the owner or his or
her authorized representative either by personal service or by
certified mail. The assessor shall approve or disapprove an
application for tax credit within thirty days of receipt. Any
application not approved or denied within thirty days is deemed
approved.
(2) In the event that the assessor has information
sufficient to form a reasonable belief that an owner, after
having been originally granted a tax credit, is no longer
eligible for the tax credit, he or she shall, within thirty days
after forming this reasonable belief, revoke the tax credit and
serve the owner with written notice explaining the reasons for
the revocation and furnish a form for filing with the county
commission should the owner desire to take an appeal.
(f) Appeals procedure. --
(1) Notice of appeal; thirty days. -- Any owner aggrieved by
the denial of his or her claim for application for tax credit or
the revocation of a previously approved tax credit may appeal to
the county commission of the county within which the property is
situated. All such appeals shall be filed within thirty days
after the owner's receipt of written notice of the denial of an
application or the revocation of a previously approved tax
credit, as applicable, pursuant to subsection (e) of this
section.
(2) Review; determination; appeal. -- The county commission
shall complete its review and issue its determination as soon as
practicable after receipt of the notice of appeal, but in no
event later than the twenty-eighth day of February following the
tax year for which the tax credit was sought. In conducting its
review, the county commission may hold a hearing on the
application. The assessor or the owner may apply to the circuit
court of the county for review of the determination of the county
commission in the same manner as is provided for appeals from the
county commission in section twenty-five, article three of this
chapter.
(g) Termination of tax credit. --
(1) Any tax credit approved in accordance with the
provisions of this section shall terminate immediately when any
of the following events occur:
(A) The death of the owner of the property for which the tax
credit was authorized;
(B) The sale of the property for which the tax credit was
approved; or
(C) A determination by the assessor that the property for
which the tax credit was approved no longer qualifies for the tax
credit in accordance with the provisions of this section.
(h) Forms, instructions and regulations. -- The Tax
Commissioner shall prescribe and supply all necessary
instructions and forms for administration of this section.
Additionally, the Tax Commissioner may propose rules for legislative approval in accordance with the provisions of article
three, chapter twenty- nine-a of this code as the Tax
Commissioner considers necessary for the implementation of this
section.
(I) Criminal penalties; restitution. --
(1) False or fraudulent claim for tax credit. -- Any owner
who willfully files a fraudulent application for tax credit and
any person who knowingly assisted in the preparation or filing of
such fraudulent application for tax credit or who knowingly
supplied information upon which the fraudulent application for
tax credit was prepared or allowed is guilty of a misdemeanor
and, upon conviction thereof, shall be fined not less than two
hundred fifty nor more than five hundred dollars, or imprisoned
in jail for not more than one year, or both fined and imprisoned.
(2) In addition to the criminal penalties provided above,
upon conviction of any of the above offenses, the court shall
order that the defendant make restitution unto this state for all
taxes not paid due to an improper tax credit, or continuation of
a tax credit, for the owner and interest thereon at the legal
rate until paid.
Notwithstanding the provisions of section three, article
six-I of this chapter or any other provision of this code, for
tax years beginning on and after January 1, 2009, no credit shall
be allowed under this section or under section three, article
six-I of this chapter.
ARTICLE 24. CORPORATION NET INCOME TAX.
§11-24-3a. Specific terms defined [Effective January 1, 2009].
(a) For purposes of this article:
(1) Aggregate effective rate of tax.-- The term "aggregate
effective rate of tax" shall mean the sum of the effective rates
of tax imposed by a state or U.S. possession or any combination
thereof on a related member.
(1) (2) Business income.-- The term "business income" means
income arising from transactions and activity in the regular
course of the taxpayer's trade or business and includes income
from tangible and intangible property if the acquisition,
management and disposition of the property or the rendering of
services in connection therewith constitute integral parts of the
taxpayer's regular trade or business operations and includes all
income which is apportionable under the Constitution of the
United States.
(3) Captive real estate investment trust. -- The term
"captive real estate investment trust" shall mean a real estate
investment trust the shares or beneficial interests of which:
(A) Are not regularly traded on an established securities
market and:
(B) Are more than fifty percent of the voting power or value
of the beneficial interests or shares of which are owned or
controlled, directly or indirectly, or constructively, by a
single entity that is:
(i) Treated as an association taxable as a corporation under
the Internal Revenue Code of 1986, as amended; and
(ii) Not exempt from federal income tax pursuant to the
provisions of Section 501(a) of the Internal Revenue Code of
1986, as amended.
(C) For purposes of applying subsection (2)(B)(i), the
following entities are not considered an association taxable as a
corporation:
(i) Any real estate investment trust as defined in paragraph
(31), other than a "captive real estate investment trust;" or
(ii) Any qualified real estate investment trust subsidiary
under Section 856(i) of the Internal Revenue Code of 1986, as
amended, other than a qualified real estate investment trust
subsidiary of a "captive real estate investment trust"; or
(iii) Any Listed Australian Property Trust (meaning an
Australian unit trust registered as a "Managed Investment Scheme"
under the Australian Corporations Act in which the principal
class of units is listed on a recognized stock exchange in
Australia and is regularly traded on an established securities
market), or an entity organized as a trust, provided that a
Listed Australian Property Trust owns or controls, directly or
indirectly, seventy-five percent or more of the voting power or
value of the beneficial interests or shares of such trust; or
(iv) Any Qualified Foreign Entity, meaning a corporation,
trust, association or partnership organized outside the laws of
the United States and which satisfies the following criteria:
(1) At least seventy-five percent of the entity's total
asset value at the close of its taxable year is represented by
real estate assets (as defined in Section 856(c)(5)(B) of the
Internal Revenue Code of 1986, as amended, thereby including
shares or certificates of beneficial interest in any real estate
investment trust), cash and cash equivalents, and U.S. Government
securities;
(2) The entity is not subject to tax on amounts distributed
to its beneficial owners, or is exempt from entity-level
taxation;
(3) The entity distributes at least eighty-five percent of
its taxable income (as computed in the jurisdiction in which it
is organized) to the holders of its shares or certificates of
beneficial interest on an annual basis;
(4) Not more than ten percent of the voting power or value
in such entity is held directly or indirectly or constructively
by a single entity or individual, or the shares or beneficial
interests of such entity are regularly traded on an established
securities market; and
(5) The entity is organized in a country which has a tax
treaty with the United States.
(D) A real estate investment trust that is intended to be
regularly traded on an established securities market, and that
satisfies the requirements of Section 856(a)(5) and (6) of the U.S. Internal Revenue Code by reason of Section 856(h)(2) of the
Internal Revenue Code shall not be deemed a captive real estate
investment trust within the meaning of this section.
(E) A real estate investment trust that does not become
regularly traded on an established securities market within one
year of the date on which it first becomes a real estate
investment trust shall be deemed not to have been regularly
traded on an established securities market, retroactive to the
date it first became a real estate investment trust, and shall
file an amended return reflecting such retroactive designation
for any tax year or part year occurring during its initial year
of status as a real estate investment trust. For purposes of
this section, a real estate investment trust becomes a real
estate investment trust on the first day that it has both met the
requirements section 856 of the Internal Revenue Code and has
elected to be treated as a real estate investment trust pursuant
to section 856(c)(1) of the Internal Revenue Code.
(2) Business income. (4) Combined group.-- The term
"Combined group" means the group of all persons whose income and
apportionment factors are required to be taken into account
pursuant to subsection
(a) or (b) (j) or (k), section thirteen-a
of this article in determining the taxpayer's share of the net
business income or loss apportionable to this state.
(3) (5) Commercial domicile.-- The term "commercial
domicile" means the principal place from which the trade or
business of the taxpayer is directed or managed:
Provided, That
the commercial domicile of a financial organization, which is
subject to regulation as such, shall be at the place designated
as its principal office with its regulating authority.
(4) (6) Compensation.-- The term "compensation" means wages,
salaries, commissions and any other form of remuneration paid to
employees for personal services.
(5) (7) Corporation. -- "Corporation" means any corporation
as defined by the laws of this state or organization of any kind
treated as a corporation for tax purposes under the laws of this
state, wherever located, which if it were doing business in this
state would be subject to the tax imposed by this article. The
business conducted by a partnership which is directly or
indirectly held by a corporation shall be considered the business
of the corporation to the extent of the corporation's
distributive share of the partnership income, inclusive of
guaranteed payments to the extent prescribed by regulation. The
term "corporation" includes a joint-stock company and any
association or other organization which is taxable as a
corporation under the federal income tax law.
(6) (8) Delegate.-- The term "delegate" in the phrase "or
his or her delegate," when used in reference to the Tax
Commissioner, means any officer or employee of the State Tax
Department duly authorized by the Tax Commissioner directly, or
indirectly by one or more redelegations of authority, to perform the functions mentioned or described in this article or
regulations promulgated thereunder.
(7) (9) Domestic corporation.-- The term "domestic
corporation" means any corporation organized under the laws of
West Virginia and certain corporations organized under the laws
of the state of Virginia before June 20, 1863. Every other
corporation is a foreign corporation.
(10) Effective rate of tax. -- The term "effective rate of
tax" means, as to any state or U.S. possession, the maximum
statutory rate of tax imposed by the state or possession on a
related member's net income multiplied by the apportionment
percentage, if any, applicable to the related member under the
laws of said jurisdiction. For purposes of this definition, the
effective rate of tax as to any state or U.S. possession is zero
where the related member's net income tax liability in said
jurisdiction is reported on a combined or consolidated return
including both the taxpayer and the related member where the
reported transactions between the taxpayer and the related member
are eliminated or offset. Also, for purposes of this definition,
when computing the effective rate of tax for a jurisdiction in
which a related member's net income is eliminated or offset by a
credit or similar adjustment that is dependent upon the related
member either maintaining or managing intangible property or
collecting interest income in that jurisdiction, the maximum
statutory rate of tax imposed by said jurisdiction shall be
decreased to reflect the statutory rate of tax that applies to
the related member as effectively reduced by such credit or
similar adjustment.
(8) (11) Engaging in business. -- The term "engaging in
business" or "doing business" means any activity of a corporation
which enjoys the benefits and protection of government and laws
in this state.
(9) (12) Federal Form 1120. -- The term "Federal Form 1120"
means the annual federal income tax return of any corporation
made pursuant to the United States Internal Revenue Code of 1986,
as amended, or in successor provisions of the laws of the United
States, in respect to the federal taxable income of a
corporation, and filed with the federal Internal Revenue Service.
In the case of a corporation that elects to file a federal income
tax return as part of an affiliated group, but files as a
separate corporation under this article, then as to such
corporation Federal Form 1120 means its pro forma Federal Form
1120.
(10) (13) Fiduciary. -- The term "fiduciary" means, and
includes, a guardian, trustee, executor, administrator, receiver,
conservator or any person acting in any fiduciary capacity for
any person.
(11) (14) Financial organization. -- The term "financial
organization" means:
(A) A holding company or a subsidiary thereof. As used in this section "holding company" means a corporation registered
under the federal Bank Holding Company Act of 1956 or registered
as a savings and loan holding company other than a diversified
savings and loan holding company as defined in Section
408(a)(1)(F) of the federal National Housing Act,
12 U. S. C. §
1730(a)(1)(F);
(B) A regulated financial corporation or a subsidiary
thereof. As used in this section "regulated financial
corporation" means:
(i) An institution, the deposits, shares or accounts of
which are insured under the Federal Deposit Insurance Act or by
the federal Savings and Loan Insurance Corporation;
(ii) An institution that is a member of a federal home loan
bank;
(iii) Any other bank or thrift institution incorporated or
organized under the laws of a state that is engaged in the
business of receiving deposits;
(iv) A credit union incorporated and organized under the
laws of this state;
(v) A production credit association organized under 12 U. S.
C. § 2071;
(vi) A corporation organized under
12 U. S. C. § 611 through
§ 631 (an Edge Act corporation); or
(vii) A federal or state agency or branch of a foreign bank
as defined in
12 U. S. C. § 3101; or
(C) A corporation which derives more than fifty percent of
its gross business income from one or more of the following
activities:
(i) Making, acquiring, selling or servicing loans or
extensions of credit. Loans and extensions of credit include:
(I) Secured or unsecured consumer loans;
(II) Installment obligations;
(III) Mortgages or other loans secured by real estate or
tangible personal property;
(IV) Credit card loans;
(V) Secured and unsecured commercial loans of any type; and
(VI) Loans arising in factoring.
(ii) Leasing or acting as an agent, broker or advisor in
connection with leasing real and personal property that is the
economic equivalent of an extension of credit as defined by the
Federal Reserve Board in
12 CFR 225.25(b)(5).
(iii) Operating a credit card business.
(iv) Rendering estate or trust services.
(v) Receiving, maintaining or otherwise handling deposits.
(vi) Engaging in any other activity with an economic effect
comparable to those activities described in subparagraph (
I)
(i),
(ii), (iii), (iv) or (v) of this paragraph.
(12) (15) Fiscal year. -- The term "fiscal year" means an
accounting period of twelve months ending on any day other than
the last day of December and on the basis of which the taxpayer is required to report for federal income tax purposes.
(13) (16) Includes and including. -- The terms "includes"
and "including," when used in a definition contained in this
article, do not exclude other things otherwise within the meaning
of the term being defined.
(14) (17) Insurance company. -- The term "insurance company"
means any corporation subject to taxation under section twenty-
two, article three, chapter twenty-nine of this code or chapter
thirty-three of this code or an insurance carrier subject to the
surcharge imposed by subdivision (1) or (3), subsection (f),
section three, article two-c, chapter twenty-three of this code
or any corporation that would be subject to taxation under any of
those provisions were its business transacted in this state.
(18) Intangible expense. -- The term "intangible expense"
includes: (A) Expenses, losses and costs for, related to, or in
connection directly or indirectly with the direct or indirect
acquisition, use, maintenance or management, ownership, sale,
exchange or any other disposition of intangible property to the
extent such amounts are allowed as deductions or costs in
determining taxable income before operating loss deductions and
special deductions for the taxable year under the Internal
Revenue Code; (B) amounts directly or indirectly allowed as
deductions under section 163 of the Internal Revenue Code for
purposes of determining taxable income under the Internal Revenue
Code to the extent such expenses and costs are directly or
indirectly for, related to, or in connection with the expenses,
losses and costs referenced in (A); (C) losses related to, or
incurred in connection directly or indirectly with, factoring
transactions or discounting transactions; (D) royalty, patent,
technical and copyright fees; (E) licensing fees; and (F) other
similar expenses and costs.
(19) Intangible property. -- "Intangible property" includes
patents, patent applications, trade names, trademarks, service
marks, copyrights, mask works, trade secrets and similar types of
intangible assets.
(20) Interest expense. -- "Interest expense" means amounts
directly or indirectly allowed as deductions under section 163 of
the Internal Revenue Code for purposes of determining taxable
income under the Internal Revenue Code.
(15) (21) "
Internal Revenue Code" means the Internal Revenue
Code as defined in section three of this article,
as amended and
in effect for the taxable year and without regard to application
of federal treaties unless expressly made applicable to states of
the United States.
(16) (22) Nonbusiness income.-- The term "nonbusiness
income" means all income other than business income.
(23) Ownership. -- In determining the ownership of stock,
assets, or net profits of any person, the constructive ownership
of Section 318(a) of the Internal Revenue Code of 1986, as
amended, as modified by Section 856(d)(5) of the Internal Revenue Code of 1986, as amended, shall apply.
(17) (24) "
Partnership" means a general or limited
partnership or organization of any kind treated as a partnership
for tax purposes under the laws of this state.
(18) (25) Person.-- The term "person" is considered
interchangeable with the term "corporation" in this section. The
term "person" means any individual, firm, partnership, general
partner of a partnership, limited liability company, registered
limited liability partnership, foreign limited liability
partnership, association, corporation whether or not the
corporation is, or would be if doing business in this state,
subject to the tax imposed by this article, company, syndicate,
estate, trust, business trust, trustee, trustee in bankruptcy,
receiver, executor, administrator, assignee or organization of
any kind.
(19) (26) Pro forma return. -- The term "pro forma return"
when used in this article means the return which the taxpayer
would have filed with the Internal Revenue Service had it not
elected to file federally as part of an affiliated group.
(20) (27) Public utility. -- The term "public utility" means
any business activity to which the jurisdiction of the Public
Service Commission of West Virginia extends under section one,
article two, chapter twenty-four of this code.
(21) Qualified real estate investment trust. - The term
"Qualified Real Estate Investment Trust" means any real estate
invest trust where no single entity owns or controls, directly or
indirectly, constructively or otherwise, fifty percent or more of
the voting power or value of the beneficial interests or shares
of the trust, if the single entity is:
(A) Subject to the provisions of subchapter C, chapter 1,
subtitle A, title 26 of the United States Code, as amended;
(B) Not exempt from federal income tax pursuant to the
provisions of Section 501 of the Internal Revenue Code of 1986,
as amended; and
(C) Not a real estate invest trust as defined in this
section or a qualified real estate invest trust subsidiary under
Section 856(I) of the Internal Revenue Code of 1986, as amended.
(22) (28) Qualified regulated investment company.-- The term
"Qualified Regulated Investment Company" means any regulated
investment company
where no single entity owns or controls, other
than a regulated investment company more than fifty percent of
the voting power or value of the beneficial interests or share of
which are owned or controlled, directly or indirectly,
constructively or otherwise,
fifty percent or more of the voting
power or value of the beneficial interests or shares of the
company, if the by a single entity
that is:
(A) Subject to the provision of subchapter C, chapter 1,
subtitle A, title 26 of the United States Code, as amended;
(B) Not exempt from federal income tax pursuant to the
provision of
Section 501 of the Internal Revenue Code of 1986, as amended; and
(C) Not a regulated investment company as defined in Section
3 of the Investment Company Act of 1940, as amended, 15 U.S.C.
80a-3.
(23) (29) Real estate investment trust.-- The term "real
estate investment trust" has the meaning ascribed to such term in
Section 856 of the Internal Revenue Code of 1986, as amended.
(24) (30) Regulated investment company.-- The term
"regulated investment company" has the same meaning as ascribed
to such term in
Section 851 of the Internal Revenue Code of 1986,
as amended.
(31) Related entity. -- "Related entity" means: (A) A
stockholder who is an individual, or a member of the
stockholder's family set forth in section 318 of the Internal
Revenue Code if the stockholder and the members of the
stockholder's family own, directly, indirectly, beneficially or
constructively, in the aggregate, at least fifty per cent of the
value of the taxpayer's outstanding stock; (B) a stockholder, or
a stockholder's partnership, limited liability company, estate,
trust or corporation, if the stockholder and the stockholder's
partnerships, limited liability companies, estates, trusts and
corporations own directly, indirectly, beneficially or
constructively, in the aggregate, at least fifty per cent of the
value of the taxpayer's outstanding stock; or (C) a corporation,
or a party related to the corporation in a manner that would
require an attribution of stock from the corporation to the party
or from the party to the corporation under the attribution rules
of the Internal Revenue Code if the taxpayer owns, directly,
indirectly, beneficially or constructively, at least fifty
percent of the value of the corporation's outstanding stock. The
attribution rules of the Internal Revenue Code shall apply for
purposes of determining whether the ownership requirements of
this definition have been met.
(32) Related member. -- "Related member" means a person
that, with respect to the taxpayer during all or any portion of
the taxable year, is: (A) A related entity, (B) a component
member as defined in subsection (b) of section 1563 of the
Internal Revenue Code; (C) a person to or from whom there is
attribution of stock ownership in accordance with subsection (e)
of section 1563 of the Internal Revenue Code; or (D) a person
that, notwithstanding its form or organization, bears the same
relationship to the taxpayer as a person described in (A) to (C),
inclusive.
(25) (33) Sales.-- The term "sales" means all gross
receipts of the taxpayer that are "business income" as defined in
this section.
(26) (34) State.-- The term "state" means any state of the
United States, the District of Columbia, the Commonwealth of
Puerto Rico, any territory or possession of the United States and
any foreign country or political subdivision thereof.
(28) (35) Tax.-- The term "tax" includes, within its
meaning, interest and additions to tax, unless the intention to
give it a more limited meaning is disclosed by the context.
(27) (36) Taxable year, tax year. -- The term "taxable year"
or "tax year" means the taxable year for which the taxable income
of the taxpayer is computed under the federal income tax law.
(29) (37) Tax Commissioner.-- The term "Tax Commissioner"
means the Tax Commissioner of the State of West Virginia or his
or her delegate.
(30) (38) "
Tax haven."-- means a jurisdiction that, for a
particular tax year in question: (A) Is identified by the
Organization for Economic Cooperation and Development as a tax
haven or as having a harmful preferential tax regime; or (B) a
jurisdiction that has no, or nominal, effective tax on the
relevant income and: (i) That has laws or practices that
prevent effective exchange of information for tax purposes with
other governments regarding taxpayers subject to, or benefitting
from, the tax regime; (ii) that lacks transparency, for purposes
of this definition, a tax regime lacks transparency if the
details of legislative, legal or administrative provisions are
not open to public scrutiny and apparent or are not consistently
applied among similarly situated taxpayers; (iii) facilitates the
establishment of foreign-owned entities without the need for a
local substantive presence or prohibits these entities from
having any commercial impact on the local economy; (iv)
explicitly or implicitly excludes the jurisdiction's resident
taxpayers from taking advantage of the tax regime's benefits or
prohibits enterprises that benefit from the regime from operating
in the jurisdiction's domestic market; or (v) has created a tax
regime which is favorable for tax avoidance, based upon an
overall assessment of relevant factors, including whether the
jurisdiction has a significant untaxed offshore financial or
other services sector relative to its overall economy. For
purposes of this definition, the phrase "tax regime" means a set
or system of rules, laws, regulations or practices by which taxes
are imposed on any person, corporation or entity, or on any
income, property, incident, indicia or activity pursuant to
governmental authority.
(31) (39) Taxpayer. -- The term "taxpayer" means any person
subject to the tax imposed by this article.
(32) (40) This code. -- The term "this code" means the Code
of West Virginia, 1931, as amended.
(33) (41) This state. -- The term "this State" means the
State of West Virginia.
(34) (42) "
United States."-- means the United States of
America and includes all of the states of the United States, the
District of Columbia and United States territories and
possessions.
(35) (43) "
Unitary business." -- means a single economic
enterprise that is made up either of separate parts of a single business entity or of a commonly controlled group of business
entities that are sufficiently interdependent, integrated and
interrelated through their activities so as to provide a synergy
and mutual benefit that produces a sharing or exchange of value
among them and a significant flow of value to the separate parts.
For purposes of this article and article twenty-three of this
chapter, any business conducted by a partnership shall be treated
as conducted by its partners, whether directly held or indirectly
held through a series of partnerships, to the extent of the
partner's distributive share of the partnership's income,
regardless of the percentage of the partner's ownership interest
or the percentage of its distributive or any other share of
partnership income. A business conducted directly or indirectly
by one corporation through its direct or indirect interest in a
partnership is unitary with that portion of a business conducted
by one or more other corporations through their direct or
indirect interest in a partnership if there is a synergy and
mutual benefit that produces a sharing or exchange of value among
them and a significant flow of value to the separate parts and
the corporations are members of the same commonly controlled
group.
(36) (44) West Virginia taxable income. -- The term "West
Virginia taxable income" means the taxable income of a
corporation as defined by the laws of the United States for
federal income tax purposes, adjusted, as provided in this
article:
Provided, That in the case of a corporation having
income from business activity which is taxable without this
state, its "West Virginia taxable income" shall be the portion of
its taxable income as defined and adjusted as is allocated or
apportioned to this state under the provisions of this article.
(45) Valid business purpose. -- (a) " Valid business
purpose" means one or more business purposes, other than the
avoidance or reduction of taxation, which alone or in combination
constitute the primary motivation for a business activity or
transaction, which activity or transaction changes in a
meaningful way, apart from tax effects, the economic position of
the taxpayer. The economic position of the taxpayer includes an
increase in the market share of the taxpayer or the entry by the
taxpayer into new business markets.
(b) Effective date. -- The amendments to this section made
in the year 2009 are retroactive and are effective for tax years
beginning on and after January 1, 2009.
§11-24-4b.
Regulated investment companies and real estate
investment trusts subject to tax Dividends paid
deduction to be added back in determining net
income for captive real estate investment trusts
and regulated investment companies; deductible
intangible expenses and deductible interest paid
to be added back in determining net income of certain entities.
(a) The tax imposed by this article shall be imposed upon
regulated investment companies as defined by this article, and
shall be computed only upon that part of the net income of the
regulated investment company which is subject to federal income
tax as provided in Sections 852 and 4982 of the Internal Revenue
Code of 1986, as amended, except as otherwise provided in this
section.
(b) The dividend paid deduction otherwise allowed by a
federal law in computing net income of a regulated investment
company that is subject to federal income tax shall be added back
in computing the tax imposed by this article unless the regulated
invested company is a qualified regulated investment company, as
defined in this article.
(c) The tax imposed by this article shall be imposed upon
real estate investment trusts and shall be computed only upon
that part of the net income of the real estate investment trust
which is subject to federal income tax as provided in Sections
857 and 858 of the Internal Revenue Code of 1986, as amended,
except as otherwise provided in this section.
(d) The dividend paid deduction otherwise allowed by federal
law in computing net income of real estate investment trusts that
is subject to federal income tax shall be added back in computing
the tax imposed by this article unless the real estate investment
trust is either:
(1) Publicly traded on an established securities market; or,
(2) A qualified real estate investment trust, as defined in
this article.
(a) The dividend paid deduction otherwise allowed by federal
law in computing net income of a real estate investment trust
that is subject to federal income tax shall be added back in
computing the tax imposed by this article if the real estate
investment trust is a captive real estate investment trust.
(b) The dividend paid deduction otherwise allowed by federal
law in computing net income of a regulated investment company
that is subject to federal income tax shall be added back in
computing the tax imposed by this article unless the regulated
investment company is a qualified regulated investment company as
defined in this article.
(c) Intangible expenses otherwise deductible to be added
back for certain taxpayers.
(1) For purposes of computing its net income under this
chapter, a taxpayer shall add back otherwise deductible
intangible expense directly or indirectly paid, accrued or
incurred in connection with one or more direct or indirect
transactions with one or more related members.
(2) If the related member was subject to tax in this state
or another state or possession of the United States or a foreign
nation or some combination thereof on a tax base that included
the intangible expense paid, accrued or incurred by the taxpayer, the taxpayer shall receive a credit against tax due in this state
in an amount equal to the higher of the tax paid by the related
member with respect to the portion of its income representing the
intangible expense paid, accrued or incurred by the taxpayer, or
the tax that would have been paid by the related member with
respect to that portion of its income if: (A) That portion of
its income had not been offset by expenses or losses; or (B) the
tax liability had not been offset by a credit or credits. The
credit so determined shall be multiplied by the apportionment
factor of the taxpayer in this state. However, in no case shall
the credit exceed the taxpayer's liability in this state
attributable to the net income taxed as a result of the
adjustment required by subsection (c)(1).
(3) (A) The adjustment required in subsection (c)(1) and the
credit allowed in subsection (c)(2) shall not apply to the
portion of the intangible expense that the taxpayer establishes
by clear and convincing evidence meets both of the following
requirements: (i) the related member during the same taxable
year directly or indirectly paid, accrued or incurred such
portion to a person that is not a related member, and (ii) the
transaction giving rise to the intangible expense between the
taxpayer and the related member was undertaken for a valid
business purpose.
(B) The adjustment required in subsection (c)(1) and the
credit allowed in subsection (c)(2) shall not apply if the
taxpayer establishes by clear and convincing evidence of the type
and in the form specified by the Tax Commissioner that: (i) The
related member was subject to tax on its net income in this state
or another state or possession of the United States or some
combination thereof; (ii) the tax base for said tax included the
intangible expense paid, accrued or incurred by the taxpayer; and
(iii) the aggregate effective rate of tax applied to the related
member is no less than the tax rate imposed under this article.
(C) The adjustment required in subsection (c)(1) and the
credit allowed in subsection (c)(2) shall not apply if the
taxpayer establishes by clear and convincing evidence of the type
and in the form specified by the commissioner that: (i) The
intangible expense was paid, accrued or incurred to a related
member organized under the laws of a country other than the
United States; (ii) the related member's income from the
transaction was subject to a comprehensive income tax treaty
between such country and the United States, (iii) the related
member's income from the transaction was taxed in such country at
a tax rate at least equal to that imposed by this state; and (iv)
the intangible expense was paid, accrued or incurred pursuant to
a transaction that was undertaken for a valid business purpose
and using terms that reflect an arm's length relationship.
(D) The adjustment required in subsection (c)(1) and the
credit allowed in subsection (c)(2) shall not apply if the
corporation and the commissioner agree in writing to the application or use of alternative adjustments or computations.
The commissioner may, in his or her discretion, agree to the
application or use of alternative adjustments or computations
when he or she concludes that in the absence of such agreement
the income of the taxpayer would not be reflected accurately.
(d) Interest expense otherwise deductible to be added back
for certain taxpayers.
(1) For purposes of computing its net income under this
chapter, a taxpayer shall add back otherwise deductible interest
paid, accrued or incurred to a related member during the taxable
year.
(2) If the related member was subject to tax in this state
or another state or possession of the United States or a foreign
nation or some combination thereof on a tax base that included
the interest expense paid, accrued or incurred by the taxpayer,
the taxpayer shall receive a credit against tax due in this state
equal to the higher of the tax paid by the related member with
respect to the portion of its income representing the interest
expense paid, accrued or incurred by the taxpayer, or the tax
that would have been paid by the related member with respect to
that portion of its income if: (A) That portion of its income
had not been offset by expenses or losses; or (B) the tax
liability had not been offset by a credit or credits. The credit
so determined shall be multiplied by the apportionment factor of
the taxpayer in this state. However, in no case shall the credit
exceed the taxpayer's liability in this state attributable to the
tax imposed under this article as a result of the adjustment
required by subsection (d)(1).
(3) (A) The adjustment required in subsection (d)(1) and
the credit allowed in subsection (d)(2) shall not apply if the
taxpayer establishes by clear and convincing evidence, of the
type and in the form determined by the commissioner, that: (i)
The transaction giving rise to interest expense between the
taxpayer and the related member was undertaken for a valid
business purpose, and (ii) the interest expense was paid, accrued
or incurred using terms that reflect an arm's length
relationship.
(B) The adjustment required in subsection (d)(1) and the
credit allowed in subsection (d)(2) shall not apply if the
taxpayer establishes by clear and convincing evidence of the type
and in the form specified by the commissioner that: (i) The
related member was subject to tax on its net income in this state
or another state or possession of the United States or some
combination thereof; (ii) the tax base for said tax included the
interest expense paid, accrued or incurred by the taxpayer; and
(iii) the aggregate effective rate of tax applied to the related
member is no less than the statutory rate of tax applied to the
taxpayer under this chapter.
(C) The adjustment required in subsection (d)(1) and the
credit allowed in subsection (d)(2) shall not apply if the taxpayer establishes by clear and convincing evidence of the type
and in the form specified by the commissioner that: (i) The
interest expense is paid, accrued or incurred to a related member
organized under the laws of a country other than the United
States; (ii) the related member's income from the transaction is
subject to a comprehensive income tax treaty between such country
and the United States; (iii) the related member's income from the
transaction is taxed in such country at a tax rate at least equal
to that imposed by this state; and (iv) the interest expense was
paid, accrued or incurred pursuant to a transaction that was
undertaken for a valid business purpose and using terms that
reflect an arm's length relationship.
(D) The adjustment required in subsection (d)(1) and the
credit allowed in subsection (d)(2) shall not apply if the
corporation and the commissioner agree in writing to the
application or use of alternative adjustments or computations.
The commissioner may, in his or her discretion, agree to the
application or use of alternative adjustments or computations
when he or she concludes that in the absence of such agreement
the income of the taxpayer would not be properly reflected.
(e) Nothing in this subsection shall be construed to limit
or negate the commissioner's authority to otherwise enter into
agreements and compromises otherwise allowed by law.
(f) Effective date. -- The amendments to this section made
in the year 2009 are retroactive and are effective for tax years
beginning on and after January 1, 2009.
CHAPTER 21A. UNEMPLOYMENT COMPENSATION.
ARTICLE 6. EMPLOYEE ELIGIBILITY; BENEFITS.
§21A-6-1c. Voluntary withholding program.
(a) An individual filing a new claim for unemployment
compensation shall, at the time of filing such claim, be advised
by the appropriate bureau employee that:
(1) Unemployment compensation is subject to federal
and
state income tax;
(2) Requirements exist pertaining to estimated tax payments;
(3) The individual may elect to have federal
and state
income tax deducted and withheld from the individual's payment of
unemployment compensation at the
specified in the federal
Internal Revenue Code appropriate federal and state withholding
rate: And
(4) The individual may change a previously elected
withholding status.
(b) Amounts deducted and withheld from unemployment
compensation shall remain in the unemployment fund until
transferred to the
appropriate federal
or state taxing authority
as payment of income tax.
(c) The commissioner shall follow all procedures specified
by the United States Department of Labor,
and the federal
Internal Revenue Service,
and the West Virginia State Tax
Department pertaining to the deducting and withholding of income tax.
(d) Amounts shall be deducted and withheld in accordance
with the priorities established in rules developed by the
commissioner.
(e) This section shall not be effective prior to payments
made after December 31, one thousand nine hundred and ninety-six.
(e) Effective date. -- The amendments made to this section
regarding withholding for state income tax shall be effective for
payments made on and after January 1, 2010.
NOTE: The purpose of this bill is to specify authority of
the Tax Commissioner to designate Tax Division documents that may
be sent by personal service, United States postal service,
regular mail, certified mail or registered mail or other means;
specify statutory burden of proof and presumption against tax
exemptions; specify inflation adjustment for certain economic
opportunity tax credit entitlement requirements; specify
exclusion of sales and use of certain motor vehicles and certain
trailers and classes of vehicle and vehicular apparatus from
state consumers sales and use tax on certain vehicles; specify
exclusion of sales and use of certain motor vehicles and certain
trailers and classes of vehicle and vehicular apparatus from
municipal and local consumers sales and service tax and use tax,
or special downtown redevelopment district excise tax, or special
district excise tax, and other sales taxes; authorize
discretionary designation of per se exemptions from the consumers
sales and service tax and use tax by the Tax Commissioner;
specify a technical correction, correcting the reference to the
licensing provision from chapter eleven to chapter seventeen-a;
specify exclusion of federal alternative minimum income tax
payers from eligibility for property tax payment deferment and
assessor's denial of deferment; disqualify persons who pay the
federal alternative minimum income tax in specified years from
qualification for the senior citizen's tax credit under chapter
eleven, article twenty-one of the West Virginia Code:
disqualifying persons who pay the federal alternative minimum
income tax in specified years from qualification for the low-
income family tax credit; disqualify persons who pay the federal
alternative minimum income tax in specified years from
qualification for the refundable tax credit for real property
taxes paid in excess of four percent of income; specify that
senior citizen property tax relief credit is not authorized for
tax years beginning on or after January 1, 2009; define terms;
specify treatment of certain income and deduction items for
certain regulated investment companies and real estate investment
companies; authorize state income tax withholding from the
individual's payment of unemployment compensation; and specify
effective dates.
§11-10-25
and
§11-15-9m are new; therefore, strike-throughs
and underscoring have been omitted.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.