COMMITTEE SUBSTITUTE

FOR

Senate Bill No. 161

(By Senators Tomblin, Mr. President, and

Sprouse, By Request of the Executive)

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[Originating in the Committee on Finance;

reported February 29, 2000.]

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A BILL to amend article ten, chapter eleven of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section twenty-two, relating generally to requiring certain businesses to file information returns to be used solely to analyze the fiscal and economic effects of the recommendations of the governor's commission on fair taxation; and providing for unauthorized disclosure of information returns and information return information to be a crime.
Be it enacted by the Legislature of West Virginia:
That article ten, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section twenty-two, to read as follows:
ARTICLE 10. PROCEDURE AND ADMINISTRATION.
§11-10-22. Information returns and due date thereof.
(a) Information returns required. -- The tax commissioner shall develop a representative statistical sample of persons who have business registration certificates under article twelve of this chapter. This sample shall be broad enough to reasonably predict revenues and to project how the recommendations of the governor's commission on fair taxation would impact different classifications of businesses, as well as the various forms of doing business in which those business activities are conducted. Persons included in the sample shall file an information return for the calendar year ending the thirty-first day of December, one thousand nine hundred ninety-eight, and for the calendar year ending the thirty-first day of December, one thousand nine hundred ninety-nine. When a business keeps its books and records on a fiscal year basis, the business may elect to file its information returns for its fiscal years ending within the calendar years one thousand nine hundred ninety-eight and one thousand nine hundred ninety-nine, respectively.
(b) Due date. -- Information returns are due on the thirty- first day of July, two thousand, unless the tax commissioner grants an extension of time to file the information return. Information returns shall be filed in the form and pursuant to instructions prescribed by the tax commissioner. These returns may require taxpayers to provide information related to their capital accounts, income and expenditures and the apportionment of these items within and without this state, but shall not require taxpayers to make any computations of tax as if the recommendations of the governor's commission on fair taxation were in effect for the period covered by each information return.
(c) Incentive to file. -- To encourage the filing of complete and accurate information returns, the tax commissioner shall allow a two hundred dollar tax credit for each required information return that is filed electronically, within the meaning of article five, chapter thirty-nine of this code, and a credit of one hundred fifty dollars for each paper return filed. This credit shall be claimed against the person's liability for business franchise tax under article twenty-three of this chapter. Unused credit may be claimed against the person's liability for personal and corporation net income tax under article twenty-one or twenty-four of this chapter for the tax year of the person in which the information return is filed. When the person has no tax liability for the year under article twenty-three of this chapter and no tax liability under article twenty-one or twenty-four of this chapter for the taxable year, or that person's liability is less than two hundred dollars, the tax commissioner shall refund the amount of this credit to the person required to file an information return under this section.
(d) Civil money penalty. -- Any person required to file an information return under this section who fails to file the return timely, determined with regard to any authorized extension of time for filing, or who files a return that is materially incorrect or incomplete shall pay a money penalty of one thousand dollars for each return that is not filed timely or that is filed timely but is materially inaccurate or incomplete. The tax commissioner shall waive this penalty upon taxpayer furnishing the required information and may waive this penalty for good cause shown. This penalty shall be collected in the same manner as the penalties imposed by section nineteen of this article are collected.
(e) Confidentiality.
(1) Information returns and information return information filed under this section shall be treated as returns and return information under the provisions of section five-d of this article. The returns and return information shall be open to inspection by or disclosure to officers and employees of the department of tax and revenue whose official duties require the inspection or disclosure for the purpose of, but only to the extent necessary in, preparing economic or financial forecasts, projections, analyses and statistical studies and conducting related activities.
(2) Inspection or disclosure is also permitted pursuant to a contract between the proper officer of this state and a college or university in this state when the purpose of the disclosure is to prepare economic or financial forecasts, projections, analyses, and statistical studies and to conduct related activities regarding the recommendations of the governor's commission on fair taxation. The college or university receiving the information shall provide for its safekeeping and shall not disclose it to any person other than employees of the college or university who are directly involved in analysis of the data, or in preparing reports, for use by the tax commissioner, the governor or the Legislature.
(3) Except as otherwise provided in this section, no person who receives an information return or information return information under this section shall disclose the return or return information to any person other than the taxpayer to whom it relates except in a form which cannot be associated with, or otherwise identify, directly or indirectly, a particular taxpayer.