SB680 HFIN AM
The Committee on Finance moves to amend the bill on page
fifteen, following line two hundred thirty-three, by inserting a
new article to read as follows:
"ARTICLE 13Y. THE WEST VIRGINIA MANUFACTURING PROPERTY TAX
ADJUSTMENT ACT.
§11-13Y-1. Short title.
This article shall be known and cited as the West Virginia
Manufacturing Property Tax Adjustment Act.
§11-13Y-2. Definitions.
(a) General. -- When used in this article, or in the
administration of this article, terms defined in subsection (b) of
this section have the meanings ascribed to them by this section
unless a different meaning is clearly required by the context in
which the term is used.
(b) Terms defined. --
(1) "Affiliate" means and includes all persons, as defined in
this section, which are affiliates of each other when either
directly or indirectly:
(A) One person controls or has the power to control the other,
or
(B) A third party or third parties control or have the power
to control two persons, the two thus being affiliates. In
determining whether concerns are independently owned and operated and whether or not an affiliation exists, consideration shall be
given to all appropriate factors, including common ownership,
common management and contractual relationships.
(2) "Commissioner" or "Tax Commissioner" means the Tax
Commissioner of the State of West Virginia or the Tax
Commissioner's delegate.
(3) "Corporation" means any corporation, joint-stock company
or association and any business conducted by a trustee or trustees
wherein interest or ownership is evidenced by a certificate of
interest or ownership or similar written instrument.
(4) "Delegate", when used in reference to the Tax
Commissioner, means any officer or employee of the Tax Division of
the Department of Revenue 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.
(5) "Eligible taxpayer" means any manufacturing business that
is subject to the tax imposed under article twenty-three or article
twenty-four of this chapter, or both. Provided that taxpayers
owning property assessed by the Board of Public Works are not
eligible taxpayers for purposes of this article. "Eligible
taxpayer" also means and includes those members of an affiliated
group of taxpayers engaged in a unitary business, in which one or
more members of the affiliated group is a person subject to the tax
imposed under article twenty-three or article twenty-four of this chapter, or both. Affiliates not engaged in the unitary business
do not qualify as eligible taxpayers.
(6) "Manufacturing business" means any business primarily
engaged in business activity classified as having a sector
identifier, consisting of the first two digits of the six-digit
North American Industry Classification System code number, of
thirty-one, thirty-two or thirty-three that also paid ad valorem
property tax on manufacturing inventory to one or more West
Virginia counties during the taxable year.
(7) "Manufacturing inventory" means and is limited to raw
materials, goods in process and finished goods of a business
primarily engaged in business activity classified as having a
sector identifier, consisting of the first two digits of the six-
digit North American Industry Classification System code number, of
thirty-one, thirty-two or thirty-three.
(8) "Natural person" or "individual" means a human being.
(9) "Partnership" and "partner" means and includes a
syndicate, group, pool, joint venture or other unincorporated
organization through or by means of which any business, financial
operation or venture is carried on and which is not a trust or
estate, a corporation or a sole proprietorship. The term "partner"
includes a member in a syndicate, group, pool, joint venture or
organization.
(10) "Person" means and includes any natural person, corporation, limited liability company or partnership.
(11) "Related entity", "related person", "entity related to"
or "person related to" means:
(A) An individual, corporation, partnership, affiliate,
association or trust or any combination or group thereof controlled
by the taxpayer;
(B) An individual, corporation, partnership, affiliate,
association or trust or any combination or group thereof that is in
control of the taxpayer;
(C) An individual, corporation, partnership, affiliate,
association or trust or any combination or group thereof controlled
by an individual, corporation, partnership, affiliate, association
or trust or any combination or group thereof that is in control of
the taxpayer; or
(D) A member of the same controlled group as the taxpayer.
For purposes of this article, "control", with respect to a
corporation, means ownership, directly or indirectly, of stock
possessing fifty percent or more of the total combined voting power
of all classes of the stock of the corporation which entitles its
owner to vote. "Control", with respect to a trust, means
ownership, directly or indirectly, of fifty percent or more of the
beneficial interest in the principal or income of the trust. The
ownership of stock in a corporation, of a capital or profits
interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the
rules for constructive ownership of stock provided in Section
267(c) of the United States Internal Revenue Code, as amended:
Provided, That paragraph (3), Section 267(c) of the United States
Internal Revenue Code shall not apply.
(12) "Tax year" or "taxable year" means the tax year of the
taxpayer for federal income tax purposes.
(13) "Taxpayer" means any person subject to the tax imposed
under article twenty-three or twenty-four of this chapter, or both.
(14) "Unitary business" means a unitary business as defined in
section three-a, article twenty-four of this chapter.
§11-13Y-3. Eligibility for tax credits; creation of the credit.
There shall be allowed to every eligible taxpayer a credit
against the taxes imposed under articles twenty-three and twenty-
four of this chapter, as determined under this article.
§11-13Y-4. Amount of credit allowed.
(a) Credit allowed. -- Eligible taxpayers shall be allowed a
credit against the tax imposed under article twenty-three or
twenty-four of this chapter, the application of which and the
amount of which shall be determined as provided in this article.
(b) Amount of credit. -- The amount of credit allowed to the
eligible taxpayer is the amount of West Virginia ad valorem
property tax paid on the value of manufacturing inventory of the
eligible taxpayer during the corporate net income tax year and business franchise tax year.
§11-13Y-5. Application of annual credit allowance.
(a) Application of credit against business franchise tax. --
The amount of credit allowed shall first be taken against the tax
liabilities of the eligible taxpayer for the current taxable year
imposed by article twenty-three of this chapter.
(b) Application of credit against corporate net income tax. --
Any credit remaining after application of the credit against the
tax liabilities of the eligible taxpayer for the current taxable
year imposed by article twenty-three of this chapter shall next be
taken against the tax liabilities of the eligible taxpayer for the
current taxable year imposed by article twenty-four of this
chapter.
(c) Carryover credit disallowed. -- Any credit remaining after
application of the credit against the tax liabilities specified in
subsections (a) and (b) of this section for the current taxable
year is forfeited and shall not carry back to any prior taxable
year and shall not carry forward to any subsequent taxable year.
The credit allowed under this article shall be applied after
application of all other applicable tax credits allowed for the
taxable year against the taxes imposed by article twenty-three of
this chapter and after application of all other applicable tax
credits allowed for the taxable year against the taxes imposed by
article twenty-four of this chapter.
(d) Annual schedule. -- For purposes of asserting the credit
against tax, the taxpayer shall prepare and file an annual schedule
showing the amount of tax paid for the taxable year and the amount
of credit allowed under this article. The annual schedule shall
set forth the information and be in the form prescribed by the Tax
Commissioner.
§11-13Y-6. Availability of credit to successors.
(a) Transfer or sale of assets. --
(1) Where there has been a transfer or sale of the business
assets of an eligible taxpayer to a successor which subsequent to
the transfer constitutes an eligible taxpayer as defined in this
article, which continues to operate the manufacturing business in
this state, and which remains subject to the taxes prescribed under
article twenty-three or twenty-four of this chapter, or both, the
successor eligible taxpayer is entitled to the credit allowed under
this article: Provided, That the successor taxpayer otherwise
remains in compliance with the requirements of this article for
entitlement to the credit.
(2) For any taxable year during which a transfer, or sale of
the business assets of an eligible taxpayer to a successor eligible
taxpayer under this section occurs, or a merger occurs pursuant to
which credit is allowed under this article, the credit allowed
under this article shall be apportioned between the predecessor
eligible taxpayer and the successor eligible taxpayer based on the number of days during the taxable year that each taxpayer based and
the number of days during the taxable year that each taxpayer owned
the business assets transferred.
(b) Stock purchases. -- Where a corporation which is an
eligible taxpayer entitled to the credit allowed under this article
is purchased through a stock purchase by a new owner and remains a
legal entity so as to retain its corporate identity, the
entitlement of that corporation to the credit allowed under this
article will not be affected by the ownership change: Provided,
That the corporation otherwise remains in compliance with the
requirements of this article for entitlement to the credit.
(c) Mergers. --
(1) Where a corporation or other entity which is an eligible
taxpayer entitled to the credit allowed under this article is
merged with another corporation or entity, the surviving
corporation or entity shall be entitled to the credit to which the
predecessor eligible taxpayer was originally entitled: Provided,
That the surviving corporation or entity otherwise complies with
the provisions of this article.
(2) The amount of credit available in any taxable year during
which a merger occurs shall be apportioned between the predecessor
eligible taxpayer and the successor eligible taxpayer based on the
number of days during the taxable year that each owned the
transferred business assets.
(d) No provision of this section or of this article shall be
construed to allow sales or other transfers of the tax credit
allowed under this article. The credit allowed under this article
can be transferred only in circumstances where there is a valid
successorship as described under this section.
§11-13Y-7. Credit recapture; interest; penalties; additions to
tax; statute of limitations.
(a) If it appears upon audit or otherwise that any person or
entity has taken the credit against tax allowed under this article
and was not entitled to take the credit, then the credit improperly
taken under this article shall be recaptured. Amended returns
shall be filed for any tax year for which the credit was improperly
taken. Any additional taxes due under this chapter shall be
remitted with the amended return or returns filed with the Tax
Commissioner, along with interest, as provided in section
seventeen, article ten of this chapter and such other penalties and
additions to tax as may be applicable pursuant to the provisions of
article ten of this chapter.
(b) Notwithstanding the provisions of article ten of this
chapter, penalties and additions to tax imposed under article ten
of this chapter may be waived at the discretion of the Tax
commissioner: Provided, That interest is not subject to waiver.
(c) Notwithstanding the provisions of article ten of this
chapter, the statute of limitations for the issuance of an assessment of tax by the Tax Commissioner shall be five years from
the date of filing of any tax return on which this credit was taken
or five years from the date of payment of any tax liability
calculated pursuant to the assertion of the credit allowed under
this article, whichever is later.
§11-13Y-8. Report on credit.
(a)The Tax Commissioner shall provide to the Joint Committee
on Government and Finance by the first day of July, 2011, and on
the first day of July of each year thereafter, a report detailing
the amount of credit claimed pursuant to this article. The report
is to include the amount of credit claimed against the business
franchise tax and the amount of credit claimed against the
corporate net income tax.
(b)Taxpayers claiming the credit shall provide the
information as the Tax Commissioner may require to prepare the
report: Provided, That the information is subject to the
confidentiality and disclosure provisions of sections five-d and
five-s, article ten of this chapter.
§11-13Y-9. Effective date.
This article shall be effective for corporate net income tax
years and business franchise tax years beginning on or after the
first day of January, two thousand nine.";
On page twenty-eight, section five-a, following line two
hundred sixty-five, by inserting the following subsection:
"(g) Limited tax credit for certain financial organizations
for certain periods. -- A credit shall be allowed against the tax
imposed by this article on a financial organization with its
commercial domicile in this state that acquires a financial
organization that does not have its commercial domicile in this
state; Provided, that the goodwill associated with the acquisition
is first added to the net equity of the financial organization with
its commercial domicile in this state on or after the first day of
January two thousand eight; Provided, however, that the prior
recordation of the goodwill associated with the acquisition on the
balance sheet of a financial organization that does not have its
commercial domicile in this state shall not affect, limit or reduce
the availability of the credit authorized by this subsection. The
credit shall equal fifty percent of the goodwill associated with
the acquisition in the amount first recorded on the balance sheet
of the financial organization with its commercial domicile in this
state, multiplied by the tax rate applicable to the financial
organization under this article for the taxable year. For purposes
of this subsection, the term "goodwill" shall have the meaning set
forth in the capital adequacy guidelines for bank holding companies
established by the Federal Reserve Board in 12 C.F.R. 225, Appendix
A, as the same may be revised from time to time.";
On page twenty-eight, section five-a, line two hundred sixty-
six, by striking out the subsection designation "(g)" and inserting in lieu thereof the subsection designation "(h)";
On page on page twenty-nine, section five-a, line two hundred
seventy-eight, following the word "eight", by striking out the
period and inserting in lieu thereof a colon and the following:
"Provided, That the amendments to subsection (g) of this section,
enacted in the year two thousand eight, shall apply to taxable
years beginning after the thirty-first day of December, two
thousand seven.";
On page twenty-nine, section five-a, following line two
hundred seventy-eight, by inserting a new section to read as
follows:
"
§11-23-6. Imposition of tax; change in rate of tax.
(a) General. -- An annual business franchise tax is hereby
imposed on the privilege of doing business in this state and in
respect of the benefits and protection conferred. Such tax shall
be collected from every domestic corporation, every corporation
having its commercial domicile in this state, every foreign or
domestic corporation owning or leasing real or tangible personal
property located in this state or doing business in this state and
from every partnership owning or leasing real or tangible personal
property located in this state or doing business in this state
effective on and after the first day of July, one thousand nine
hundred eighty-seven.
(b) Amount of tax and rate; effective date. --
(1) On and after the first day of July, one thousand nine
hundred eighty-seven, the amount of tax shall be the greater of
fifty dollars or fifty-five one hundredths of one percent of the
value of the tax base, as determined under this article: Provided,
That when the taxpayer's first taxable year under this article is
a short taxable year, the taxpayer's liability shall be prorated
based upon the ratio which the number of months in which such short
taxable year bears to twelve: Provided, however, That this
subdivision shall not apply to taxable years beginning on or after
the first day of January, one thousand nine hundred eighty-nine.
(2) Taxable years after the thirty-first day of December, one
thousand nine hundred eighty-eight. -- For taxable years beginning
on or after the first day of January, one thousand nine hundred
eighty-nine, the amount of tax due under this article shall be the
greater of fifty dollars or seventy-five one hundredths of one
percent of the value of the tax base as determined under this
article.
(3) Taxable years after the thirtieth day of June, one
thousand nine hundred ninety-seven. -- For taxable years beginning
on or after the first day of July, one thousand nine hundred
ninety-seven, the amount of tax due under this article shall be the
greater of fifty dollars or seventy hundredths of one percent of
the value of the tax base as determined under this article.
(4) Taxable years after the thirty-first day of December, two thousand six. -- For taxable years beginning on or after the first
day of January, two thousand seven, the amount of tax due under
this article shall be the greater of fifty dollars or fifty-five
one hundredths of one percent of the value of the tax base as
determined under this article.
(5) Taxable years after the thirty-first day of December, two
thousand eight. -- For taxable years beginning on or after the
first day of January, two thousand nine, the amount of tax due
under this article shall be the greater of fifty dollars or
forty-eight one hundredths of one percent of the value of the tax
base as determined under this article.
(6) Taxable years after the thirty-first day of December, two
thousand nine. -- For taxable years beginning on or after the first
day of January, two thousand ten, the amount of tax due under this
article shall be the greater of fifty dollars or forty-one one
hundredths of one percent of the value of the tax base as
determined under this article.
(7) Taxable years after the thirty-first day of December, two
thousand ten. -- For taxable years beginning on or after the first
day of January, two thousand eleven, the amount of tax due under
this article shall be the greater of fifty dollars or thirty-four
one hundredths of one percent of the value of the tax base as
determined under this article.
(8) Taxable years after the thirty-first day of December, two thousand eleven. -- For taxable years beginning on or after the
first day of January, two thousand twelve, the amount of tax due
under this article shall be the greater of fifty dollars or
twenty-seven one hundredths of one percent of the value of the tax
base as determined under this article.
(9) Taxable years after the thirty-first day of December, two
thousand twelve. -- For taxable years beginning on or after the
first day of January, two thousand thirteen, the amount of tax due
under this article shall be the greater of fifty dollars or twenty
one hundredths of one percent of the value of the tax base as
determined under this article
.
(10) Taxable years after the thirty-first day of December, two
thousand thirteen. -- For taxable years beginning on or after the
first day of January, two thousand fourteen, the amount of tax due
under this article shall be the greater of fifty dollars or ten one
hundredths of one percent of the value of the tax base as
determined under this article.
(11) Taxable years after the thirty-first day of December, two
thousand fourteen. -- For taxable years beginning on or after the
first day of January, two thousand fifteen, there shall be no tax
due under the provisions of this article.
(c) Short taxable years. -- When the taxpayer's taxable year
for federal income tax purposes is a short taxable year, the tax
determined by application of the tax rate to the taxpayer's tax base shall be prorated based upon the ratio which the number of
months in such short taxable year bears to twelve: Provided, That
when the taxpayer's first taxable year under this article is less
than twelve months, the taxpayer's liability shall be prorated
based upon the ratio which the number of months the taxpayer was
doing business in this state bears to twelve, but in no event shall
the tax due be less than fifty dollars.
"
On page forty-eight, section four, following line fifty-one,
by striking out the remainder of the section and inserting in lieu
thereof the following:
"(5) In the case of taxable periods beginning on or after the
first day of January, two thousand nine, a tax is hereby imposed
for each taxable year on the West Virginia taxable income of every
domestic or foreign corporation engaging in business in this state
or deriving income from property, activity or other sources in this
state, except corporations exempt under section five of this
article, at the rate of eight and one-half percent.
(6) In the case of taxable periods beginning on or after the
first day of January, two thousand twelve, a tax is hereby imposed
for each taxable year on the West Virginia taxable income of every
domestic or foreign corporation engaging in business in this state
or deriving income from property, activity or other sources in this
state, except corporations exempt under section five of this
article, at the rate of seven and three-quarters percent: Provided, That the reduction in tax authorized by this subsection
shall be suspended if the combined balance of funds as of the
thirtieth day of June two thousand eleven in the Revenue Fund
Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund
- Part B established in section twenty, article two, chapter
eleven-b of this code does not equal or exceed ten percent of the
general revenue fund budgeted for the fiscal year commencing the
first day of July, two thousand eleven: Provided, however, That
the rate reduction schedule will resume in the calendar year
immediately following any subsequent fiscal year when the combined
balance of funds as of the thirtieth day of June of that fiscal
year in the Revenue Fund Shortfall Reserve Fund and the Revenue
Fund Shortfall Reserve Fund - Part B next equals or exceeds ten
percent of the general revenue fund budgeted for the immediately
succeeding fiscal year.
(7) In the case of taxable periods beginning on or after the
first day of January, two thousand thirteen, a tax is hereby
imposed for each taxable year on the West Virginia taxable income
of every domestic or foreign corporation engaging in business in
this state or deriving income from property, activity or other
sources in this state, except corporations exempt under section
five of this article, at the rate of seven percent Provided, That
the reduction in tax authorized by this subsection shall be
suspended for one calendar year subsequent to the occurrence of the suspension of the reduction in tax authorized by subdivision (6) of
this section: Provided however, That the reduction in tax on the
first day of any calendar year authorized by this subsection shall
be suspended if the combined balance of funds as of the thirtieth
day of June of the preceding year in the Revenue Fund Shortfall
Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B
established in section twenty, article two, chapter eleven-b of
this code does not equal or exceed ten percent of the general
revenue fund budgeted for the fiscal year commencing the first day
of July of the preceding year.
(8) In the case of taxable periods beginning on or after the
first day of January, two thousand fourteen, a tax is hereby
imposed for each taxable year on the West Virginia taxable income
of every domestic or foreign corporation engaging in business in
this state or deriving income from property, activity or other
sources in this state, except corporations exempt under section
five of this article, at the rate of six and one-half percent:
Provided, That the reduction in tax authorized by this subsection
shall be suspended for one calendar year subsequent to the
occurrence of the suspension of the reduction in tax authorized by
subdivision (7) of this section: Provided however, That the
reduction in tax on the first day of any calendar year authorized
by this subsection shall be suspended if the combined balance of
funds as of the thirtieth day of June of the preceding year in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall
Reserve Fund - Part B established in section twenty, article two,
chapter eleven-b of this code does not equal or exceed ten percent
of the general revenue fund budgeted for the fiscal year commencing
the first day of July of the preceding year.";
On page one hundred, section thirteen-a, line two hundred,
following the "contrary", by striking out the comma and inserting
the words "except the last sentence of this subsection", followed
by a comma.";
And,
On page three, by striking out the enacting section and
inserting in lieu thereof the following:
"That §11-23-5b of the Code of West Virginia, 1931, as
amended, be repealed; that §11-13S-4 of said code be amended and
reenacted; that said code be amended by adding thereto a new
article, designated §11-13Y-1, §11-13Y-2, §11-13Y-3, §11-13Y-4,
§11-13Y-5, §11-13Y-6, §11-13Y-7, §11-13Y-8 and §11-13Y-9; that §11-
23-5a and §11-23-6 of said code be amended and reenacted; that said
code be amended by adding thereto a new section, designated
§11-23-17b; that §11-24-3a, §11-24-4, §11-24-7, §11-24-7b,
§11-24-13a, §11-24-13c, §11-24-13d, §11-24-13f and §11-24-42 of
said code be amended and reenacted; and that said code be amended
by adding thereto two new sections, designated §11-24-3b and 11-24-
9b, all to read as follows:"