Senate Bill No. 604
(By Senators McCabe, Rowe, Plymale and White)
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[Introduced February 17, 2003; referred to the Committee on
Economic Development; and then to the Committee on Finance.]
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A BILL to amend chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article thirteen-t; and to
amend article fifteen of said chapter by adding thereto a new
section, designated section twenty-seven, all relating to
establishing a tourism development project tax credit;
specifying short titles; specifying legislative findings and
purpose for new credit; defining terms; specifying activity
that qualifies for credits, how amount of allowable credits
are determined, how credits may be applied and against what
tax liabilities credits may be applied; providing for
forfeiture of unused tax credits, redetermination of credits
and recapture of credits under certain circumstances; imposing
recapture tax, interest and civil money penalty and specifying
circumstance when they apply; allowing transfer of qualified investment to successors; requiring identification of tax
credit property; requiring persons claiming credit to keep
records and to provide information to tax commissioner;
providing rules for interpretation, construction, severability
and burden of proof; requiring filing of application for
credit as condition precedent to claiming credit and imposing
consequences for failure to make timely application;
specifying business activity eligible for tourism development
project tax credit; requiring periodic review of tax credit;
and requiring performance reports to governor and Legislature
.
Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended by adding thereto
a new article, designated article thirteen-t; and that article
fifteen of said chapter eleven be amended by adding thereto a new
section, designated section twenty-seven, all to read as follows:
ARTICLE 13T. TOURISM DEVELOPMENT PROJECT TAX CREDIT.
§11-13T-1. Short title.
This article may be cited as the "West Virginia Tourism
Development Project Tax Credit Act."
§11-13T-2. Legislative finding and purpose.
The Legislature finds that the encouragement of the
development of destination oriented tourism projects in this state
is in the public interest and promotes the general welfare of the people of this state. In order to encourage greater capital
investment in destination oriented tourism projects in this state
and thereby increase economic activity in this state, there is
hereby enacted the tourism development project tax credit.
§11-13T-3. 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 either the
context in which the term is used, or by specific definition, in
this article.
(b) Terms defined. --
(1) Business. -- The term "business" means any activity which
is engaged in by any person in this state which is taxable under
article fifteen, twenty-one, twenty-three or twenty-four of this
chapter (or any combination of those articles of this chapter).
(2) Business expansion. -- The term "business expansion" means
capital investment in a new or expanded tourism development project
in this state.
(3) Commissioner or tax commissioner. -- The terms
"commissioner" and "tax commissioner" are used interchangeably
herein and mean the tax commissioner of the state of West Virginia,
or his or her designee.
(4) Controlled group. -- The term "controlled group" means one or more chains of corporations connected through stock ownership
with a common parent corporation if stock possessing at least fifty
percent of the voting power of all classes of stock of each of the
corporations is owned directly or indirectly by one or more of the
corporations; and the common parent owns directly stock possessing
at least fifty percent of the voting power of all classes of stock
of at least one of the other corporations.
(5) Corporation. -- The term "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.
(6) Designee. -- The term "designee" in the phrase "or his
designee," when used in reference to the commissioner, means any
officer or employee of the state tax department duly authorized by
the commissioner directly, or indirectly by one or more
redelegations of authority, to perform the functions mentioned or
described in this article.
(7) Eligible taxpayer. -- The term "eligible taxpayer" means
any person who makes qualified investment in a new or expanded
tourism development project located in this state and who is
subject to any of the taxes imposed by articles fifteen, twenty-
one, twenty-three and twenty-four of this chapter (or any
combination of those articles). "Eligible taxpayer" shall also include a related person to taxpayer.
(8) Expanded tourism facility. -- The term "expanded tourism
facility" means any tourism facility (other than a new or
replacement tourism facility) resulting from the acquisition,
construction, reconstruction, installation or erection of
improvements or additions to existing property if the improvements
or additions are purchased on or after the first day of July, two
thousand three, but only to the extent of the taxpayer's qualified
investment in the improvements or additions.
(9) Includes and including. -- The terms "includes" and
"including," when used in a definition contained in this article,
shall not be considered to exclude other things otherwise within
the meaning of the term defined.
(10) Leased property. -- The term "leased property" does not
include property which the taxpayer is required to show on its
books and records as an asset under generally accepted principles
of financial accounting. If the taxpayer is prohibited from
expensing the lease payments for federal income tax purposes, the
property shall be treated as purchased property under this section.
(11) New tourism facility. -- The term "new tourism facility"
means a tourism facility which satisfies all the requirements of
paragraphs (A), (B), (C) and (D) of this subdivision.
(A) The facility is employed by the taxpayer in the conduct of
a destination oriented tourism business the net income of which is or would be taxable under article twenty-one or twenty-four of this
chapter. The facility is not considered a new tourism facility in
the hands of the taxpayer if the taxpayer's only activity with
respect to the facility is to lease it to another person or
persons. (This provision is not to be interpreted as precluding
operation of a hotel, motel or other type of lodging as part of a
larger tourism development project.)
(B) The facility is purchased by, or leased to, the taxpayer
on or after the first day of July, two thousand three.
(C) The facility was not purchased or leased by the taxpayer
from a related person. The commissioner may waive this requirement
if the facility was acquired from a related party for its fair
market value and the acquisition was not tax motivated.
(D) The facility was not in service or use during the ninety
days immediately prior to transfer of the title to the facility, or
prior to the commencement of the term of the lease of the facility.
(12) New property. -- The term "new property" means:
(A) Property, the construction, reconstruction or erection of
which is completed on or after the first day of July, two thousand
three, and placed in service or use after that date; and
(B) Property leased or acquired by the taxpayer that is placed
in service or use in this state on or after the first day of July,
two thousand three, if the original use of the property commences
with the taxpayer and commences after that date.
(13) Original use. -- The term "original use" means the first
use to which the property is put, whether or not the use
corresponds to the use of the property by the taxpayer.
(14) Partnership and partner. -- The term "partnership"
includes a syndicate, group, pool, joint venture, limited liability
company (unless the limited liability company elects to be taxed as
a corporation in which case it will be considered to be a
corporation for purposes of this article) 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 such a syndicate, group, pool, joint venture
or other organization.
(15) Person. -- The term "person" includes any natural person,
corporation or partnership.
(16) Property purchased or leased for business expansion.
(A) Included property. -- Except as provided in paragraph (B)
of this subdivision, the term "property purchased or leased for
business expansion" means real property and improvements thereto,
and tangible personal property, but only if the real or personal
property was constructed, purchased, or leased and placed in
service or use by the taxpayer, for use as a component part of a
new or expanded tourism development project as defined in this
section, which is located within the state of West Virginia. This term includes only:
(i) Real property and improvements thereto having a useful
life of four or more years, placed in service or use on or after
the first day of July, two thousand three, by the taxpayer.
(ii) Real property and improvements thereto, acquired by
written lease having a primary term of ten or more years and placed
in service or use by the taxpayer on or after the first day of
July, two thousand three.
(iii) Tangible personal property placed in service or use by
the taxpayer on or after the first day of July, two thousand three,
with respect to which depreciation, or amortization in lieu of
depreciation, is allowable in determining the personal or
corporation net income tax liability of the business taxpayer under
article twenty-one or twenty-four of this chapter, and which has a
useful life, at the time the property is placed in service or use
in the state, of four or more years.
(iv) Tangible personal property acquired by written lease
having a primary term of four years or longer, that commenced and
was executed by the parties thereto on or after the first day of
July, two thousand three, if used as a component part of a new or
expanded business facility, shall be included within this
definition.
(v) Tangible personal property owned or leased, and used by
the taxpayer at a business location outside the state which is moved into the state of West Virginia on or after the first day of
July, two thousand three, for use as a component part of a new or
expanded tourism development project located in the state:
Provided, That if the property is owned, it must be depreciable or
amortizable personal property for income tax purposes, and have a
useful life of four or more years remaining at the time it is
placed in service or use in the state, and if the property is
leased, the primary term of the lease remaining at the time the
leased property is placed in service or use in the state, must be
four or more years.
(B) Excluded property. - The term "property purchased or
leased for business expansion" does not include:
(i) Repair costs, including materials used in the repair,
unless for federal income tax purposes the cost of the repair must
be capitalized and not expensed.
(ii) Airplanes.
(iii) Property which is primarily used outside the state, with
use being determined based upon the amount of time the property is
actually used both within and outside the state.
(iv) Property which is acquired incident to the purchase of
the stock or assets of the seller, unless for good cause shown, the
commissioner consents to waiving this requirement.
(v) Natural resources in place.
(vi) Purchased or leased property, the cost or consideration for which cannot be quantified with any reasonable degree of
accuracy at the time the property is placed in service or use:
Provided, That when the contract of purchase or lease specifies a
minimum purchase price or minimum annual rent the amount thereof
shall be used to determine the qualified investment in the property
under section eight of this article if the property otherwise
qualifies as property purchased or leased for business expansion.
(17) Purchase. -- The term "purchase" means any acquisition of
property, but only if:
(A) The property is not acquired from a person whose
relationship to the person acquiring it would result in the
disallowance of deductions under section 267 or 707 (b) of the
United States Internal Revenue Code of 1986, as amended, and in
effect on the first day of July, two thousand three.
(B) The property is not acquired by one component member of a
controlled group from another component member of the same
controlled group. The commissioner can waive this requirement if
the property was acquired from a related party for its then fair
market value; and
(C) The basis of the property for federal income tax purposes,
in the hands of the person acquiring it, is not determined:
(i) In whole or in part, by reference to the federal adjusted
basis of the property in the hands of the person from whom it was
acquired; or
(ii) Under Section 1014 (e) of the United States Internal
Revenue Code of 1986, as amended, and in effect on the first day of
July, two thousand three.
(18) Qualified activity. -- The term "qualified activity"
means any business or other activity subject to any of the taxes
imposed by article fifteen, twenty-one, twenty-three or twenty-four
of this chapter (or any combination of those articles of this
chapter), but does not include the activity of severance or
production of natural resources.
(19) Related person. -- The term "related person" means:
(A) A corporation, partnership, association or trust
controlled by the taxpayer;
(B) An individual, corporation, partnership, association or
trust that is in control of the taxpayer;
(C) A corporation, partnership, association or trust
controlled by an individual, corporation, partnership, association
or trust that is in control of the taxpayer; or
(D) A member of the same controlled group as the taxpayer.
For purposes of this section, "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 entitled to vote.
"Control", with respect to a partnership or association means
ownership, directly or indirectly, of fifty percent or more of the capital or profits interest of the partnership or association.
"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 is determined in
accordance with the rules for constructive ownership of stock
provided in section 267 (c) of the United States Internal Revenue
Code of 1986, as amended, other than paragraph (3) of that section.
(20) Taxpayer. -- The term "taxpayer" means any person subject
to any of the taxes imposed by article fifteen, twenty-one,
twenty-three or twenty-four of this chapter (or any combination of
those articles of this chapter).
(21) This code. -- The term "this code" means the code of West
Virginia, one thousand nine hundred thirty-one, as amended.
(22) This state. -- The term "this state" means the state of
West Virginia.
(23) Tourism development project. -- The term "tourism
development project" includes any development project certified by
the tax commissioner which results in the creation of a new or
expanded tourism facility. The minimum qualified investment in
property purchased or leased for business expansion required to
qualify a project as a new tourism development project is twenty
million dollars. The minimum qualified investment in property purchased or leased for business expansion required to qualify a
project as an expanded tourism development project is five million
dollars. In addition, in order for a project to qualify as an
expanded tourism development project, taxpayer's total investment
in its tourism facility after the completion of the expansion
project must be at least twenty million dollars. For purposes of
the computations in this subsection, taxpayer's investment in its
tourism facility prior to the expansion project will be its total
original cost before the capital addition.
(24) Tourism facility. -- The term "tourism facility" means
any destination oriented recreation and tourism attraction,
including, but not limited to, resorts, amusement parks, theme
parks, sports arenas and stadiums, convention centers, racetracks,
ski resorts, golf courses, whitewater rafting operations, cultural
sites, areas of natural phenomenon or scenic beauty, historical
sites and recreation destinations, museums, destination oriented
shopping and recreational activity complexes and other tourism
oriented facilities, located within this state. Tourism facility
includes the building or complex of buildings in which the facility
operates, the land on which it is located, and all machinery,
equipment and other real and personal property located at or within
such facility, used in connection with the operation of such
facility, in a business that is taxable in this state, and all site
preparation and start-up costs of the taxpayer for the tourism facility which it capitalizes for federal income tax purposes. In
order for a facility to qualify as a tourism facility for purposes
of this article it must attract at least twenty-five percent of its
business from out-of-state customers. Hotels, motels, other
lodging facilities and restaurants will not qualify as a tourism
facility unless constructed as part of a project which qualif
ies
as
the development of a tourism facility or as an addition to an
existing tourism facility.
(25) Used property. -- The term "used property" means property
acquired on or after the first day of July, two thousand three,
that is not "new property."
§11-13T-4. Amount of credit allowed; certified projects.
(a) Credit allowed. -- Eligible taxpayers are allowed a credit
against the portion of taxes imposed by this state that are
attributable to and the consequence of the taxpayer's qualified
investment in a new or expanded tourism development project in this
state. The amount of this credit is determined and applied as
provided in this article.
(b) Amount of credit. -- The amount of credit allowable shall
be equal to twenty-five percent of the taxpayer's "qualified
investment" determined under section five of this article, in
"property purchased or leased for business expansion," as defined
in section three of this article. This calculation establishes the
maximum amount of credit allowable under this article.
(c) Application of credit over ten years. -- The amount of
credit allowable must be taken over a ten-year period, at the rate
of one tenth of the amount thereof per taxable year, beginning with
the taxable year in which the taxpayer places the qualified
investment in service or use in this state, unless the taxpayer
elected to delay the beginning of the ten-year period until the
next succeeding taxable year. This election shall be made in the
annual income tax return filed under this chapter for the taxable
year in which qualified investment is first placed into service or
use by the taxpayer. Once made, the election cannot be revoked.
The annual credit allowance is taken in the manner prescribed in
section seven of this article.
(d) Placed in service or use. -- For purposes of the credit
allowed by this section, property is considered placed in service
or use in the earlier of the following taxable years:
(1) The taxable year in which, under the taxpayer's
depreciation practice, the period for depreciation with respect to
the property begins; or
(2) The taxable year in which the property is placed in a
condition or state of readiness and availability for a specifically
assigned function.
(e) Certified project. -- A multiple year project certified by
the commissioner is eligible for the credit allowable by this
article. A project eligible for certification under this section is one where the qualified investment under this article is placed
in service or use over a period of up to three successive tax
years:
Provided, That the qualified investment is made pursuant to
a written development plan of the taxpayer providing for an
integrated project for investment at one or more new or expanded
destination oriented tourism facilities, a copy of which must be
attached to the taxpayer's application for project certification
and approved by the commissioner, and the qualified investment
placed in service or use during the first tax year would not have
been made without the expectation of making the qualified
investment placed in service or use during the next two succeeding
tax years;
(f) Certification of continuing eligibility. -- The taxpayer
claiming the credit shall annually file with its income tax returns
filed under this chapter:
(1) Certification that its qualified investment property
continues to be used in the project and if disposed of during the
tax year, was not disposed of prior to expiration of its useful
life; and
(2) Any other information the commissioner requires to
determine continuing eligibility to claim the annual credit
allowance for the project's qualified investment.
§11-13T-5. Application of annual credit allowance.
(a) In general. -- The aggregate annual credit allowance for the current taxable year is an amount equal to the sum of the
following:
(1) The one-tenth part allowed under section four of this
article for qualified investment placed into service or use during
a prior taxable year; plus
(2) The one-tenth part allowed under section four of this
article for qualified investment placed into service or use during
the current taxable year.
(b) Application of current year annual credit allowance. --
The amount determined under subsection (a) of this section is
allowed as a credit against the consumers sales and service tax
collected by taxpayer on sales which are attributable to and the
direct result of the taxpayer's qualified investment. The amount
determined under subsection (a) of this section may be used as a
credit against taxes required to be remitted on taxpayer's monthly
consumers sales and service tax returns, which are filed pursuant
to section sixteen, article fifteen of this chapter. If the
consumers sales and service taxes collected during the month are
solely attributable to and the direct result of the taxpayer's
qualified investment in a tourism development project, taxpayer may
claim the credit by reducing the amount of consumers sales and
service tax required to be remitted with its monthly consumers
sales and service tax returns by the amount of taxpayers' aggregate
annual credit allowance until such time as the full current year annual credit allowance has been claimed. If the consumers sales
and service taxes collected are not solely attributable to and the
direct result of the taxpayer's qualified investment in a tourism
development project, the amount of the taxes which are so
attributable is determined by multiplying the amount of taxes due
by a fraction, the numerator of which is all sales of tangible
personal property and taxable services made during the month which
are directly or indirectly attributable to or as a result of the
qualified investment in the tourism development project. The
denominator of the fraction is all sales of tangible personal
property and taxable services made in this state during the month.
Once the total credit claimed for the tax year equals taxpayer's
aggregate annual credit allowance no further reductions to
taxpayer's monthly consumers sales and service tax returns will be
permitted.
(c) If taxpayer's sales apportionment provisions in subsection
(b) of this section do not fairly represent the taxes solely
attributable to and the direct result of qualified investment of
the taxpayer the commissioner may require, in respect to all or any
part of the taxpayer's businesses or activities, if reasonable:
(1) Separate accounting or identification;
(2) Adjustment to the sales allocation formula to reflect all
components of the tax liability;
(3) The inclusion of one or more additional factors that will fairly represent the taxes attributable to and the direct or
indirect result of the qualified investment of the taxpayer; or
(4) The employment of any other method to effectuate an
equitable attribution of the taxes.
In order to effectuate the purposes of this subsection, the
commissioner may propose for promulgation rules, including
emergency rules, in accordance with article three, chapter
twenty-nine-a of this code.
(d) Unused credit. -- If any credit remains after application
of subsection (b) of this section, the amount thereof is carried
forward to each ensuing tax year until used or until the expiration
of the third taxable year subsequent to the end of the initial ten
year credit application period. If any unused credit remains after
the thirteenth year, the amount thereof is forfeited. No carryback
to a prior taxable year is allowed for the amount of any unused
portion of any annual credit allowance.
§11-13T-6. Qualified investment.
(a) General. -- The qualified investment in property purchased
or leased for business expansion is the applicable percentage of
the cost of each property purchased or leased for the purpose of
business expansion which is placed in service or use in this state
by the taxpayer during the taxable year.
(b) Applicable percentage. -- For the purpose of subsection
(a), the applicable percentage of any property is determined under the following table:
If useful life is: The applicable percentage is:
Less than 4 years....................................0%
4 years or more but less than 6 years ..........33 1/3%
6 years or more but less than 8 years ..........66 2/3%
8 years or more ...................................100%
The useful life of any property, for purposes of this section,
is determined as of the date the property is first placed in
service or use in this state by the taxpayer, determined in
accordance with such rules and requirements the tax commissioner
may prescribe.
(c) Cost. -- For purposes of subsection (a), the cost of each
property purchased for business expansion is determined under the
following rules:
(1) Trade-ins. -- Cost does not include the value of property
given in trade or exchange for the property purchased for business
expansion.
(2) Damaged, destroyed or stolen property. -- If property is
damaged or destroyed by fire, flood, storm or other casualty or is
stolen, then the cost of replacement property does not include any
insurance proceeds received in compensation for the loss.
(3) Rental property. -
(A) The cost of real property acquired by written lease for a
primary term of ten years or longer is one hundred percent of the rent reserved for the primary term of the lease, not to exceed
twenty years.
(B) The cost of tangible personal property acquired by written
lease for a primary term of:
(i) Four years, or longer, is one-third of the rent reserved
for the primary term of the lease;
(ii) Six years, or longer, is two-thirds of the rent reserved
for the primary term of the lease; or
(iii) Eight years, or longer, is one hundred percent of the
rent reserved for the primary term of the lease, not to exceed
twenty years: Provided, That in no event may rent reserved include
rent for any year subsequent to expiration of the book life of the
equipment, determined using the straight-line method of
depreciation.
(4) Self-constructed property. -- In the case of
self-constructed property, the cost thereof is the amount properly
charged to the capital account for depreciation in accordance with
federal income tax law.
(5) Transferred property. -- The cost of property used by the
taxpayer out-of-state and then brought into this state, is
determined based on the remaining useful life of the property at
the time it is placed in service or use in this state, and the cost
is the original cost of the property to the taxpayer less straight
line depreciation allowable for the tax years or portions thereof the taxpayer used the property outside this state. In the case of
leased tangible personal property, cost is based on the period
remaining in the primary term of the lease after the property is
brought into this state for use in a new or expanded business
facility of the taxpayer, and is the rent reserved for the
remaining period of the primary term of the lease, not to exceed
twenty years, or the remaining useful life of the property
(determined as aforesaid), whichever is less.
§11-13T-7. Forfeiture of unused tax credits; redetermination of
credit allowed.
(a)
Disposition of property or cessation of use. -- If during
any taxable year, property with respect to which a tax credit has
been allowed under this article:
(1) Is disposed of prior to the end of its useful life, as
determined under section seven of this article; or
(2) Ceases to be used in a tourism development project prior
to the end of its useful life, then the unused portion of the
credit allowed for the property is forfeited for the taxable year
and all ensuing years. Additionally, except when the property is
damaged or destroyed by fire, flood, storm or other casualty, or is
stolen, the taxpayer shall redetermine the amount of credit allowed
in all earlier years by reducing the applicable percentage of cost
of the property allowed under section six of this article, to
correspond with the percentage of cost allowable for the period of time that the property was actually used in this state in the
tourism development project. The taxpayer shall then file a
reconciliation statement for the year in which the forfeiture
occurs and pay any additional taxes owed due to reduction of the
amount of credit allowable for the earlier years, plus interest and
any applicable penalties. The reconciliation statement shall be
filed with the annual return for the primary tax for which the
taxpayer is liable under articles thirteen and twenty-three of this
chapter.
(b)
Cessation of operation of tourism facility. -- If during
any taxable year the taxpayer ceases operation of a tourism
facility in this state for which credit was allowed under this
article, before expiration of the useful life of property with
respect to which tax credit has been allowed under this article,
then the unused portion of the allowed credit is forfeited for the
taxable year and for all ensuing years. Additionally, except when
the cessation is due to fire, flood, storm or other casualty, the
taxpayer shall redetermine the amount of credit allowed in earlier
years by reducing the applicable percentage of cost of the property
allowed under section eight of this article, to correspond with the
percentage of cost allowable for the period of time that the
property was actually used in this state in a tourism development
project. The taxpayer shall then file a reconciliation statement
with the annual return for the primary tax for which the taxpayer is liable under articles thirteen, twenty-one or twenty-three of
this chapter, for the year in which the forfeiture occurs, and pay
any additional taxes owed due to the reduction of the amount of
credit allowable for the earlier years, plus interest and any
applicable penalties.
§11-13T-8. Transfer of qualified investment to successors.
(a)
Mere change in form of business. -- Property may not be
treated as disposed of under section seven of this article, by
reason of a mere change in the form of conducting the business as
long as the property is retained in the successor business in this
state, and the transferor business retains a controlling interest
in the successor business. In this event, the successor business
is allowed to claim the amount of credit still available with
respect to the tourism development project transferred, and the
transferor business may not be required to redetermine the amount
of credit allowed in earlier years.
(b)
Transfer or sale to successor. -- Property is not treated
as disposed of under section seven of this article by reason of any
transfer or sale to a successor business which continues to operate
the tourism development project in this state. Upon transfer or
sale, the successor shall acquire the amount of credit that remains
available under this article for each subsequent taxable year and
the transferor business is not required to redetermine the amount
of credit allowed in earlier years.
§11-13T-9. Identification of tax credit property.
Every taxpayer who claims credit under this article shall
maintain sufficient records to establish the following facts for
each item of qualified property:
(1) Its identity;
(2) Its actual or reasonably determined cost;
(3) Its straight-line depreciation life;
(4) The month and taxable year in which it was placed in
service;
(5) The amount of credit taken; and
(6) The date it was disposed of or otherwise ceased to be
qualified property.
§11-13T-10. Failure to keep records of tax credit property.
A taxpayer who does not keep the records required for
identification of tax credit property is subject to the following
rules:
(a) A taxpayer is treated as having disposed of, during the
taxable year, any tax credit property which the taxpayer cannot
establish was still on hand, in this state, at the end of that
year.
(b) If a taxpayer cannot establish when tax credit property
reported for purposes of claiming this credit was placed in
service, the taxpayer is treated as having placed it in service in
the most recent prior year in which similar property was placed in service, unless the taxpayer can establish that the property placed
in service in the most recent year is still on hand. In that
event, the taxpayer will be treated as having placed the property
in service in the next most recent year.
§11-13T-11. Interpretation and construction.
(a) No inference, implication or presumption of legislative
construction or intent may be drawn or made by reason of the
location or grouping of any particular section, provision or
portion of this article; and no legal effect may be given to any
descriptive matter or heading relating to any section, subsection
or paragraph of this article.
(b) The provisions of this article shall be reasonably
construed in order to effectuate the legislative intent recited in
section two of this article.
§11-13T-12. Severability.
(a) If any provision of this article or the application
thereof is for any reason adjudged by any court of competent
jurisdiction to be invalid, the judgment may not affect, impair or
invalidate the remainder of the article, but shall be confined in
its operation to the provision thereof directly involved in the
controversy in which the judgment shall have been rendered, and the
applicability of the provision to other persons or circumstances
may not be affected thereby.
(b) If any provision of this article or the application thereof is made invalid or inapplicable by reason of the repeal or
any other invalidation of any statute therein addressed or referred
to, such invalidation or inapplicability may not affect, impair or
invalidate the remainder of the article, but shall be confined in
its operation to the provision thereof directly involved with,
pertaining to, addressing or referring to the statute, and the
application of the provision with regard to other statutes or in
other instances not affected by any such repealed or invalid
statute may not be abrogated or diminished in any way.
§11-13T-13. Burden of proof; application required; failure to
make timely application.
(a) The burden of proof is on the taxpayer to establish by
clear and convincing evidence that the taxpayer is entitled to the
benefits allowed by this article.
(b)
Application for credit required.
(1)
Application required. -- Notwithstanding any provision of
this article to the contrary, no credit is allowed or applied under
this article for any qualified investment property placed in
service or use until the person asserting a claim for the allowance
of credit under this article makes written application to the
commissioner for allowance of credit as provided in this
subsection. An application for credit shall be filed no later than
the last day of the due date for filing the tax returns required
under article twenty-one or twenty-four of this chapter for the taxable year in which the property to which the credit relates is
placed in service or use and all information required by the form
is provided.
(2)
Failure to make timely application. -- The failure to
timely apply for the credit results in the forfeiture of fifty
percent of the annual credit allowance otherwise allowable under
this article. This penalty applies annually until the application
is filed.
§11-13T-14. Tax credit review and accountability.
(a) Beginning on the first day of February, two thousand six
and every third year thereafter, the commissioner shall submit to
the governor, the president of the Senate and the speaker of the
House of Delegates a tax credit review and accountability report
evaluating the cost effectiveness of the economic opportunity
credit during the most recent three-year period for which
information is available. The criteria to be evaluated shall
include, but not be limited to, for each year of the three-year
period:
(1) The numbers of taxpayers claiming the credit;
(2) The net number of new jobs created by all taxpayers
claiming the credit;
(3) The cost of the credit;
(4) The cost of the credit per new job created; and
(5) Comparison of employment trends for an industry and for taxpayers within the industry that claim the credit.
(b) Taxpayers claiming the credit shall provide any
information the tax commissioner may require to prepare the report:
Provided, That the information provided is subject to the
confidentiality and disclosure provisions of sections five-d and
five-s, article ten of this chapter.
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
§11-15-27.
Tourism development project tax credit.
There shall be allowed as a credit against the tax collected
and required to be remitted pursuant to this article, the amount
determined under article thirteen-t of this chapter relating to the
tourism development project tax credit.
NOTE: The purpose of this bill is to provide for a new
tourism development project tax credit to be applied against the
consumers sales and service tax.
Article thirteen-t is new; therefore, strike-throughs and
underscoring have been omitted.
§11-15-27 is new; therefore, strike-throughs and underscoring
have been omitted.
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