HB201 HFA
Sponaugle, et al 10-16
Delegates Sponaugle, Barrett, Bates, Boggs, Brewer,
Canestraro, Caputo, Diserio, Eldridge, E. Evans, Ferro, Fluharty, Hartman,
Hicks, Hornbuckle, Isner, Longstreth, Love, Lovejoy, Lynch, Marcum, Miley, R.
Miller, Pushkin, Pyles, Robinson, Rodighiero, Thompson and Williams move to
amend the bill on page 1, following the enacting clause, by striking the
remainder of the bill, and inserting in lieu thereof, the following:
That
the Code of West Virginia, 1931, as amended, be amended by adding thereto a new
section, designated §11-21-4g; and that §11-21-12 of said code be amended and
reenacted, all to read as follows:
CHAPTER
11. TAXATION
ARTICLE
21. PERSONAL INCOME TAX.
§11-21-4g. Rate of tax -- Taxable years beginning
after December 31, 2018.
(a) Rate of tax on
individuals (except married individuals filing separate returns), individuals
filing joint returns, heads of households, estates and trusts. -- The tax
imposed by section three of this article on the West Virginia taxable income of
every individual (except married individuals filing separate returns); every
individual who is a head of a household in the determination of his or her
federal income tax for the taxable year; every husband and wife who file a
joint return under this article; every individual who is entitled to file his
or her federal income tax return for the taxable year as a surviving spouse; and
every estate and trust shall be determined in accordance with the following
table:
The West Virginia
taxable income is:......................................................................... The
tax is:
Not over $10,000.................................................. 3%
of the taxable income
Over $l0,000 but not.......................................... $300.00
plus 4% of excess
over $25,000............................................................................. over
$10,000
Over $25,000 but not...................................... $900.00
plus 4.5% of excess
over $40,000............................................................................. over
$25,000
Over $40,000 but not...................................... $1,575.00
plus 6% of excess
over $60,000............................................................................. over
$40,000
Over $60,000..............................................
$2,775.00 plus 6.5% of excess
.................................................................................................. over
$60,000
Over $10,000,000................................................. $648,875.00
plus 10% of
............................................................................... excess
over $10,000,000
(b) Rate of tax on
married individuals filing separate returns. -- In the case of husband and wife
filing separate returns under this article for the taxable year, the tax
imposed by section three of this article on the West Virginia taxable income of
each spouse shall be determined in accordance with the following table:
If the West Virginia
taxable income is:......................................................................... The
tax is:
Not over $5,000.................................................... 3%
of the taxable income
Over $5,000 but not............................................ $l50.00
plus 4% of excess
over $l2,500................................................................................ over
$5,000
Over $l2,500 but not................................................... $450.00
plus 4.5% of
over $20,000.................................................................. excess
over $l2,500
Over $20,000 but not......................................... $787.50
plus 6% of excess
over $30,000............................................................................. over
$20,000
Over $30,000............................................................ $l,387.50
plus 6.5% of
...................................................................................... excess
over $30,000
Over $5,000,000................................................... $324,438.00
plus 10% of
................................................................................. excess
over $5,000,000
(c) Applicability of
this section. -- The provisions of this section, as amended by this act, shall
be applicable in determining the rate of tax imposed by this article for all
taxable years beginning after December 31, 2017, and shall be in lieu of the
rates of tax specified in section four-e of this article.
§11-21-12. West Virginia adjusted gross income
of resident individual.
(a) General.
The West Virginia adjusted gross income of a resident individual means his or
her federal adjusted gross income as defined in the laws of the United States
for the taxable year with the modifications specified in this section.
(b) Modifications increasing federal adjusted gross income. There shall
be added to federal adjusted gross income unless already included therein the
following items:
(1) Interest income on obligations
of any state other than this state or of a political subdivision of any other
state unless created by compact or agreement to which this state is a party;
(2) Interest or dividend income on
obligations or securities of any authority, commission or instrumentality of
the United States, which the laws of the United States exempt from federal
income tax but not from state income taxes;
(3) Any deduction allowed when
determining federal adjusted gross income for federal income tax purposes for
the taxable year that is not allowed as a deduction under this article for the
taxable year;
(4) Interest on indebtedness
incurred or continued to purchase or carry obligations or securities the income
from which is exempt from tax under this article, to the extent deductible in
determining federal adjusted gross income;
(5) Interest on a depository
institution tax-exempt savings certificate which is allowed as an exclusion
from federal gross income under Section 128 of the Internal Revenue Code, for
the federal taxable year;
(6) The amount of a lump sum
distribution for which the taxpayer has elected under Section 402(e) of the
Internal Revenue Code of 1986, as amended, to be separately taxed for federal
income tax purposes; and
(7) Amounts withdrawn from a medical
savings account established by or for an individual under section twenty,
article fifteen, chapter thirty-three of this code or section fifteen, article
sixteen of said chapter that are used for a purpose other than payment of
medical expenses, as defined in those sections.
(c) Modifications reducing federal adjusted gross income. There shall
be subtracted from federal adjusted gross income to the extent included
therein:
(1) Interest income on obligations
of the United States and its possessions to the extent includable in gross
income for federal income tax purposes;
(2) Interest or dividend income on
obligations or securities of any authority, commission or instrumentality of
the United States or of the State of West Virginia to the extent includable in
gross income for federal income tax purposes but exempt from state income taxes
under the laws of the United States or of the State of West Virginia, including
federal interest or dividends paid to shareholders of a regulated investment
company, under Section 852 of the Internal Revenue Code for taxable years
ending after the thirtieth day of June, one thousand nine hundred eighty-seven;
(3) Any amount included in federal
adjusted gross income for federal income tax purposes for the taxable year that
is not included in federal adjusted gross income under this article for the
taxable year;
(4) The amount of any refund or
credit for overpayment of income taxes imposed by this state, or any other
taxing jurisdiction, to the extent properly included in gross income for
federal income tax purposes;
(5) Annuities, retirement allowances,
returns of contributions and any other benefit received under the West Virginia
Public Employees Retirement System, and the West Virginia State Teachers
Retirement System and all forms of military retirement, including regular
armed forces, reserves and National Guard, including any survivorship
annuities derived therefrom, to the extent includable in gross income for
federal income tax purposes: Provided,
That notwithstanding any provisions in this code to the contrary this
modification shall be limited to the first two thousand dollars of benefits
received under the West Virginia Public Employees Retirement System, the West
Virginia State Teachers Retirement System and, including any survivorship
annuities derived therefrom, to the extent includable in gross income for
federal income tax purposes for taxable years beginning after the thirty-first
day of December, one thousand nine hundred eighty-six; and the first two
thousand dollars of benefits received under any federal retirement system to
which Title 4 U.S.C. §111 applies: Provided,
however, That the total modification under this paragraph shall not exceed
two thousand dollars per person receiving retirement benefits and this
limitation shall apply to all returns or amended returns filed after the last
day of December, one thousand nine hundred eighty-eight;
(6) Retirement income received in
the form of pensions and annuities after the thirty-first day of December, one
thousand nine hundred seventy-nine, under any West Virginia police, West
Virginia Firemen's Retirement System or the West Virginia State Police Death,
Disability and Retirement Fund, the West Virginia State Police Retirement
System or the West Virginia Deputy Sheriff Retirement System, including any
survivorship annuities derived from any of these programs, to the extent
includable in gross income for federal income tax purposes;
(7) (A) For taxable years beginning
after the thirty-first day of December, two thousand, and ending prior to the
first day of January, two thousand three, an amount equal to two percent
multiplied by the number of years of active duty in the armed forces of the
United States of America with the product thereof multiplied by the first
thirty thousand dollars of military retirement income, including retirement
income from the regular armed forces, reserves and National Guard paid by the
United States or by this state after the thirty-first day of December, two
thousand, including any survivorship annuities, to the extent included in gross
income for federal income tax purposes for the taxable year.
(B) For taxable years beginning
after the thirty-first day of December, two thousand two, the first twenty
thousand dollars of military retirement income, including retirement income
from the regular armed forces, reserves and National Guard paid by the United
States or by this state after the thirty-first day of December, two thousand
two, including any survivorship annuities, to the extent included in gross
income for federal income tax purposes for the taxable year.
(C) For taxable years beginning after
December 31, 2017, military retirement income, including retirement income from
the regular armed forces, reserves and National Guard paid by the United States
or by this state after December 31, 2017, including any survivorship annuities,
to the extent included in federal adjusted gross income for the taxable year.
(D) In the event that any of
the provisions of this subdivision are found by a court of competent
jurisdiction to violate either the Constitution of this state or of the United
States, or is held to be extended to persons other than specified in this
subdivision, this subdivision shall become null and void by operation of law.
(8) (9) Federal adjusted gross income in the amount
of eight thousand dollars received from any source after the thirty-first day
of December, one thousand nine hundred eighty-six, by any person who has
attained the age of sixty-five on or before the last day of the taxable year,
or by any person certified by proper authority as permanently and totally
disabled, regardless of age, on or before the last day of the taxable year, to
the extent includable in federal adjusted gross income for federal tax
purposes: Provided, That if a person
has a medical certification from a prior year and he or she is still
permanently and totally disabled, a copy of the original certificate is
acceptable as proof of disability. A copy of the form filed for the federal
disability income tax exclusion is acceptable: Provided, however, That:
(i) Where the total modification
under subdivisions (1), (2), (5), (6) and (7) of this subsection is eight
thousand dollars per person or more, no deduction shall be allowed under this
subdivision; and
(ii) Where the total modification
under subdivisions (1), (2), (5), (6) and (7) of this subsection is less than
eight thousand dollars per person, the total modification allowed under this
subdivision for all gross income received by that person shall be limited to
the difference between eight thousand dollars and the sum of modifications
under subdivisions (1), (2), (5), (6) and (7) of this subsection;
(9) (10) Federal
adjusted gross income in the amount of eight thousand dollars received from any
source after the thirty-first day of December, one thousand nine hundred
eighty-six, by the surviving spouse of any person who had attained the age of
sixty-five or who had been certified as permanently and totally disabled, to
the extent includable in federal adjusted gross income for federal tax
purposes: Provided, That:
(i) Where the total modification
under subdivisions (1), (2), (5), (6), (7) and (8) of this subsection is eight
thousand dollars or more, no deduction shall be allowed under this subdivision;
and
(ii) Where the total modification
under subdivisions (1), (2), (5), (6), (7) and (8) of this subsection is less
than eight thousand dollars per person, the total modification allowed under
this subdivision for all gross income received by that person shall be limited
to the difference between eight thousand dollars and the sum of subdivisions
(1), (2), (5), (6), (7) and (8) of this subsection;
(10) (11) Contributions
from any source to a medical savings account established by or for the
individual pursuant to section twenty, article fifteen, chapter thirty-three of
this code or section fifteen, article sixteen of said chapter, plus interest
earned on the account, to the extent includable in federal adjusted gross
income for federal tax purposes: Provided,
That the amount subtracted pursuant to this subdivision for any one taxable
year may not exceed two thousand dollars plus interest earned on the account.
For married individuals filing a joint return, the maximum deduction is
computed separately for each individual;
(11) (12) For the two
thousand six taxable year only, severance wages received by a taxpayer from an
employer as the result of the taxpayer's permanent termination from employment
through a reduction in force and through no fault of the employee, not to
exceed thirty thousand dollars. For purposes of this subdivision:
(i) The term "severance
wages" means any monetary compensation paid by the employer in the taxable
year as a result of permanent termination from employment in excess of regular
annual wages or regular annual salary;
(ii) The term "reduction in
force" means a net reduction in the number of employees employed by the
employer in West Virginia, determined based on total West Virginia employment
of the employer's controlled group;
(iii) 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;
(iv) 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; and
(12) (13) Any other
income which this state is prohibited from taxing under the laws of the United
States.
(d) Modification for West Virginia fiduciary adjustment. There shall be
added to or subtracted from federal adjusted gross income, as the case may be,
the taxpayer's share, as beneficiary of an estate or trust, of the West
Virginia fiduciary adjustment determined under section nineteen of this
article.
(e) Partners and S corporation shareholders. -- The amounts of
modifications required to be made under this section by a partner or an S
corporation shareholder, which relate to items of income, gain, loss or
deduction of a partnership or an S corporation, shall be determined under
section seventeen of this article.
(f) Husband and wife. If husband and wife determine their federal
income tax on a joint return but determine their West Virginia income taxes
separately, they shall determine their West Virginia adjusted gross incomes
separately as if their federal adjusted gross incomes had been determined
separately.
(g) Effective date. (1) Changes in the language of this section enacted
in the year two thousand shall apply to taxable years beginning after the
thirty-first day of December, two thousand.
(2) Changes in the language of this
section enacted in the year two thousand two shall apply to taxable years
beginning after the thirty-first day of December, two thousand two.
And to further amend the title, to
read as follows:
A BILL to amend the Code of West
Virginia, 1931 by adding thereto a new section, designated §11-21-4g; and to
amend and reenact §11-21-12 of said code, all relating to exempting certain
income from state personal income tax after specified date.