FISCAL
NOTE
WEST virginia Legislature
2017 regular session
By
[
to the Committee on
A BILL to amend the Code
of West Virginia, 1931, as amended, by adding thereto a new section, designated
§11-24-11c, relating to providing a tax credit for obtaining certain
certifications by the United States Green Building Council Leadership in Energy
and Environmental Design green building rating system or the Green Globes
Building Initiative green building rating standard; setting forth the amount of
the credit; establishing who may take the credit; establishing the amount of
the credit; establishing the criteria for taking the credit; providing rule-making
authority; and defining terms.
Be it enacted by the
Legislature of West Virginia:
That the Code of West
Virginia, 1931, as amended, be amended by adding thereto a new section,
designated §11-24-11c, to read as follows:
ARTICLE 24. CORPORATION NET INCOME TAX.
§11-24-11c. Credit for becoming certified by the Leadership
in Energy and Environmental Design Green Building Rating System or Green Globes
Building Rating Standard.
(a) General. -- A credit is allowed against the tax liability of an
eligible taxpayer for the cost of making renovations and improvements to a
building to become certified by the United States Green Building Council
Leadership in Energy and Environmental Design green building rating system or
the Green Globes Building Initiative green building rating standard.
(b) Definitions. -- For purposes of this section, the term:
(1) "Cost to become
certified by the United States Green Building Council Leadership in Energy and
Environmental Design Green Building Rating System or the Green Globes Building
Initiative green building rating standard" means the reasonable and
necessary sums of money spent by the taxpayer in making renovations and
improvements to its building in receiving that certification.
(2) "Eligible
taxpayer" means the owner of a building being used for commercial
purposes.
(3) “Owner” means the
person who is possessed of the freehold, whether in fee or for life. A person seized or entitled in fee subject to
a mortgage or trust takes possession, after which the mortgagee or trustee is
considered the owner. A person who has
an equitable estate or freehold, or is a purchaser of a freehold estate who is
in possession before transfer of legal title is also considered the owner.
(c) Amount of credit. -- The amount of the credit available to any
eligible taxpayer is equal to its cost in making renovations and improvements
to its building to become certified by the United States Green Building Council
Leadership in Energy and Environmental Design Green Building Rating System or
the Green Globes Building Initiative green building rating standard, less any
reimbursement of the cost which the taxpayer has received through any other
means.
(d) When credit may be taken. -- An eligible taxpayer may claim a
credit allowed under this section on its annual return for the taxable year in
which it receives certification.
(e) Application of credit. --
(1) Corporation net income taxes. -- The credit is first applied to
reduce the taxes imposed by this article for the taxable year.
(2) Business franchise tax. –- After application of subdivision (1) of
this subsection, any unused credit is next applied to reduce the taxes imposed
by article twenty-three of this chapter for the taxable year, determined before
application of allowable credits against tax.
(3) If the eligible
taxpayer is a limited liability company, small business corporation or a
partnership, then any unused credit after application of subdivisions (1) and
(2) of this subsection is allowed as a credit against the taxes imposed by this
article on owners of the eligible taxpayer on the conduit income directly
derived from the eligible taxpayer by its owners. Only those portions of the tax imposed by
article twenty-four of this chapter that are imposed on income directly derived
by the owner from the eligible taxpayer are subject to offset by this credit.
(A) Small business
corporations, limited liability companies, partnerships and other
unincorporated organizations shall allocate the credit allowed by this article
among their members in the same manner as profits and losses are allocated for
the taxable year.
(B) No credit is allowed
under this article against any withholding tax imposed by, or payable under,
article twenty-one of this chapter.
(4) Personal income tax taxes. -- After application of subdivisions
(1), (2) and (3) of this subsection, any unused credit is next applied to
reduce the taxes imposed by article twenty-one of this chapter for the taxable
year determined before application of allowable credits against tax of the
eligible taxpayer.
(5) If the eligible
taxpayer is a limited liability company, small business corporation or a
partnership, then any unused credit after application of subsections (1), (2),
(3) and (4) of this section is allowed as a credit against the taxes imposed by
article twenty-one of this chapter on owners of the eligible taxpayer on the
conduit income directly derived from the eligible taxpayer by its owners. Only those portions of the tax imposed by
article twenty-one of this chapter that are imposed on income directly derived
by the owner from the eligible taxpayer are subject to offset by this credit.
(A) Small business
corporations, limited liability companies, partnerships and other
unincorporated organizations shall allocate the credit allowed by this article
among their members in the same manner as profits and losses are allocated for
the taxable year.
(B) No credit is allowed
under this article against any withholding tax imposed by, or payable under,
article twenty-one of this chapter.
(f) Unused credit carry forward. –- Any unused credit may be carried
over to each of the next three taxable years following the unused credit year
until used or forfeited due to lapse of time.
(g) Application for certification. -- No credit is allowed or may be
applied under this section until the taxpayer seeking to claim the credit has
filed a written application with the Tax Commissioner. This application shall
be filed, in the form prescribed by the Tax Commissioner, no later than the
last day for filing tax returns, determined by including any authorized
extension of time for filing the return, required under article twenty-one or
twenty-four of this chapter for the taxable year in which the certification is
received, and the taxpayer shall provide all information required by the form.
(1) In the case of
owners of eligible taxpayers described in subdivision (3) or (5), subsection
(e) of this section, the application filed under this section by the limited
liability company, small business corporation or partnership owned by the
person is considered to be filed on behalf of the owner and no separate filing
of the application is required of the owner.
(2) Form of application. -- The application must be filed in the form
as the Tax Commissioner prescribes and shall contain the information as the Tax
Commissioner requires to determine whether it should be approved and the
taxpayer is eligible for credit under this article.
(3) Requirements for application. -- The application shall require the
attachment of a copy of the certification by the United States Green Building
Council Leadership in Energy and Environmental Design Green Building Rating
System or the Green Globes Building Initiative green building rating standard
and other information as the Tax Commissioner requires.
(4) Approval. -- The Tax Commissioner may approve applications if it
appears to the Tax Commissioner that the applicant has met the requirements of
this section and all rules and requirements applicable thereto.
(5) Failure to file. -- The failure to timely file the application for
credit under this section results in forfeiture of one hundred percent of the
credit otherwise allowable under this article.
(6) Failure to comply with provisions of section or rules and requirement
applicable thereto. -- If a person has received approval for credit under
this section from the Tax Commissioner, but fails to conform to the terms of
the approval, no credit is allowed under this section by the eligible taxpayer.
(h) Transfer to successors. --
(1) Mere change in form of business. -- The successor is allowed to
claim the amount of credit still available with respect to the building
transferred, and the transferor business is not required to redetermine the
amount of credit allowed in earlier years.
(2) Transfer or sale to successor. -- 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.
(i) Cessation of operation. –- If during any taxable year the taxpayer
ceases using the building for commercial purposes, then the unused portion of
the allowed credit is forfeited for the taxable year and for all ensuing years.
(j) When recapture applies. --
(1) Any taxpayer who
fails to maintain certification for the period of time over which tax credits
allowed under this section the taxpayer shall pay the recapture tax imposed by
subsection (k) of this section.
(2) This subsection does
not apply when subsection (h) of this section applies. However, the successor, or the successors,
and the taxpayer, who previously claimed credit under this section, are jointly
and severally liable for payment of any recapture tax subsequently imposed
under this section.
(k) Recapture tax imposed. --
If the taxpayer fails to
maintain certification required in order to qualify for the credit, the
taxpayer shall recapture the amount of credit claimed for the taxable year, and
all preceding taxable years. The amount
of tax due under this subsection is an amount equal to the amount of credit
that is recaptured under this subdivision.
The amount of tax recaptured under this subsection is due and payable on
the day the taxpayer's annual return against which the credit was applied is
due for the taxable year. When the
employer is a partnership, limited liability company or S corporation for
federal income tax purposes, the recapture tax shall be paid by those persons
who are partners in the partnership, members in the company, or shareholders in
the S corporation, in the taxable year in which recapture occurs under this
subsection.
(l) Rules. -- The commissioner may promulgate rules considered useful
or necessary to carry out the purpose of this section and to implement the
intent of the Legislature. Rules shall
be promulgated in accordance with article three, chapter twenty-nine-a of this
code.
(m) Effective date. –- The credit authorized pursuant to this section is
available for tax years beginning on and after January 1, 2018.
NOTE: The purpose of this bill is
to provide a tax credit for obtaining certain certifications by the United
States Green Building Council Leadership in Energy and Environmental Design
green building rating system or the Green Globes Building Initiative green building
rating standard. The bill sets forth the
amount of the credit, who may take the credit, the criteria for taking the
credit and the amount of the credit. The
bill also provides rulemaking authority and defines terms.
Strike-throughs indicate language that
would be stricken from a heading or the present law and underscoring indicates
new language that would be added.