WEST virginia legislature
2022 regular session
Introduced
House Bill 4417
By Delegates Riley and Reed
[Introduced January 27, 2022;
referred
to the Committee on Finance.]
A BILL to amend and reenact §11-21-20 of the Code of West Virginia, 1931, as amended, relating to personal income tax; alleviating double taxation on foreign income at the state level; and sunsetting the credit for income tax paid on foreign income in 2070.
Be it enacted by the Legislature of West Virginia:
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-20. Credit for income tax of another state and foreign country.
(a) General. — A
resident shall be is allowed a credit against the tax otherwise
due under this article for any income tax imposed for the taxable year by
another state of the United States, or by the District of Columbia, or
by a foreign country upon income both derived therefrom and subject to tax
under this article.
(b) Limitations. —
(1) The credit under this section shall may not exceed the
percentage of the tax otherwise due under this article determined by dividing
the portion of the taxpayer’s West Virginia income subject to taxation by such
the other jurisdiction by the total amount of the taxpayer’s West
Virginia income.
(2) The credit under this
section shall not reduce the tax otherwise due under this article to an amount
less than would have been due if the income subject to taxation by such the
other jurisdiction were excluded from the taxpayer’s West Virginia income.
(3) A credit pursuant to this section for income tax paid to a foreign country shall be allowed only when the taxpayer demonstrates to the satisfaction of the Tax Commissioner that, after application of provisions of the Internal Revenue Code with regard to taxation of foreign income, double taxation of the foreign income included in the federal adjusted gross income of the taxpayer will occur unless the credit provided in this section is allowed.
(c) Exception. — No
credit shall be is allowed under this section for a tax of a
jurisdiction which allows residents of this state a credit against the taxes
imposed by such the other jurisdiction for the tax under this
article, if such the other credit is substantially similar to the
credit granted by section forty §11-21-40 of this code.
(d) Definition. — For purposes of this section, “West Virginia income” means:
(1) The West Virginia adjusted gross income of an individual; or
(2) The amount of the
income of an estate or trust, determined as if the estate or trust were an
individual computing his or her West Virginia adjusted gross income
under section twelve §11-21-12 of this code.
(e) Sunset provision. — The credit allowed against the tax otherwise due under this article for any income tax imposed for the taxable year by a foreign country upon income both derived therefrom and subject to tax under this article is effective from the amendment and reenactment of this section during the 2022 regular session of the Legislature through July 1, 2070.
NOTE: The purpose of this bill is to alleviate double taxation on foreign income at the state level. The bill sunsets the credit for income tax paid on foreign income in 2070.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.