Senate Bill No. 222
(By Senators Tomblin (Mr. President) and Caruth,
By Request of the Executive)
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[Introduced January 14, 2010; referred to the Committee on
Finance.]
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A BILL to amend and reenact §11-10-5t and §11-10-5z of the Code of
West Virginia, 1931, as amended; to amend and reenact
§11-13V-7 of said code; and to amend and reenact §11-21-54 and
§11-21-74 of said code, all relating to electronic filing of
tax returns and electronic funds transfers in payment of
taxes; requiring taxpayers with a tax liability of $10,000 or
more to file electronically; requiring electronic filing for
certain tax preparers and employers; providing exceptions; and
providing a $10,000 tax liability threshold amount to require
taxpayers to pay by electronic funds transfers.
Be it enacted by the Legislature of West Virginia:
That §11-10-5t and §11-10-5z of the Code of West Virginia,
1931, as amended, be amended and reenacted; that §11-13V-7 of said
code be amended and reenacted; and that §11-21-54 and §11-21-74 of
said code be amended and reenacted, all to read as follows:
ARTICLE 10. TAX PROCEDURE AND ADMINISTRATION ACT.
§11-10-5t. Payment by electronic funds transfers.
(a) The term "electronic funds transfer" means and includes
automated clearinghouse debit, automated clearinghouse credit, wire
transfer and any other means recognized by the Tax Commissioner for
payment of taxes.
(b) The Tax Commissioner may prescribe by emergency rules,
administrative notices, forms and instructions, and the procedures
and criteria to be followed by certain taxpayers in order to pay
taxes by electronic funds transfer methods.
(c) The rules shall set forth the following:
(1) Acceptable indicia of timely payment;
(2) Which type of electronic filing method or methods a
particular type of taxpayer may or may not use;
(3) Which types of taxes to which electronic filing
requirements apply for any given tax year and implementation dates
:
Provided, That the type of tax to which electronic funds transfer
requirements apply during the first tax year is personal income tax
withholding by employers;
(4) The dollar amount of tax liability per year which, when
exceeded, requires or permits electronic funds transfer. Unless
and until a legislative rule is promulgated or this section is
amended, no person may be required to pay any tax by electronic
funds transfer if the amount owed for the tax during the preceding year was less than $120,000:
Provided, That for tax years
beginning on or after January 1, 2010, no person may be required to
pay any tax by electronic funds transfer if the amount owed for the
tax during the preceding tax year was less than $10,000;
(5) What, if any, exceptions are allowable, and alternative
methods of payment to be used for any exceptions;
(6) Procedures for making voluntary electronic funds transfer
payments;
(7) Any provisions needed to implement the civil penalty
created by this section; and
(8) Any other provisions necessary to ensure the timely
implementation of electronic funds transfer payments.
(d) In addition to any other additions and penalties which may
be applicable, there is a civil penalty for failing or refusing to
use an appropriate electronic funds transfer method when required
to do so. The amount of this penalty is three percent of the total
tax liability which is or was to be paid by electronic funds
transfer for any tax for which electronic funds transfer methods
are required to be used by the taxpayer.
(e) The provisions of this section are not intended to affect
the provisions of other sections of this chapter concerning filing
of returns or any other provisions which are not in direct conflict
with this section.
(f) The State Treasurer shall adopt any procedures or rules
necessary or convenient for implementing electronic funds transfers
of tax payments authorized by this section and rules adopted by the
Tax Commissioner. The treasurer shall draft any procedures and
rules adopted in consultation with the Tax Commissioner and the
procedures and rules may not conflict with this section or rules
adopted by the Tax Commissioner.
(g) The provisions of this section become effective on or
after January 1, 1998.
§11-10-5z. Electronic filing for certain persons.
(a) For tax years beginning on or after January 1, 2009, any
person required to file a return for a tax administered under the
provisions of this article and who had total annual remittance for
any single tax equal to or greater than $100,000 during the
immediately preceding taxable year shall file electronically all
returns for all taxes administered under this article.
For tax
years beginning on or after January 1, 2010, any person required to
file a return for a tax administered under the provisions of this
article and who had total annual remittance for any single tax
equal to or greater than $10,000 during the immediately preceding
tax year shall file electronically all returns for all taxes
administered under this article.
(b) The Tax Commissioner shall implement the provisions of
this section using any combination of notices, forms, instructions and rules that he or she determines necessary. All rules shall be
promulgated pursuant to article three, chapter twenty-nine-a of
this code.
ARTICLE 13V. WORKERS' COMPENSATION DEBT REDUCTION ACT.
§11-13V-7. Periodic installment payments of taxes imposed by this
article; exceptions.
(a)
General rule. -- Except as provided in subsection (b) of
this section, taxes levied by this article are due and payable in
periodic installments as follows:
(1)
Tax of $50 or less per month. -- If a person's aggregate
annual tax liability under this article and article thirteen-a of
this chapter is reasonably expected to be $50 or less per month, no
installment payments of tax are required under this section during
that taxable year.
(2)
Tax of more than $1,000 per month. -- For taxpayers whose
aggregate estimated tax liability under this article and article
thirteen-a of this chapter exceeds $1,000 per month, the tax is due
and payable in monthly installments on or before the last day of
the month following the month in which the tax accrued:
Provided,
That the installment payment otherwise due under this subdivision
on or before June 30 each year shall be remitted to the Tax
Commissioner on or before June 15 each year. When this subdivision
applies, the taxpayer shall, on or before the due date specified in
this subdivision, make out an estimate of the tax for which the taxpayer is liable for the preceding month, sign the estimate and
mail it together with a remittance, in the form prescribed by the
Tax Commissioner, of the amount of tax due to the office of the Tax
Commissioner:
Provided, however, That the installment payment
otherwise due under this paragraph on or before June 30 each year
shall be remitted to the Tax Commissioner on or before June 15.
(3)
Tax of $1,000 per month or less. -- For taxpayers whose
estimated tax liability under this article is $1,000 per month or
less, the tax is due and payable in quarterly installments on or
before the last day of the month following the quarter in which the
tax accrued. When this subdivision applies, the taxpayer shall, on
or before the last day of the fourth, seventh and tenth months of
the taxable year, make out an estimate of the tax for which the
taxpayer is liable for the preceding quarter, sign the same and
mail it together with a remittance, in the form prescribed by the
Tax Commissioner, of the amount of tax due to the office of the Tax
Commissioner.
(b)
Exception. -- Notwithstanding the provisions of subsection
(a) of this section, the Tax Commissioner, if he or she considers
it necessary to ensure payment of the tax, may require the return
and payment under this section for periods of shorter duration than
those prescribed in subsection (a) of this section.
(c)
Remittance by electronic funds transfer. -- When the
taxpayer's annual aggregate liability for tax under this article and article thirteen-a of this chapter exceeds $50,000 for the
prior tax year, payments of estimated tax required by this article
and article thirteen-a during the then current tax year shall be by
electronic funds transfer, in accordance with rules of the Tax
Commissioner and rules of the State Treasurer, except as otherwise
permitted by the Tax Commissioner:
Provided, That for tax years
beginning on or after January 1, 2010, when the taxpayer's annual
aggregate liability for tax under this article and article
thirteen-a of this chapter exceeds $10,000 for the prior tax year,
payments of estimated tax required by this article and article
thirteen-a during the then current tax year shall be by electronic
funds transfer, in accordance with rules of the Tax Commissioner
and rules of the State Treasurer, except as otherwise permitted by
the Tax Commissioner.
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-54. Electronic filing for certain tax preparers.
(a) If an income tax return preparer filed more than one
hundred personal income tax returns for any taxable year that began
after January 1, 2005, and if during calendar year 2006 or any
calendar year thereafter that income tax preparer prepares one or
more personal income tax returns using tax preparation software for
a previous taxable year, then for each current taxable year all
unamended personal income tax returns prepared by that preparer
shall be filed electronically, except as provided in subsections (c) and (d) of this section:
Provided, That if an income tax
return preparer filed more than twenty-five personal income tax
returns for any tax year that began on or after January 1, 2009,
and if that income tax preparer prepares one or more personal
income tax returns using tax preparation software, then for each
tax year beginning on or after January 1, 2010, all unamended
personal income tax returns prepared by that preparer shall be
filed electronically, except as provided in subsections (c) and (d)
of this section.
(b) For purposes of this section:
(1) "Income tax preparer" means any person who prepares, in
exchange for compensation, or who employs another person to
prepare, in exchange for compensation, all or a substantial portion
of any return for a taxpayer for the tax imposed by this article
and who is identified as the preparer for the taxpayer on the
return. A person who only performs those acts described in clauses
(i) through (iv) of Section 7701(a)(36)(B) of the Internal Revenue
Code with respect to the preparation of a return for a trust or
estate for which he or she is a fiduciary or a return for a
partnership of which he or she is a partner is not an income tax
preparer for purposes of this section.
(2) "Electronic filing" or "e-filing" means filing using
electronic technology such as computer modem, magnetic media,
optical disk, facsimile machine, telephone or other technology approved by the Tax Commissioner, in such manner as he or she deems
acceptable.
(3) "Tax preparation software" means any computer software
program intended for accounting or tax return preparation.
(c) Subsection (a) of this section shall cease to apply to an
income tax preparer if, for the previous taxable year, that income
tax preparer prepared no more than twenty-five personal income tax
returns.
(d) This section first applies to personal income tax returns
required to be filed for taxable years beginning January 1, 2006.
This section does not require electronic filing of: (1) Returns
that were not required to be filed for taxable years beginning
prior to that date; (2) returns for prior taxable years beginning
prior to that date; or (3) amended returns for any taxable year.
(e) An income tax preparer who is required to e-file under
this section but does not do so is liable for a penalty in the
amount of $25 for each return prepared that is not e-filed, unless
the preparer shows that the failure to do so is due to
technical
inability to comply on the part of a tax preparer or reasonable
cause rather than willful neglect. For purposes of this
subsection, reasonable cause includes, but is not limited to, a
documented election by a client not to file electronically.
(f) The commissioner shall implement the provisions of this
section using any combination of notices, forms, instructions and
rules that he or she deems necessary.
§11-21-74. Filing of employer's withholding return and payment of
withheld taxes; annual reconciliation; e-filing
required for certain tax preparers and employer.
(a)
General. -- Every employer required to deduct and withhold
tax under this article shall, for each calendar quarter, on or
before the last day of the month following the close of the
calendar quarter, file a withholding return as prescribed by the
Tax Commissioner and pay over to the Tax Commissioner the taxes
required to be deducted and withheld. Where the average quarterly
amount deducted and withheld by any employer is less than $150 and
the aggregate for the calendar year can reasonably be expected to
be less than $600, the Tax Commissioner may by regulation permit an
employer to file an annual return and pay over to the Tax
Commissioner the taxes deducted and withheld on or before the last
day of the month following the close of the calendar year. The Tax
Commissioner may, by nonemergency legislative rules promulgated
pursuant to article three, chapter twenty-nine-a of this code,
change the minimum amounts established by this subsection. The Tax
Commissioner may, if he or she determines necessary for the
protection of the revenues, require any employer to make the return
and pay to him or her the tax deducted and withheld at any time or from time to time. Notwithstanding the provisions of this
subsection, on or after January 1, 2009, every employer required to
deduct and withhold tax under this article shall file a withholding
return as prescribed by the Tax Commissioner and pay over to the
Tax Commissioner the taxes required to be deducted and withheld, in
accordance with the procedures established by the Internal Revenue
Service pursuant to Section 3402 of the Internal Revenue Code.
(b)
Monthly returns and payments of withheld tax on and after
January 1, 2001. -- Notwithstanding the provisions of subsection
(a) of this section, on and after January 1, 2001, every employer
required to deduct and withhold tax under this article shall, for
each of the first eleven months of the calendar year, on or before
the twentieth day of the succeeding month and for the last calendar
month of the year, on or before the last day of the succeeding
month, file a withholding return as prescribed by the Tax
Commissioner and pay over to the Tax Commissioner the taxes
required to be deducted and withheld, if the withheld taxes
aggregate $250 or more for the month, except any employer with
respect to whom the Tax Commissioner may have by regulation
provided otherwise in accordance with the provisions of subsection
(a) of this section. Notwithstanding the provisions of this
subsection, on and after January 1, 2009, every employer required
to deduct and withhold tax under this article shall file a
withholding return as prescribed by the Tax Commissioner and pay over to the Tax Commissioner the taxes required to be deducted and
withheld. The due dates for returns and payments shall be
established by the Tax Commissioner to match as closely as
practicable the due dates in effect for federal income tax
purposes, in accordance with the procedures established by the
Internal Revenue Service pursuant to Section 3402 of the Internal
Revenue Code.
(c)
Annual returns and payments of withheld tax of certain
domestic and household employees. -- Employers of domestic and
household employees whose withholdings of federal income tax are
annually paid and reported by the employer pursuant to the filing
of Schedule H of federal form 1040, 1040A, 1040NR, 1040NR-EZ,
1040SS or 1041 may, on or before January 31 next succeeding the end
of the calendar year for which withholdings are deducted and
withheld, file an annual withholding return with the Tax
Commissioner and annually remit to the Tax Commissioner West
Virginia personal income taxes deducted and withheld for the
employees. The Tax Commissioner may promulgate legislative or
other rules pursuant to article three, chapter twenty-nine-a of
this code for implementation of this subsection. Notwithstanding
the provisions of this subsection, on or after January 1, 2009,
every employer required to deduct and withhold tax under this
article shall file a withholding return as prescribed by the Tax
Commissioner and pay over to the Tax Commissioner the taxes required to be deducted and withheld. The due dates for annual
returns and payments shall be established by the Tax Commissioner
to match as closely as practicable the due dates in effect for
federal income tax purposes in accordance with the procedures
established by the Internal Revenue Service pursuant to Section
3402 of the Internal Revenue Code.
(d)
Deposit in trust for Tax Commissioner. -- Whenever any
employer fails to collect, truthfully account for or pay over the
tax, or to make returns of the tax as required in this section, the
Tax Commissioner may serve a notice requiring the employer to
collect the taxes which become collectible after service of the
notice, to deposit the taxes in a bank approved by the Tax
Commissioner, in a separate account, in trust for and payable to
the Tax Commissioner and to keep the amount of the tax in the
separate account until payment over to the Tax Commissioner. The
notice shall remain in effect until a notice of cancellation is
served by the Tax Commissioner.
(e)
Accelerated payment. -- (1) Notwithstanding the provisions
of subsections (a) and (b) of this section, for calendar years
beginning after December 31, 1990, every employer required to
deduct and withhold tax whose average payment per calendar month
for the preceding calendar year under subsection (b) of this
section exceeded $100,000 shall remit the tax attributable to the
first fifteen days of June each year on or before June 23:
Provided, That on and after June 1, 2007, the provisions of this
subsection that require the accelerated payment on or before June
23 of the tax imposed by this article are no longer effective and
any tax due and owing shall be payable in accordance with
subsection (a) of this section.
(2) For purposes of complying with subdivision (1) of this
subsection, the employer shall remit an amount equal to the
withholding tax due under this article on employee compensation
subject to withholding tax payable or paid to employees for the
first fifteen days of June or, at the employer's election, the
employer may remit an amount equal to fifty percent of the
employer's liability for withholding tax under this article on
compensation payable or paid to employees for the preceding month
of May.
(3) For an employer which has not been in business for a full
calendar year, the total amount the employer was required to deduct
and withhold under subsection (b) of this section for the prior
calendar year shall be divided by the number of months, including
fractions of a month, that it was in business during the prior
calendar year and if that amount exceeds $100,000, the employer
shall remit the tax attributable to the first fifteen days of June
each year on or before June 23, as provided in subdivision (2) of
this subsection.
(4) When an employer required to make an advanced payment of
withholding tax under subdivision (1) of this subsection makes out
its return for the month of June, which is due on July 20, that
employer may claim as a credit against its liability under this
article for tax on employee compensation paid or payable for
employee services rendered during the month of June the amount of
the advanced payment of tax made under subdivision (1) of this
subsection.
(f) The amendments to this section enacted in the year 2006
are effective for tax years beginning on or after January 1, 2006.
(g) An annual reconciliation of West Virginia personal income
tax withheld shall be submitted by the employer on or before
February 28 following the close of the calendar year, together with
Tax Division copies of all withholding tax statements for that
preceding calendar year. The reconciliation shall be accompanied
by a list of the amounts of income withheld for each employee in
such form as the Tax Commissioner prescribes and shall be filed
separately from the employer's monthly or quarterly return.
(h) Any employer required to file a withholding return for two
hundred fifty or more employees shall file its return using
electronic filing as defined in section fifty-four of this article:
Provided, That for any tax period beginning on or after January 1,
2010, any employer with fifty or more employees shall file its
return using electronic filing as defined in section fifty-four of this article. An employer that is required to file electronically
but does not do so is subject to a penalty in the amount of $25 per
employee for whom the return was not filed electronically, unless
the employer shows that the failure is due to
reasonable cause and
not due to willful neglect a technical inability to comply.
NOTE: The purpose of this bill is to have a consistent
threshold of $10,000 tax liability to require taxpayers to file
electronically; to require certain taxpayers to pay by electronic
funds transfer; to require a tax return preparer who prepares at
least twenty-five returns to file the returns electronically; and
to require an employer with fifty or more employees to file
withholding returns electronically.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.