SB 2009 Text

ENGROSSED
Senate Bill No. 2009
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
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[Introduced November 9, 2006; referred to the Committee on Finance.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-21-71b, relating to personal income tax; imposing a withholding tax on estimated capital gains derived from the sale of West Virginia land, buildings or other real estate by a nonresident individual or part-year resident individual; declaring the amount of tax withheld; providing for payment of the tax withheld; providing optional provisions for filing a tax return; establishing liability for withholding tax; establishing authority to promulgate legislative rules; and establishing effective date of section.

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 §11-21-71b, to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-71b. Withholding tax on West Virginia source income of
nonresident individuals.
(a) General rule. -- For the privilege of selling any land, building or other real estate, located in this state on or after the first day of January, two thousand eight, including, but not limited to, agricultural property and commercial structures, a nonresident individual or part-year resident individual shall pay a withholding tax under this section, the tax to be withheld by the purchaser at closing and remitted to the Tax Commissioner: Provided, That for taxable years beginning on or after the first day of January, two thousand eight, capital gains earned on the sale of residences that qualify for exclusion from federal adjusted gross income under Section 1231 of the Internal Revenue Code shall also be excluded from the tax imposed by this article: Provided, however, That this requirement to pay withholding tax is in addition to any other requirement to pay withholding tax imposed by this article.
(b) Amount of withholding tax. -- The amount of withholding tax payable by any nonresident individual or part-year resident individual under subsection (a) shall be equal to six and one-half percent of the estimated capital gain derived from selling any land, building or other real estate located in this state, which may lawfully be taxed by this state and which is allocable to the nonresident individual or part-year resident individual.
(c) Payment of withheld tax. --
(1) General rule. -- The withholding tax required by this section shall be withheld by the purchaser at the time of closing on the sale of the land, building, or other real estate and shall be immediately paid over to the Tax Commissioner.
(2) Special rules. --
(A) No extension of time to file return. -- There may be no extension of time for payment of the amount of withholding tax due under this section.
(B) Requirement to file tax return. -- If the amount of the tax withheld under this section equals or exceeds the amount of tax imposed by this article, the nonresident individual or part-year resident individual may, at his or her discretion, not file the return required by this article: Provided, That failure to file a return is deemed to be a final decision to not claim a refund for an overpayment of the tax imposed by this article, and no claim for refund shall be granted and no refund paid with relation to tax withheld pursuant to this section, for which no return was filed by the taxpayer.
(d) Regulations. -- The Tax Commissioner shall promulgate such rules under the authority of article three, chapter twenty-nine-a of this code as may be necessary to carry out the purposes of this section.
(e) Liability for withheld tax. -- Every individual required to deduct and withhold tax under this section who fails to withhold and remit the tax is hereby made liable for the payment of the tax due under this section for taxable years (of such individuals) beginning on or after the first day of January, two thousand eight.

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