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Key: Green = existing Code. Red = new code to be enacted
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.
NOTE: The purpose of this bill is to impose a personal income
tax withholding on capital gains derived from the sale of capital
assets by nonresidents or part-year residents
.
§11-21-71b is new; therefore, strike-throughs and underscoring
have been omitted.