HB2591 H SB AM #1

Rose 3348

The Committee on Small Business moved to amend the bill on page 1, immediately after the enacting clause by striking the remainder of the bill and inserting in lieu thereof the following:

“That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §11-13DD-1, §11-13DD-2, §11-13DD-3, §11-13DD-4, §11-13DD-5 and §11-13DD-6, all to read as follows:

ARTICLE 13DD. SMALL BUSINESS TAX CREDIT.

§11-13DD-1. Definitions.

(a) General. -– When used in this article, or in the administration of this article, terms defined in subsection (b) have the meanings ascribed to them by this section, unless a different meaning is clearly required by either the context in which the term is used, or by specific definition, in this article.

(b) Terms defined.

(1) Code or this code. -- The term “code” or "this code" means the Code of West Virginia, 1931, as amended.

(2) Commissioner or Tax Commissioner. -– The terms "commissioner" and "Tax Commissioner" are used interchangeably herein and mean the Tax Commissioner of the State of West Virginia, or his or her designee.

(3) Eligible small business. – For purposes of this article, the term "eligible small business" means a business that:

(A) Employs fewer than twenty-five persons; and

(B) Maintains its corporate headquarters or primary place of business in West Virginia.

§11-13DD-2. Amount of tax credit.

(a) Credit allowed. There is allowed to eligible small businesses a credit against the taxes imposed article twenty-one and twenty-four of this chapter as provided in this section.

(b) Amount of credit allowable. The amount of annual credit allowable under this article to an eligible small business shall be up to fifty percent of the costs incurred by the eligible small business of branding, marketing and advertising of agricultural or manufactured products produced or manufactured in West Virginia in a given taxable year in which the costs were incurred: Provided, That no amount of annual credit allowable under this article may exceed $100,000.00 in a given tax year; Provided, however, That an eligible small business may accrue the credit under this article for up to five years; Provided further, That if a business under this section is located on a post-mine land site, the tax credit shall double.

(1) The credit shall be applied to reduce the corporation net income tax imposed under article twenty-four of this chapter.

(2) If the eligible small business is a limited liability company, an electing small business corporation, as defined in section 1361 of the United States Internal Revenue Code of 1986, or a partnership, any unused tax credit remaining after application of subsection (c) of this section is allowed as a tax credit against the taxes imposed by article twenty-four of this chapter on owners of the eligible small business.

(A) Electing small business corporations, as defined in section 1361 of the United States Internal Revenue Code of 1986, limited liability companies, and partnerships shall allocate the tax credit allowed by this article among their members in the same manner as profits and losses are allocated for the applicable taxable year.

(B) No tax credit is allowed under this article against any withholding tax imposed by, or payable under, article twenty-one of this chapter.

(3) If the eligible small business is a limited liability company, an electing small business corporation, as defined in section 1361 of the United States Internal Revenue Code of 1986, or a partnership, any unused tax credit remaining after application of subdivisions (1) and (2) of this subsection is allowed as a tax credit against the taxes imposed by article twenty-one of this chapter on owners of the eligible taxpayer.

(B) No tax credit is allowed under this article against any withholding tax imposed by, or payable under, article twenty-one of this chapter.

§11-13DD-3. Carry forward.

If the tax credit allowed under this article in any taxable year exceeds the sum of the taxes enumerated in section two of this article for that taxable year, the eligible small business and owners of eligible small business described in subsection (b) of section two of this article may apply the excess as a tax credit against those taxes, in the order and manner stated in this section, for succeeding taxable years until the earlier of the following:

(a) The full amount of the excess tax credit is used; or

(b) The expiration of the fourth taxable year after the taxable year in which the costs incurred by the eligible small business of branding, marketing and advertising of agricultural or manufactured products produced or manufactured in West Virginia was made. The tax credit remaining thereafter is forfeited.

§11-13DD-4. Legislative rules.