Senate Bill No. 659
(By Senator Oliverio, Craigo, McKenzie, Sharpe, Ross, Mitchell,
Prezioso, Minard, Helmick, Fanning and Unger)
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[Introduced February 18, 2002; referred to the Committee
on Finance.]
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A BILL to amend and reenact section six, article twenty-three,
chapter eleven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to reducing the
taxable rate of the business franchise tax.
Be it enacted by the Legislature of West Virginia:
That section six, article twenty-three, chapter eleven of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 23. BUSINESS FRANCHISE TAX.
§11-23-6. Imposition of tax; change in rate of tax.
(a) General. -- An annual business franchise tax is hereby
imposed on the privilege of doing business in this state and in
respect of the benefits and protection conferred. Such tax shall be collected from every domestic corporation, every corporation
having its commercial domicile in this state, every foreign or
domestic corporation owning or leasing real or tangible personal
property located in this state or doing business in this state and
from every partnership owning or leasing real or tangible personal
property located in this state or doing business in this state,
effective on and after the first day of July, one thousand nine
hundred eighty-seven.
(b) Amount of tax and rate; effective date. --
(1) On and after the first day of July, one thousand nine
hundred eighty-seven, the amount of tax shall be the greater of
fifty dollars or fifty-five one hundredths of one percent of the
value of the tax base, as determined under this article: Provided,
That when the taxpayer's first taxable year under this article is
a short taxable year, the taxpayer's liability shall be prorated
based upon the ratio which the number of months in which such short
taxable year bears to twelve: Provided, however, That this
subdivision shall not apply to taxable years beginning on or after
the first day of January, one thousand nine hundred eighty-nine.
(2) Taxable years after December 31, 1988. -- For taxable
years beginning on or after the first day of January, one thousand
nine hundred eighty-nine, the amount of tax due under this article
shall be the greater of fifty dollars or seventy-five one
hundredths of one percent of the value of the tax base as determined under this article.
(3) Taxable years after June 30, 1997. -- For taxable years
beginning on or after the first day of July, one thousand nine
hundred ninety-seven, the amount of tax due under this article
shall be the greater of fifty dollars or seventy hundredths of one
percent of the value of the tax base as determined under this
article.
(4) Taxable years after June 30, 2002. -- For taxable years
beginning on or after the first day of July, two thousand two, the
amount of tax due under this article shall be the greater of fifty
dollars or six thousand nine hundred sixty-five ten thousandths of
one percent of the value of the tax base as determined under this
article.
(c) Short taxable years. -- When the taxpayer's taxable year
for federal income tax purposes is a short taxable year, the tax
determined by application of the tax rate to the taxpayer's tax
base shall be prorated based upon the ratio which the number of
months in such short taxable year bears to twelve: Provided, That
when the taxpayer's first taxable year under this article is less
than twelve months, the taxpayer's liability shall be prorated
based upon the ratio which the number of months the taxpayer was
doing business in this state bears to twelve but in no event shall
the tax due be less than fifty dollars.
NOTE: The purpose of this bill is to reduce the business
franchise taxable rate from .70% of one percent of the tax base to
.6965% of one percent in order to provide an economic stimulus to
business. The sponsors of this bill project that this will account
for a $500,000 tax reduction for corporations and partnerships
subject to the tax.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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