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Introduced Version Senate Bill 188 History

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sb188 intr
Senate Bill No. 188

(By Senators Weeks and Yoder)

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[Introduced February 14, 2005; 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 article, designated §7-5B-1, §7-5B-2, §7-5B-3, §7-5B-4, §7-5B-5, §7-5B-6 and §7-5B-7; to amend said code by adding thereto a new article, designated §8-13D-1, §8-13D-2, §8-13D-3, §8-13D-4, §8-13D-5, §8-13D-6 and §8-13D-7; to amend said code by adding thereto a new section, designated §11-1C-1c; to amend said code by adding thereto a new section, designated §11-5-15; to amend and reenact §11-6-13, §11-6-14, §11-6-15, §11-6-18, §11-6-19, §11-6-20, §11-6-21, §11-6-22 and §11-6-23 of said code; to amend said code by adding thereto a new section, designated §11-6D-9; to amend said code by adding thereto a new section, designated §11-6F-7; to amend said code by adding thereto four new sections, designated §11-8-1a, §11-8-2a, §11-8-3a and §11-8-23a; to amend and reenact §11-8-4, §11-8-5, §11-8-6, §11-8-6a, §11-8-6b, §11-8-6c, §11-8-6d, §11-8-6e, §11-8-6f, §11-8-12, §11-8-12a, §11-8-13, §11-8-16, §11-8-17 and §11-8-24 of said code; to amend and reenact §11-9-2 of said code; to amend and reenact §11-10-3 of said code; to amend said code by adding thereto a new section, designated §11-10-11b; to amend and reenact §11-12-1, §11-12-26 and §11-12-75 of said code; to amend and reenact §11-13-2e and §11-13-2o of said code; to amend and reenact §11-13A-2, §11-13A-3 and §11-13A-20a of said code; to amend and reenact §11-13B-3 of said code; to amend said code by adding thereto a new section, designated §11-13B-19; to amend said code by adding thereto a new section, designated §11-13C-17; to amend said code by adding thereto a new section, designated §11-13D-11; to amend said code by adding thereto a new section, designated §11-13E-8; to amend said code by adding thereto a new section, designated §11-13F-6; to amend said code by adding thereto a new section, designated §11-13G-6; to amend said code by adding thereto a new section, designated §11-13J-13; to amend said code by adding thereto a new section, designated §11-13K-7; to amend said code by adding thereto a new section, designated §11-13N-13; to amend said code by adding thereto a new section, designated §11-13Q-22; to amend said code by adding thereto a new section, designated §11-13R-13; to amend said code by adding thereto a new section, designated §11-13S-11; to amend said code by adding thereto a new section, designated §11-15-34; to amend said code by adding thereto a new section, designated §11-15A-30; to amend said code by adding thereto a new article, designated §11-15C-1, §11-15C-2, §11-15C-3, §11-15C-4, §11-15C-5, §11-15C-6, §11-15C-7, §11-15C-8, §11-15C-9, §11-15C-10, §11-15C-11, §11-15C-12, §11-15C-13, §11-15C-14, §11-15C-15, §11-15C-16, §11-15C-17, §11-15C-18, §11-15C-19, §11-15C-20, §11-15C-21, §11-15C-22, §11-15C-23, §11-15C-24, §11-15C-25 and §11-15C-26; to amend said code by adding thereto a new section, designated §11-19-13; to amend said code by adding thereto two new sections, designated §11-21-8i and §11-21-96; to amend said code by adding thereto a new article, designated §11-21A-1, §11-21A-2, §11-21A-3, §11-21A-4, §11-21A-5, §11-21A-6, §11-21A-7, §11-21A-8, §11-21A-9, §11-21A-10, §11-21A-11, §11-21A-12, §11-21A-13, §11-21A-14, §11-21A-15, §11-21A-16, §11-21A-17, §11-21A-18, §11-21A-19, §11-21A-30, §11-21A-31, §11-21A-32, §11-21A-33, §11-21A-34, §11-21A-35, §11-21A-36, §11-21A-37, §11-21A-38, §11-21A-51, §11-21A-52, §11-21A-53, §11-21A-54, §11-21A-55, §11-21A-56, §11-21A-57, §11-21A-58, §11-21A-59, §11-21A-60, §11-21A-61, §11-21A-71, §11-21A-72, §11-21A-73, §11-21A-74, §11-21A-75, §11-21A-76, §11-21A-77, §11-21A-78, §11-21A-79, §11-21A-80 and §11-21A-81; to amend said code by adding thereto a new section, designated §11-23-29; to amend said code by adding thereto two new sections, designated §11-24-23h and §11-24-43; to amend said code by adding thereto a new section, designated §11-27-37; to amend said code by adding thereto a new article, designated §11-28-1, §11-28-2, §11-28-3, §11-28-4, §11-28-5, §11-28-6, §11-28-7, §11-28-8, §11-28-9, §11-28-10, §11-28-11, §11-28-12, §11-28-13, §11-28-14, §11-28-15, §11-28-16, §11-28-17, §11-28-18, §11-28-19, §11-28-20 and §11-28-21; and to amend said code by adding thereto a new section, designated §17A-3-4a, all relating generally to the comprehensive reform of the state's tax laws; granting county governments more flexibility in raising revenues; granting municipalities more flexibility in raising revenues; providing for the phase-out of ad valorem taxation of tangible personal property; allocating the revenues from ad valorem taxation of the property of public service businesses exclusively to the state; prospectively terminating the alternate-fuel motor vehicle tax credit; prospectively terminating the special method for appraising qualified capital additions to manufacturing facilities; revising the allocation of the authority to lay levies of ad valorem property taxes; extending the applicability of the Tax Crimes and Penalties Act to general excise tax, progressive income tax and business activities and profits tax; extending the applicability of the Tax Procedure and Administration Act to general excise tax, progressive income tax and business activities and profits tax; increasing the rate of tax on corporations with substantial land holdings and providing a credit against tax for severance taxes paid; phasing out business and occupation tax on the business of gas storage; phasing down the rate of business and occupation tax on the business of generating or selling electricity; terminating the imposition of tax on certain health care services; phasing out telecommunications tax; prospectively terminating the credits for business investment and jobs expansion, industrial expansion and revitalization, research and development, certain housing development, management information services facilities, facilities producing coal-based liquids, aerospace facilities and coal-loading facilities; reducing electric and natural gas utility rates for low-income customers; reducing telephone utility rates for low-income residential customers, neighbor investment and agricultural equipment; prospectively terminating the economic opportunity, strategic research and manufacturing investment tax credits; preserving the economic benefit of all terminated credits for taxpayers who gained entitlement to such credits prior to their termination; terminating consumers sales and service tax and use tax; imposing general excise tax; terminating soft drinks tax; terminating personal income tax; imposing progressive income tax; terminating business franchise tax; terminating corporation net income tax; phasing out health care provider tax; imposing business activities and profits tax; terminating motor vehicle title privilege tax; and providing an effective date of all such enactments based on the voters' ratification of the fair taxation amendment to the Constitution of West Virginia.

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 article, designated §7-5B-1, §7-5B-2, §7-5B-3, §7-5B-4, §7-5B-5, §7-5B-6 and §7-5B-7; that said code be amended by adding thereto a new article, designated §8-13C-1, §8-13D-2, §8-13D-3, §8-13D-4, §8-13D-5, §8-13D-6 and §8-13D-7; that said code be amended by adding thereto a new section, designated §11-1C-1c; that said code be amended by adding thereto a new section, designated §11-5-15; that §11-6-13, §11-6-14, §11-6-15, §11-6-18, §11-6-19, §11-6-20, §11-6-21, §11-6-22 and §11-6-23 of said code be amended and reenacted; that said code be amended by adding thereto a new section, designated §11-6D-9; that said code be amended by adding thereto a new section, designated §11-6F-7; that said code be amended by adding thereto four new sections, designated §11-8-1a, §11-8-2a, §11-8-3a and §11-8-23a; that §11-8-4, §11-8-5, §11-8-6, §11-8-6a, §11-8-6b, §11-8-6c, §11-8-6d, §11-8-6e, §11-8-6f, §11-8-12, §11-8-12a, §11-8-13, §11-8-16, §11-8-17 and §11-8-24 of said code be amended and reenacted; that §11-9-2 of said code be amended and reenacted; that §11-10-3 be amended and reenacted; that said code be amended by adding thereto a new section, designated §11-10-11b; that §11-12-1, §11-12-26 and §11-12-75 of said code be amended and reenacted; that §11-13-2e and §11-13-2o of said code be amended and reenacted; that §11-13A-2, §11-13A-3 and §11-13A-20a of said code be amended and reenacted; that §11-13B-3 of said code be amended and reenacted; that said code be amended by adding thereto a new section, designated §11-13B-19; that said code be amended by adding thereto a new section, designated §11-13C-17; that said code be amended by adding thereto a new section, designated §11-13D-11; that said code be amended by adding thereto a new section, designated §11-13E-8; that said code be amended by adding thereto a new section, designated §11-13F-6; that said code be amended by adding thereto a new section, designated §11-13G-6; that said code be amended by adding thereto a new section, designated §11-13J-13; that said code be amended by adding thereto a new section, designated §11-13K-7; that said code be amended by adding thereto a new section, designated §11-13N-13; that said code be amended by adding thereto a new section, designated §11-13Q-22; that said code be amended by adding thereto a new section, designated §11-13R-13; that said code be amended by adding thereto a new section, designated §11-13S-11; that said code be amended by adding thereto a new section, designated §11-15-34; that said code be amended by adding thereto a new section, designated §11-15A-30; that said code be amended by adding thereto a new article, designated §11-15C-1, §11-15C-2, §11-15C-3, §11-15C-4, §11-15C-5, §11-15C-6, §11-15C-7, §11-15C-8, §11-15C-9, §11-15C-10, §11-15C-11, §11-15C-12, §11-15C-13, §11-15C-14, §11-15C-15, §11-15C-16, §11-15C-17, §11-15C-18, §11-15C-19, §11-15C-20, §11-15C-21, §11-15C-22, §11-15C-23, §11-15C-24, §11-15C-25 and §11-15C-26; that said code be amended by adding thereto a new section, designated §11-19-13; that said code be amended by adding thereto two new sections, designated §11-21-8i and §11-21-96; that said code be amended by adding thereto a new article, designated §11-21A-1, §11-21A-2, §11-21A-3, §11-21A-4, §11-21A-5, §11-21A-6, §11-21A-7, §11-21A-8, §11-21A-9, §11-21A-10, §11-21A-11, §11-21A-12, §11-21A-13, §11-21A-14, §11-21A-15, §11-21A-16, §11-21A-17, §11-21A-18, §11-21A-19, §11-21A-30, §11-21A-31, §11-21A-32, §11-21A-33, §11-21A-34, §11-21A-35, §11-21A-36, §11-21A-37, §11-21A-38, §11-21A-51, §11-21A-52, §11-21A-53, §11-21A-54, §11-21A-55, §11-21A-56, §11-21A-57, §11-21A-58, §11-213A-59, §11-21A-60, §11-21A-61, §11-21A-71, §11-21A-72, §11-21A-73, §11-21A-74, §11-21A-75, §11-21A-76, §11-21A-77, §11-21A-78, §11-21A-79, §11-21A-80 and §11-21A-81; that said code be amended by adding thereto a new section, designated §11-23-29; that said code be amended by adding thereto two new sections, designated §11-24-23h and §11-24-43; that said code be amended by adding thereto a new section, designated §11-27-37; that said code be amended by adding thereto a new article, designated §11-28-1, §11-28-2, §11-28-3, §11-28-4, §11-28-5, §11-28-6, §11-28-7, §11-28-8, §11-28-9, §11-28-10, §11-28-11, §11-28-12, §11-28-13, §11-28-14, §11-28-15, §11-28-16, §11-28-17, §11-28-18, §11-28-19, §11-28-20 and §11-28-21; and that said code be amended by adding thereto a new section, designated §17A-3-4a, all to read as follows:
CHAPTER 7. COUNTY COMMISSIONS AND OFFICERS.

ARTICLE 5B. COUNTY GOVERNMENT FISCAL POWERS FLEXIBILITY.
§7-5B-1. Short title.
This article is known and may be cited as the "County Government Fiscal Powers Flexibility Act."
§7-5B-2. Legislative findings and declaration of purpose.
The Legislature finds that counties in this State need greater flexibility to efficiently raise revenues sufficient to provide the public services expected and demanded by their residents and to adequately compensate and provide benefits for their employees. The Legislature does therefore declare that the purpose of this article shall be to authorize the counties of this State to efficiently raise adequate revenues to fund those important obligations.
§7-5B-3. Definitions.
For purposes of this article, the term:
(a) "Commission" means the duly elected governing body of a county;
(b) "County" means one of the fifty-five political subdivisions of this State as established in section one, article two of the Constitution of this State.
§7-5B-4. Add-on taxes authorized.
(a) The commission may, by order entered in accordance with the provisions of this article, impose an add-on progressive income tax on the residents of the county or an add-on general excise tax on the privilege of selling tangible personal property and rendering selected services in the county, or both, all to be in accordance with this article.
(b) The base of an add-on general excise tax imposed pursuant to this article shall be identical to the base of the general excise tax imposed pursuant to article fifteen-c, chapter eleven of this code on sales made and services rendered within the boundaries of the county: Provided, That all exemptions and exceptions from the general excise tax imposed pursuant to article fifteen-c of chapter eleven of this code shall also apply to the add-on general excise tax.
(c) The rate of an add-on general excise tax imposed by a county pursuant to this article shall be provided in an order entered by the commission. The rate shall be stated in tenths of a cent on a dollar of sales and services subject to the tax, and may not exceed one cent.
(d) The base of an add-on progressive income tax imposed pursuant to this article shall be identical to the base of the progressive income tax imposed pursuant to article twenty-one-a, chapter eleven of this code on income earned by residents of the county imposing it: Provided, That all deductions, exemptions and exceptions allowed for the progressive income tax imposed pursuant to article twenty-one-a of chapter eleven of this code shall also apply to the add-on progressive income tax.
(e) The rate of an add-on progressive income tax imposed by a county pursuant to this article shall be provided in an order entered by the Commission. The rate shall be stated in tenths of one percent of income subject to the tax and may not exceed one percent.
(f) The order of a commission imposing an add-on general excise tax or an add-on progressive income tax shall provide that the State Tax Commissioner shall administer, assess, collect and enforce the tax on behalf of and as the agent for the county as provided in section eleven-a, article ten of chapter eleven of this code.
(g) Any taxes imposed pursuant to the authority of this section shall be effective on and after the date of entry of an order of the commission imposing such tax, or at such later date expressly designated in the order.
§7-5B-5. Notice; hearing.
A commission desiring to impose an add-on general excise tax or an add-on progressive income tax shall conduct a public hearing. A notice of the public hearing shall be published as a Class I-0 legal advertisement in compliance with article three, chapter fifty-nine of this code at least twenty days prior to the scheduled hearing. In addition to the time and place of the hearing, the notice must also State:
(a) The purpose of the hearing;
(b) The base and rate of the tax that would be imposed. At the time and place set forth in the notice, the Commission shall afford the opportunity to be heard to any residents of the county. If the Commission, following the public hearing, determines it advisable and in the public interest to enter an order imposing an add-on general excise tax, or an add-on progressive income tax, it shall proceed according to the provisions of section six of this article.
§7-5B-6. Order to impose add-on general excise tax or add-on progressive income tax.

If a hearing has been conducted as provided in section five of this article, and the commission has determined it is advisable and in the public interest to adopt an ordinance imposing an add-on general excise tax, or an add-on progressive income Tax, it may impose the tax by entry of an order as provided in article eleven of this chapter: Provided, That, without conducting another public hearing, the commission may not amend, alter or change in any manner the rate of tax as Stated in the notice of the public hearing described in section five of this article. In addition to all other requirements, the order shall contain the following:
(1) The base and rate of the add-on general excise tax or the add-on progressive income tax that would be imposed; and
(2) The manner in which the tax will be administered.
§7-5B-7. Effective date of article.
Notwithstanding the date of enactment of the act of the Legislature enacting this article, this article shall not become operational and shall have no force and effect until the first day of January of the first calendar year following the year in which the voters ratify the Fair taxation Amendment to the Constitution of this State.
CHAPTER 8. MUNICIPAL CORPORATIONS.

ARTICLE 13C. MUNICIPAL FISCAL POWERS FLEXIBILITY.
§8-13C-1. Short title.
This article is known and may be cited as the "Municipal Fiscal Powers Flexibility Act."
§8-13C-2. Legislative findings and declaration of purpose.
The Legislature finds that municipalities in this State need greater flexibility in their authority to efficiently raise sufficient revenues to provide the public services expected and demanded by their residents and to adequately compensate and provide benefits for their employees. The Legislature does therefore declare that the purpose of this article shall be to authorize the municipalities of this State to efficiently raise adequate revenues to fund those important obligations.
§8-13C-3. Definitions.
For purposes of this article, the term:
(a) "Council" means the duly elected governing body of a municipality;
(b) "Municipality" means a municipal corporation recognized as such in chapter eight of this code.
§8-13C-4. Add-on taxes authorized.
(a) The council may, by ordinance adopted in accordance with the provisions of this article, impose an add-on progressive income tax or an add-on general excise tax on the privilege of selling tangible personal property and rendering selected services in the municipality, or both, all to be in accordance with this section.
(b) The base of an add-on general excise tax imposed pursuant to this article shall be identical to the base of the general excise tax imposed pursuant to article fifteen-c, chapter eleven of this code on sales made and services rendered within the boundaries of the municipality: Provided, That all exemptions and exceptions from the general excise tax imposed pursuant to article fifteen-c of chapter eleven of this code shall also apply to the add-on general excise tax.
(c) The rate of an add-on general excise tax imposed by a municipality pursuant to this article shall be provided in an ordinance adopted by the council. The rate shall be Stated in tenths of a cent on a dollar of sales and services subject to the tax, and may not exceed one cent.
(d) The base of an add-on progressive income tax imposed pursuant to this article shall be identical to the base of the progressive income tax imposed pursuant to article twenty-one-a, chapter eleven of this code on income earned by residents of the municipality imposing it: Provided, That all deductions, exemptions and exceptions allowed for the progressive income tax imposed pursuant to article twenty-one-a of chapter eleven of this code shall also apply to the add-on progressive income tax.
(e) The rate of an add-on progressive income tax imposed by a municipality pursuant to this article shall be provided in an ordinance adopted by the council. The rate shall be Stated in tenths of one percent of income subject to the tax and may not exceed one percent.
(f) The ordinance of a municipality imposing an add-on general excise tax or an add-on progressive income tax shall provide that the State Tax Commissioner shall administer, assess, collect and enforce the tax on behalf of and as the agent for the municipality as provided in section eleven-a, article ten of chapter eleven of this code.
(g) Any taxes imposed pursuant to the authority of this section shall be effective on and after the date of adoption of an ordinance imposing such tax, or at such later date expressly designated in the ordinance.
§8-13C-5. Notice; hearing.
The council of a municipality desiring to impose an add-on general excise tax or an add-on progressive income tax shall conduct a public hearing. A notice of the public hearing shall be published as a Class I-0 legal advertisement in compliance with article three, chapter fifty-nine of this code at least twenty days prior to the scheduled hearing. In addition to the time and place of the hearing, the notice must also State:
(a) The purpose of the hearing;
(b) The base and rate of the tax that would be imposed.
At the time and place set forth in the notice, the council shall afford the opportunity to be heard to any residents of the municipality. If the council, following the public hearing, determines it advisable and in the public interest to adopt an ordinance imposing an add-on general excise tax, or an add-on progressive income tax, it shall proceed according to the provisions of section six of this article.
§8-13C-6. Ordinance to impose add-on general excise tax or add-on progressive income tax.

If a hearing has been conducted as provided in section five of this article, and the council has determined it is advisable and in the public interest to adopt an ordinance imposing an add-on general excise tax, or an add-on progressive income tax, it may impose the tax by ordinance as provided in article eleven of this chapter: Provided, That, without conducting another public hearing, the council may not amend, alter or change in any manner the rate of tax as Stated in the notice of the public hearing described in section five of this article. In addition to all other requirements, the ordinance shall contain the following:
(1) The base and rate of the add-on general excise tax or the add-on progressive income tax that would be imposed; and
(2) The manner in which the tax will be administered.
§8-13C-7. Effective date of article.
Notwithstanding the date of enactment of the act of the Legislature enacting this article, this article shall not become operational and shall have no force and effect until the first day of January of the first calendar year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
CHAPTER 11. TAXATION.

ARTICLE 1C. FAIR AND EQUITABLE PROPERTY VALUATION.
§11-1C-1c. Phase-out of taxation of tangible personal property upon ratification of an amendment to the Constitution authorizing the same.

(a) Regular levies. -- Notwithstanding anything in this code to the contrary, tangible personal property having a tax situs in this State that was taxable prior to the effective date of this section shall be exempt from regular levies of ad valorem property tax beginning on the first day of the first tax year next succeeding the effective date of this section: Provided, That all such tangible personal property except motor vehicles registered with the Division of Motor Vehicles shall be subject to regular levies of ad valorem property tax and taxed at one hundred percent of assessed value for the first tax year next succeeding the effective date of this section; at eighty percent of assessed value for the second tax year next succeeding the effective date of this section; at sixty percent of assessed value for the third tax year next succeeding the effective date of this section; at forty percent of assessed value for the third tax year next succeeding the effective date of this section; at twenty percent of assessed value for the fourth tax year next succeeding the effective date of this section; and shall not be subject to regular levies of ad valorem property tax for the fifth tax year next succeeding the effective date of this section and thereafter.
(b) Excess levies. -- Notwithstanding anything in this code to the contrary, tangible personal property having a tax situs in this State that was taxable prior to the effective date of this section shall, beginning on the first day of the first tax year next succeeding the effective date of this section, be exempt from excess levies of ad valorem property tax: Provided, That all such tangible personal property except for motor vehicles registered with the Division of Motor Vehicles shall continue to be subject to taxation at one hundred percent of assessed value for excess levies approved by the voters prior to the effective date of this section until the first day of the sixth tax year next succeeding the effective date of this section when no tangible personal property shall then or thereafter be subject to excess levies of ad valorem tax.
(c) Levies for bonded indebtedness. -- Notwithstanding anything in this code to the contrary, tangible personal property having a tax situs in this State that was taxable prior to the effective date of this section shall, beginning on the first day of the first tax year next succeeding the effective date of this section, be exempt from levies of ad valorem property tax for bonded indebtedness approved by the voters: Provided, That all such tangible personal property except for motor vehicles registered with the Division of Motor Vehicles shall continue to be subject to taxation at one hundred percent of assessed value for levies for bonded indebtedness approved by the voters prior to the effective date of this section until the first day of the sixth tax year next succeeding the effective date of this section when no tangible personal property shall then and thereafter be subject to levies of ad valorem tax for bonded indebtedness.
(d) Effective date. -- Notwithstanding the date of enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the day the voters ratify the Fair Taxation Amendment to the Constitution of this State authorizing the phase-out and repeal of the ad valorem taxation of tangible personal property as provided in this section.
ARTICLE 5. ASSESSMENT OF PERSONAL PROPERTY.
§11-5-15. Repeal of personal property taxation by Fair Taxation Amendment.

Notwithstanding anything contained in this code to the contrary, the provisions of this article shall cease to be operative and shall no longer have any force or effect with respect to tax years following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State repealing the ad valorem taxation of tangible personal property: Provided, That, the foregoing notwithstanding, the provisions of this article are preserved and shall remain operative and shall be in force and effect for all tax years next preceding and including the year in which the Fair Taxation Amendment shall have been ratified by the voters and including, further, the years subsequent to such ratification until the first tax year next succeeding the end of the phase-out of the ad valorem taxation of tangible personal property as provided in the Fair Taxation Amendment and as implemented in section one-c, article one-c of this chapter.
ARTICLE 6. ASSESSMENT OF PUBLIC SERVICE BUSINESSES.
§11-6-13. Apportionment of value among counties, districts and municipalities.

In case the list and valuation of the property filed with the Tax Commissioner be satisfactory to the Board of Public Works, or upon assessment of the property of such owner or operator being made by the Board of Public Works, the Auditor shall immediately apportion to each county, in which any part of such property is situated, the value of the property therein of every such owner or operator as valued or assessed hereunder and the relative value of such operating property within each county compared to the value of the total operating property within the State, to be determined upon such factors as the Auditor shall deem proper; and further shall apportion such values among the several districts, being school districts, and a proportional valuation to each municipality therein, in which any part of such property is situated, according to the value thereof, as near as may be, and forthwith shall certify to the county commission of such county the values so apportioned. The Clerk of the County Commission shall forthwith certify such values to the school district and to the several municipalities, respectively, in such county.
Inasmuch as there was litigation challenging the long-term apportionment method consistently used by the State Auditor under the provisions of this section by which distribution was made of the ad valorem tax values of the operable properties and assets of public service businesses attributable to more than one county, and with the Legislature subsequently approving, codifying and ordering the continuance of such method of apportionment; and inasmuch as the Legislature having changed such apportionment method and having vested the authority to accomplish such and to issue assessment under this article through actions of the State Tax Commissioner rather than assessment by the Board of Public Works and apportionment by the State Auditor, pursuant to chapter one hundred fifty-nine, acts of the Legislature, regular session, one thousand nine hundred eighty-five; and in light of the Legislature being unaware of the dramatic shifting of valuations among counties as a result of application or use of such new apportionment method and thus desiring to return to the former method of apportionment and that the same be performed by the State Auditor, as formerly and that final assessment activity, as such, and hearings in respect thereof be performed by the Board of Public Works, as formerly; therefore, the Legislature finds and determines that apportionment and distribution of ad valorem tax valuations hereunder should and are to be performed by the State Auditor promptly and for current periods and on the basis of the above-mentioned long-term apportionment method used consistently by the State Auditor and with the valuations as determined by the application of such apportionment method to be certified forthwith to the county commissions. Specifically, as to the true and actual values of the property of public service businesses reported on their tax returns required to be filed by the first day of May, one thousand nine hundred eighty-five and as thereafter determined by tentative assessment and final assessment by the Tax Commissioner or by court decision for tax fiscal year one thousand nine hundred eighty-six, the State Auditor shall, by the first day of March, one thousand nine hundred eighty-six, or as soon as may be practicable, apportion and distribute such values, as required, to the respective levying bodies and on the basis of his or her using the long-term, consistent apportionment method of his or her office as long engaged in and applied under the provisions of this section and article. The foregoing notwithstanding, this section shall not apply to or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
§11-6-14. Certification of levies to Auditor.
The clerk of the county court commission of every county in which any property lies which was so assessed shall, within thirty days after the county and district levies are laid by such court, certify to the Auditor the amount levied upon each one hundred dollars' value of the property of each class in the county for county purposes, and on each one hundred dollars of the value of the property of each class in each magisterial district for the district purposes. It shall be the duty of the Secretary of the Board of Education of every school district and independent district in which any part of the property lies, within thirty days after the levies are laid therein for free school and building purposes, or either, to certify to the Auditor the amount so levied on each one hundred dollars' value of the property of each class therein for each of such purposes; and it shall be the duty of the recorder, clerk or other recording officer of every municipal corporation in which any part of the property lies, within the same time, after levies are laid therein for any of the purposes authorized by law, to certify to the Auditor the amount levied upon each one hundred dollars' value of the property of each class therein for each and every purpose. The foregoing notwithstanding, this section shall not apply to or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
§11-6-15. Failure of officers to perform duties as to property of public service corporations.

Any clerk of a county court commission, secretary of the board of education, or recorder, clerk or other recording officer of a municipal corporation, who shall fail to perform any of the duties herein required of him or her shall be guilty of a misdemeanor and, upon conviction thereof, fined not less than one hundred nor more than five hundred dollars. In case of the failure of any such officers to furnish to the Auditor the certificate herein required, the Auditor may obtain the rate of taxation for any of such the purposes from the copies of the land books on file in his or her office, if the same be found in such the books, if not, in such other way or manner as he or she may deem consider necessary or proper for the purpose. The foregoing notwithstanding, this section shall not apply to or be in effect for any year subsequent to the year in which the voters notify the Fair Taxation Amendment to the Constitution of this State.
§11-6-18. Payment of assessment by owner or operator.
The Auditor shall, as soon as possible after such assessment is completed, make out and transmit by mail or otherwise, to such owner or operator, a Statement of all taxes and levies so charged, and it shall be the duty of such owner or operator, so assessed and charged, to pay one half of the amount of such taxes and levies into the treasury of the State by the first day of September and the remaining one-half by the first day of the following March, subject to a deduction of two and one-half per centum if the taxes be paid on or before the date due. If such owner or operator fail to pay such taxes and levies when due, interest thereon at the rate of nine per centum per annum until paid shall be added, and the Auditor shall certify, after the date the second installment is due, to the sheriff of each county, the amount of such taxes and levies assessed within his or her county; and it shall be the duty of every sheriff to collect and account for such taxes and levies in the same manner as other taxes are levied or collected and accounted for by him or her. The payment of such taxes and levies by any such owner or operator shall not prejudice or affect the right of such owner or operator to obtain relief against the assessment or valuation of its property in proceedings now pending or hereafter brought under the provisions of section twelve of this article, or in any suit, action or proceeding in which such relief may be obtainable; and if under the provisions of said section twelve or in any suit, action or proceeding, it be ascertained that the assessment or valuation of the property of such owner or operator is too high and the same is accordingly corrected, it shall be the duty of the Auditor of the State to issue to the owner or operator a certificate showing the amount of taxes and levies which have been overpaid, and such certificate shall be receivable thereafter for the amount of such overpayment in payment of any taxes and levies assessed against the property of such owner or operator, its successors or assigns. It shall likewise be the duty of said Auditor to certify to the county courts commissions, school districts and municipalities, the amounts of the respective overpayments distributable to such counties, school districts and municipalities. All moneys received by the Auditor under the provisions of this section shall be transmitted to the several counties within twenty days from receipt thereof: Provided, That effective on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the last two sentences of this section next preceding this proviso shall cease to be of force and effect and no such certification of amounts or payment of moneys by the Auditor to the counties, school districts and municipalities shall then or thereafter be made.
§11-6-19. Accounting by sheriff for district and municipal taxes from public service corporations.

When the district and independent school district taxes and levies are collected by the sheriff, he or she shall account for and pay the same as treasurer of such district. When such taxes and levies due to a municipal corporation are collected by the sheriff he or she shall pay the same to the proper collecting officer, or treasurer of such municipal corporation, or otherwise, as the council or other proper authority thereof may direct. The foregoing notwithstanding, this section shall not apply to or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
§11-6-20. No release of taxes assessed against such corporations.
Neither the county court commission of any county, nor any board of education, nor the municipal authorities of any incorporated town, shall have jurisdiction, power or authority, by compromise or otherwise, to remit or release any portion of the taxes so assessed upon the property of any such owner or operator, and when such taxes or levies are certified to the sheriff of any county for collection, as aforesaid, it shall be his or her duty to collect the whole thereof, regardless of any order or direction of any such county court Commission, board of education or municipal authority to the contrary; and, if he or she fail to do so, he or she and his or her sureties in his or her official bond shall, unless he or she be restrained or prohibited from so doing by legal process from some court having jurisdiction to issue the same, be liable thereof therefor for such taxes and levies he or she may so fail to collect, if he or she could have collected the same by the use of due diligence. Any member of the county court commission or board of education, or of the council of a municipal corporation, who shall vote to remit or release any part of the taxes, so assessed on the property of any such owner or operator, shall be guilty of a misdemeanor and fined five hundred dollars, and shall be removed from his or her office by the court by which the judgment of such fine is rendered, in addition to such fine. The foregoing notwithstanding, this section shall not apply or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
§11-6-21. Accounting for levies against public service corporations.

When such taxes and levies are paid into the treasury, as herein provided, the Auditor shall account to the sheriff of each of the counties, to which any sum so paid in for county levies belongs, for the amount due such county, and may arrange the same with such sheriff in any settlement for State taxes in such a way as may be most convenient; and the sheriff shall account to the county court commission of his or her county for the amount so received by him or her, in the same manner as for other county levies. The amount so paid for each district and independent school district shall be added to the distributable share of the school fund payable to such district, and shall be paid upon the requisition of the county superintendent of free schools in like manner as other school moneys are paid. The foregoing notwithstanding, this section shall not apply or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
§11-6-22. Certification by Auditor of amount chargeable to sheriff from levies against public service corporations; payment of amount due municipality.

The Auditor shall certify to the county court commission and the county superintendent of schools of every such county, on or before the first day of February in each year, the respective amounts with which the sheriff thereof is chargeable on account of the various levies upon the property of such owner or operator. The amount so paid in for each municipal corporation shall, as soon as received by the Auditor, be paid over to the sheriff, or the treasurer of such municipal corporation, or to such other officer of the municipality as the council may designate, and the Auditor shall report such payment to the council. But the failure of the clerk of any county court commission, or the secretary of any board of education, or the proper officer of any municipal corporation, to certify the levies to the Auditor within the time herein prescribed shall not invalidate or prevent the assessment required by this article, but the Auditor shall make the assessment and proceed to collect or certify the same to the sheriff as soon as practicable after he or she shall have obtained the information necessary to make such assessment. The foregoing notwithstanding, this section shall not apply or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
§11-6-23. Lien of taxes; notice; collection by suit.
The amount of taxes and levies assessed under this article shall constitute a debt due the State or county, district or municipal corporation entitled thereto, and shall be a lien on all of the property and assets of the taxpayer within the State. The lien shall attach as of the thirty-first day of December following the commencement of the assessment year and shall be prior to all other liens and charges. The Auditor shall, between the first and fifteenth day of May of each year, prepare a list of the taxpayers delinquent in the payment of such taxes and levies, setting forth their respective addresses and the amount of State, county, district and municipal taxes due from each, which said list shall be certified by the Auditor to the Board of Public Works and filed in the office of the Secretary of State. The Secretary of State shall preserve the list in his or her office, and a certificate from him or her that any taxpayer mentioned in such list is delinquent in the amount of taxes assessed under this article shall be prima facie evidence thereof. Within ten days after the filing of such list, the secretary of State shall give written notice of such delinquency by registered mail to each of such delinquent taxpayers at his, her or its, last known post office address; and upon the failure of any such delinquent taxpayer to pay said taxes within thirty days from the mailing of such notice, it shall be the duty of the Attorney General to enforce the collection of such taxes and levies, and for that purpose he or she may distrain upon any personal property of such delinquent taxpayer, or a sufficient amount thereof to satisfy said taxes, including accrued interest, penalties and costs.
The foregoing notwithstanding, effective on the first day of January of the year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the taxes and levies assessed under this article shall not constitute a debt due any county, district or municipality of this State and then and thereafter such taxes and levies shall only be due to be paid to the State.
The Attorney General may also enforce the lien created by this section on the real estate of such delinquent taxpayer by instituting a suit, or suits, in equity in the circuit court of Kanawha County, in the name of the State, in which such delinquent taxpayers shall be made defendants. In the bill filed in any such suit it shall be sufficient to allege that the defendant or defendants have failed to pay the taxes hereunder and that each of them justly owes the amount of property taxes, levies and penalties Stated therein, which amount shall be computed up to the first day of the month in which the bill was filed. No such defendant shall plead that the Secretary of State failed to give notice as prescribed by this section. If, upon the hearing of such suit, it shall appear to the court that any defendant has failed to pay such taxes and accrued penalties, the court shall enter a decree against such defendant for the amount due, and if the decree be not paid within ten days after made, the court shall enter a decree directing a sale of the real estate subject to said lien, or so much thereof as may be necessary to satisfy said taxes, including interest, penalties and costs. When two or more taxpayers are included in one suit, the court shall apportion the cost thereof among them as it may deem just.
ARTICLE 6D. ALTERNATIVE-FUEL MOTOR VEHICLE TAX CREDIT.
§11-6D-9. Prospective termination of credit; effective date.
(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no entitlement to any credit under this article may result from, and no credit is available to any taxpayer for, purchasing or converting an alternative-fuel motor vehicle on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits for persons engaged in business. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such natural person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article had the provisions of article twenty-one or article twenty-four applied to the tax year or years.
(c) Preservation of economic benefit of previously earned credits for persons not engaged in business. -- Notwithstanding the provisions of subsection (a) of this section, any natural person not subject to the tax imposed under article twenty-eight of this chapter who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-one-a of this chapter in an amount and for the tax year or years that will secure for such natural person an actual economic benefit equal in amount to the economic benefit he or she would have received by virtue of the credit provided in this article had the provisions of article twenty-one of this code applied to the tax year or years.
(d) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State which, among other things, prospectively repeals certain tax credits provided in this code.
ARTICLE 6F. SPECIAL METHOD FOR APPRAISING QUALIFIED CAPITAL ADDITIONS TO MANUFACTURING FACILITIES.

§11-6F-7. Prospective termination of special method; effective date.

(a) Prospective termination of special method. -- Notwithstanding any other provision of this code to the contrary, for tax years beginning on and after the effective date of this section the special valuation method described in this article shall not apply to any qualified capital addition to a manufacturing facility and the use of the special valuation method described in this article shall not be available to any taxpayer.
(b) Preservation of economic benefit of previously established qualified capital additions. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter who has placed in service or use a qualified capital addition to a manufacturing facility as provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such natural person an actual economic benefit equal in amount to the economic benefit he or she would have received by virtue of the application of the special valuation method described in this article had the provisions of this article applied to the tax year or years.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State which, among other things, prospectively repeals the special valuation method provided in this article.
ARTICLE 8. LEVIES.
§11-8-1a. Declarations of voters' intent in ratifying the Fair Taxation Amendment.

Whereas, in order for the changes in this article to become operative and in effect, the voters of this State shall have ratified the Fair Taxation Amendment; and
Whereas, to confirm and clarify the voters' intent upon ratifying the Fair Taxation Amendment, the Legislature has, concurrent with the adoption of the joint resolution placing the Fair Taxation Amendment on the ballot, also enacted the Fair Tax Act of 2003 implementing, upon its ratification, the Fair Taxation Amendment; and
Whereas, among the objects and intended effects of the Fair Taxation Amendment were the improved flexibility of local government units to raise, in a fair, efficient and effective manner, revenues sufficient to provide for the necessary public services the voters expect and demand of them; and
Whereas, also among the objects and intended effects of the Fair Taxation Amendment were the adequate, equitable and effective funding of public education to the end that the Legislature would provide for a thorough and efficient system of public schools throughout the State; and
Whereas, also among the objects and intended effects of the Fair Taxation Amendment was the repeal of the ad valorem taxation of tangible personal property because the imposition of such taxation on motor vehicles in this rural State is regressive as its citizens depend on such motor vehicles to travel to gainful employment and to gain access to health care and other critical public services; and
Whereas, the imposition of ad valorem taxation on tangible personal property used in business also makes this State highly uncompetitive in attracting the capital investment needed to provide gainful employment for its citizens and a growing tax base for support of important public services including education, health care and safety; therefore, the Legislature doth find and declare:
That the provisions of this article hereinafter contained, as amended by the Fair Tax Act of 2003, are as it verily believes fully with the spirit of the Fair Taxation Amendment and are reasonable and necessary to honor the intent of the voters in ratifying it with respect to objects herein above Stated.
§11-8-2a. Legislative findings with respect to circumstances giving rise to the Fair Taxation Amendment.

The Legislature, having carefully studied the tax structure of the State and of it political subdivisions, finds:
(1) That if county commissions and municipalities are to provide the residents of their jurisdictions with the level of public services they expect and demand, such local government units must have more flexibility in raising revenue than has heretofore been available to them.
(2) That the ad valorem taxation of tangible personal property in this rural State is both regressive and undermines the competitiveness of this State in attracting the investment of capital and the creation of jobs.
(3) That reliance on the ad valorem property tax to fund public education dilutes the fairness and efficiency of the methods the Legislature has adopted to provide for a thorough and efficient system of public schools.
(4) That the amendments to this article, which become operative and in effect upon the voters' ratification of the Fair Taxation Amendment to this State's Constitution, will address the adverse circumstances described in the foregoing findings.
§11-8-3a. Purposes of amendments to this article implementing changes in ad valorem taxation upon ratification of the Fair Taxation Amendment.

In order that the revenue to be derived from ad valorem taxes to be assessed upon real property throughout the State may be reallocated among the levying units of the State in a manner that such allocation shall not exceed the maximum levies that may be assessed upon each respective class of property as required by the Fair Taxation Amendment, and
In order, further, that the taxes to be assessed shall be levied and collected with uniformity coextensive with the territory of the taxing unit within which such taxes are to be levied and collected as required by the Fair Taxation Amendment, without interference by one taxing unit with the right of another such unit to levy and collect for its purposes and within its territorial extent, and
In order, further, that the taxing units throughout the State may be furnished with the means of providing: (1) The sinking fund and interest requirement of their now existing indebtedness; and (2) the requirements of their respective current operating expenses, all as a result of the changes in the tax structure of this State as required by ratification of the Fair Taxation Amendment, this article is hereby amended.
The purpose of the amendments to this article which become operative and take effect upon the voters' ratification of the Fair Taxation Amendment, is to provide the maximum rates for the levies which may be laid by the several taxing units in the State as a result of the provisions of the Fair Taxation Amendment and to provide for the application of the revenues derived therefrom first to the payment of legal contractual indebtedness and then to the maintenance of indispensable governmental functions as herein provided.
§11-8-4. Definition of taxing units.
(a) The taxing units of the State for the purposes of this article are declared to be: (1) The State; (2) the county, for all county purposes including indebtedness other than school indebtedness; (3) present school districts for current supplemental local option school purposes; (4) school districts existing prior to the twenty-second day of May, one thousand nine hundred thirty-three, for school debt service purposes; (5) magisterial and other road districts for road and other debt service purposes other than county road debts; (6) other specially created taxing districts for indebtedness existing at the time of the adoption of the Tax Limitation Amendment; and (7) municipalities for municipal purposes including municipal debt service purposes.
(b) Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand four those amendments shall not become operational and shall have no force and effect until the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
§11-8-5. Classification of property for levy purposes.
(a) For the purpose of levies, property shall be classified as follows:
Class I. All tangible personal real property employed exclusively in agriculture, including horticulture and grazing;
All products of agriculture (including livestock) while owned by the producer;
All notes, bonds, bills and accounts receivable, stocks and any other intangible personal property; of public service businesses.
Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand four those amendments shall not become operational and shall have no force and effect until the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
Class II II-A. All real property owned, used and occupied by the owner exclusively for residential purposes situated outside of municipalities;
All farms, including land used for horticulture and grazing, occupied and cultivated by their owners or bona fide tenants situated outside of municipalities;
Class II-B. All real property owned, used and occupied by the owner exclusively for residential purposes and situated inside of municipalities;
All farms, including land uses for horticulture and grazing, occupied and cultivated by their owners or bona fide tenants and situated inside of municipalities;
Class III. All real and personal property situated outside of municipalities, exclusive of Classes I and II;
Class IV. All real and personal property situated inside of municipalities, exclusive of Classes I and II.
(b) Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand four those amendments shall not become operational and shall have no force and effect until the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
§11-8-6. Aggregate of taxes on different classifications; taxing units authorized to lay levies.

The aggregate of taxes assessed in any one year by all levying bodies, except as provided by section twenty-three of this article, shall not exceed fifty cents on each one hundred dollars' assessed valuation on Class I property; one dollar on Class II property; one dollar fifty cents on Class III property; and two dollars on Class IV property.
The fiscal bodies of the taxing units of the State are hereby authorized to lay levies within the limitations of the "Tax Limitation Amendment" for the purposes and subject to the several maximums specified by sections six-a to seven, inclusive, of this article. The foregoing notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State the maximum rate of taxation on Class I property shall be one dollar fifty cents on each one hundred dollars' assessed valuation; one dollar on Classes II-A and II-B property; one dollar fifty cents on Class III property and two dollars on Class IV property.
§11-8-6a. Levies on each classification by board of public works.
(a) The State Board of Public Works shall levy as provided by section eight as follows:
On Class I property, twenty-five hundredths of one cent; on Class II property, five tenths of one cent; and on Classes III and IV property, one cent. The foregoing notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the levy of the State Board of Public Works shall be as follows:
On Class I property, one hundred fifty hundredths cents; on Class II-A and Class II-B property five and nine hundredths cents; and on Classes III and IV property, ten and eighteen hundredths cents.
Whenever the State Board of Public Works finds the revenues from all sources have been or will be insufficient to meet the requirements for interest and sinking funds on State road bonds, said State Board of Public Works shall levy for said purposes as provided by section eight, whatever rates of levy are necessary to meet the requirements for interest and sinking funds on State road bonds issued prior to November eight, one thousand nine hundred thirty-two, which rates of levy shall be as follows:
On Class I property, one cent; on Class II property, two cents; and on Classes III and IV property, four cents, or multiples thereof or in like ratio on all property subject to taxation in the State.
§11-8-6b. Maximum levies on each classification by county commissions; order of levies.

County courts commissions are hereby authorized to lay not in excess of the following maximum levies, for the purposes specified and in the following order:
(1) With respect to the county as a whole for the payment of: (a) Interest and sinking fund requirements for bonded indebtedness incurred prior to the adoption of the Tax Limitation Amendment; and (to the extent not so required); (b) other legally incurred contractual indebtedness, not bonded, if any, incurred prior to the adoption of the Tax Limitation Amendment, of the county as follows: On Class I property, twenty-five one hundredths of one cent; on Class II property, one half of one cent; and on Classes III and IV property, one cent.
(2) With respect to a magisterial or special taxing district for which the county court is required to lay the levy, for the payment of: (a) Interest and sinking fund requirements for bonded indebtedness, incurred prior to the adoption of the Tax Limitation Amendment; and (to the extent not so required); (b) other legally incurred contractual indebtedness not bonded, if any, incurred prior to the adoption of the Tax Limitation Amendment, as follows: On Class I property, two and fifteen one hundredths cents; on Class II property, four and three-tenths cents; and on Classes III and IV property, eight and six-tenths cents.
(3) For general county current expense as follows: On Class I property, eleven and nine-tenth cents; on Class II property, twenty-three and eight-tenths cents; and on Classes III and IV property, forty-seven and six-tenths cents. The foregoing notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the maximum levies for general county current expense shall be as follows: On Class II-A property, sixty-nine and ninety-one hundredths cents; on Class II-B property, fifty-six and fourteen hundredths cents; on Class III property, one hundred thirty-nine and eighty-two hundredths cents; and on Class IV property, one hundred twelve and twenty-eight hundredths cents. But in a county where the total assessed valuation of all classes of property is less than six million dollars, the county court commission may, with the prior written approval of the Tax Commissioner, exceed the rates of levy for general county current expense by not more than twenty-five percent of the rates specified: Provided, however, That if the rates of levy under paragraph (3) of this section are not required, in whole or in part, for the purpose for which they are allocated, the county court commission may, with the prior written approval of the State Tax Commissioner, surrender to the county board of education such unused parts of the authorized rates of levy as provided herein.
§11-8-6c. Maximum levies on each classification by county boards of education; order of levy; exceeding levy for school bond issues.

County boards of education are hereby authorized to lay not in excess of the following maximum levies, for the purposes specified and in the following order:
(1) With respect to a magisterial, independent or other school district existing in a county prior to the twenty-second day of May, one thousand nine hundred thirty-three, or any special taxing district for which the board of education is required to lay the levy, for the payment of: (a) Interest and sinking fund requirements for bonded indebtedness incurred prior to the adoption of the Tax Limitation Amendment; and (to the extent not so required); (b) other legally incurred contractual indebtedness not bonded, if any, incurred prior to the adoption of the Tax Limitation Amendment as follows: On Class I property, thirty-five one hundredths of one cent; on Class II property, seven tenths of one cent; and on Classes III and IV property, one and four-tenths cents.
(2) For either or both of: (a) The permanent improvement fund; and (b) the payment of interest and sinking fund requirements for bonded indebtedness incurred subsequent to the adoption of the Tax Limitation Amendment, as follows: On Class I property, one and five-tenths cents; on Class II property, three cents; and on Classes III and IV property, six cents.
(3) For the general current expenses of schools as follows: On Class I property, twenty-one and one-tenth cents; on Class II property, forty-two and two ten-tenths cents; and on Classes III and IV property, eighty-four and four-tenths cents. But if the Tax Commissioner has approved the levy of an additional amount for the general current expenses of the county, as authorized by section six-b, subsection three, the amount of the levy authorized for boards of education by this subsection shall be reduced by the Tax Commissioner to that extent.
If the rates of levy under paragraph (2) above are not required, in whole or in part, for the purposes for which they are allocated by this section, the county board of education may, with the prior written approval of the State Board of School Finance, created by section three, article nine-b, chapter eighteen of the code, as amended, lay such rates of levy or portion thereof not so required, for the general current expenses of schools: Provided, however, That if the rates of levy under paragraph (3) of this section are not sufficient for the purposes for which they are allocated, the county board of education may, with the prior written approval of the State Tax Commissioner, lay such additional rates of levy, or portion thereof, as are surrendered by the county court commission under paragraph (3), section six-b of this article: Provided, further however, That a county board of education shall be required to levy outside the levy rates herein above provided sufficient to pay the principal and interest requirements on bonds now or hereafter issued by any school district not exceeding in the aggregate five per centum of the assessed value of all taxable property in the county school district, to be ascertained by the last assessment for State and county taxes, previous to the incurring of such indebtedness, in the manner provided by the "Better Schools Amendment", as ratified.
The foregoing notwithstanding, effective on the first day of January of the year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, county boards of education shall not, then or thereafter, have the authority to lay regular levies for general current expenses of the schools as otherwise provided in subdivision (2) of this section and in the unnumbered paragraph that follows.
§11-8-6d. Maximum levies on each classification by municipalities; order of levy.

The governing body of a municipality is hereby authorized to lay not in excess of the following maximum levies, for the purposes specified, and in the following order:
(1) For the payment of: (a) Principal and interest upon bonded indebtedness incurred prior to the adoption of the Tax Limitation Amendment; and to the extent not so required; (b) other legally incurred contractual indebtedness, not bonded, if any, incurred prior to the adoption of the Tax Limitation Amendment, as follows: On Class I property, one and five tenths cents; on Class II property, three cents; and on Class IV property, six cents.
(2) For general current expense purposes, as follows: On Class I property, eleven cents; on Class II property, twenty-two cents; and on Class IV property, forty-four cents. The foregoing notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the maximum rates of levy that municipalities may lay for general current expenses shall then and thereafter be as follows: On Class II-B property, thirty-eight and seventy-seven hundredths cents; and on Class IV property, seventy-seven and fifty-four hundredths cents.
§11-8-6e. Effect on regular levy rate when appraisal results in tax increase; public hearings.

(a) Notwithstanding any other provision of law, where any annual appraisal, triennial appraisal or general valuation of property would produce an assessment that would cause an increase of one percent or more in the total projected property tax revenues that would be realized were the then current regular levy rates by the county commission and the municipalities to be imposed, the rate of levy shall be reduced proportionately as between the county commission and the municipalities and for all classes of property for the forthcoming tax year so as to cause such rate of levy to produce no more than one hundred one percent of the previous year's projected property tax revenues from extending the county commission and municipality levy rates, unless there has been compliance with subsection (c) of this section.
An additional appraisal or valuation due to new construction or improvements to existing real property, including beginning recovery of natural resources, and newly acquired personal property shall not be an annual appraisal or general valuation within the meaning of this section, nor shall the assessed value of such improvements be included in calculating the new tax levy for purposes of this section. Special levies shall not be included in the reduced levy calculation set forth in subsection (b) of this section.
(b) The reduced rates of levy shall be calculated in the following manner:
(1) The total assessed value of each class of property as it is defined by section five, article eight of this chapter for the assessment period just concluded shall be reduced by deducting the total assessed value of newly created properties not assessed in the previous year's tax book for each class of property;
(2) The resulting net assessed value of by Class I property shall be multiplied by .01; the value of Class II property by .02; and the values of Class III and IV, each by .04;
(3) Total the current year's property tax revenue resulting from regular levies for each county commission and municipality and multiply the resulting sum by one hundred one percent: Provided, That the one hundred one percent figure shall be increased by the amount the county's or municipality's increased levy provided for in subsection (b), section eight, article one-c of this chapter;
(4) Divide the total regular levy tax revenues, thus increased in subdivision (3), above, by the total weighted net assessed value as calculated in paragraph two subdivision (2) of this section and multiply the resulting product by one hundred; the resulting number is the Class I regular levy rate , Stated as cents-per-one hundred dollars of assessed value;
(5) The Class II rate is two times the Class I rate; Classes III and IV, four times the Class I rate as calculated in the preceding subdivision.
The foregoing notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, subdivision (2) of this subsection shall, then and thereafter, provide that Class I property shall not be included but that the net assessed value of Class II-A property and Class II-B property determined under subdivision (1) shall be multiplied by .02; and the values of Class III and IV, each by .04; and subdivision (4) of this subsection shall, then and thereafter, provide that the resulting number is the Class II-A and Class II-B regular levy rate, Stated as cents-per-hundred dollars of assessed value, instead of that the Class I regular levy rate; and subdivision (5) shall then and thereafter provide that the Class III and IV rates are two times the Class II-A and Class II-B rates calculated in subdivision (4), instead of that the Class II rate is two times the Class I rate or that the Classes III and IV rates are four times the Class I rate.
(c) The governing body of a county or municipality may, after conducting a public hearing, which may be held at the same time and place as the annual budget hearing, increase the rate above the reduced rate required in this section if any such increase is deemed to be necessary by such governing body: Provided, That in no event shall the governing body of a county or municipality increase the rate above the reduced rate required by subsection (b) of this section for any single year in a manner which would cause total property tax revenues accruing to the governing body of the county or municipality, excepting additional revenue attributable to assessed valuations of newly created properties not assessed in the previous year's tax book for each class of property, to exceed by more than ten percent those property tax revenues received by the governing body of the county or municipality for the next preceding year: Provided, however, That this provision shall not restrict the ability of a county or municipality to enact excess levies as authorized under existing statutory or Constitutional provisions.
Notice of the public hearing and the meeting in which the levy rate shall be on the agenda shall be given at least seven days before the date for each public hearing by the publication of a notice in at least one newspaper of general circulation in such county or municipality: Provided, That a Class IV town or village as defined in section two, article one, chapter eight of this code, in lieu of the publication notice required by this subsection, may post no less than four notices of each public hearing, which posted notices shall contain the information required by the publication notice and which shall be in available, visible locations including the town hall. The notice shall be at least the size of one-eighth page of a standard size newspaper or one-fourth page of a tabloid size newspaper, and the headline in the advertisement shall be in a type no smaller than twenty-four point. The publication notice shall be placed outside that portion, if any, of the newspaper reserved for legal notices and classified advertisements and shall also be published as a Class II-0 legal advertisement in accordance with the provisions of article three, chapter fifty-nine of this code. The publication area is the county. The notice shall be in the following form and contain the following information, in addition to such other information as the local governing body may elect to include:
NOTICE OF PROPOSED TAX INCREASE

The (name of the county or municipality) proposes to increase property tax levies.
1. Appraisal/Assessment Increase: total assessed value of property, excluding additional assessments due to new or improved property, exceeds last year's total assessed value of property by ____________ percent.
2. Lowered Rate Necessary to Offset Increased Assessment: The tax rate which would levy the same amount of property tax as last year, when multiplied by the new total assessed value of property with the exclusions mentioned above, would be $____________ per $100 of assessed value for Class I property, $___________ per $100 of assessed value for Class II property, $___________ per $100 of assessed value for Class III and $___________ per $100 of assessed value for Class IV property. These rates will be known as the "lowered tax rates."
The foregoing notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, this item numbered 2. shall State that the new total assessed value of property would be $ per $100 of assessed value for Class II-A property, $ Per $100 of assessed value for Class II-B property, $ per $100 of assessed value for Class III and $ per $100 of assessed value for Class IV property.
3. Effective Rate Increase: The (name of the county or municipality) proposes to adopt a tax rate of $___________ per $100 of assessed value for Class I property, $________ per $100 of assessed value of Class II property, $______________ per $100 of assessed value of Class III property and $_________ per $100 of assessed value of Class IV property. The difference between the lowered tax rates and the proposed tax rates would be $___________ per $100, or ______ percent for Class I; $________ or ________ percent for Class II; $_________ or ________ percent for Class III; and $_________ or _______ percent for Class IV. These differences will be known as the "effective tax rate increases."
The foregoing notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, this item numbered (3) shall State that the county or municipality proposes to adopt a tax rate of per $100 of assessed value for Class II-A property, $ Per $100 of assessed value for Class II-B property, $ per $100 of assessed value for Class III property and $ per $100 of assessed value for Class IV property; and that the difference between the lowered tax rates and the proposed rates would be $ per $100, or percent for Class II-A; $ Per $100, or percent for Class II-B; $ per $100, or percent for Class III; and $ per $100, or percent for Class IV.
Individual property taxes may, however, increase at a percentage greater than or less than the above percentage.
4. Revenue produced last year: $___________.
5. Revenue projected under the effective rate increases: $________.
6. Revenue projected from new property or improvements: $_________.
7. General areas in which new revenue is to be allocated: __________.
A public hearing on the increases will be held on (date and time) at (meeting place). A decision regarding the rate increase will be made on (date and time) at (meeting place).
(d) All hearings are open to the public. The governing body shall permit persons desiring to be heard an opportunity to present oral testimony within such reasonable time limits as are determined by the governing body.
(e) This section shall be effective as to any regular levy rate imposed by the county commission or a municipality for taxes due and payable on or after the first day of July, one thousand nine hundred ninety-one. If any provision of this section is held invalid, such invalidity shall not affect other provisions or applications of this section which can be given effect without the invalid provision or its application and to this end the provisions of this section are declared to be severable.
§11-8-6f. Effect on regular school board levy rate when appraisal results in tax increase; creation and implementation of growth county school facilities act; creation of growth county school facilities act fund.

(a) Notwithstanding any other provision of law, where any annual appraisal, triennial appraisal or general valuation of property would produce a Statewide aggregate assessment that would cause an increase of one percent or more in the total property tax revenues that would be realized were the then current regular levy rates of the county boards of education to be imposed, the rate of levy for county boards of education shall be reduced uniformly Statewide and proportionately for all classes of property for the forthcoming tax year so as to cause the rate of levy to produce no more than one hundred one percent of the previous year's projected Statewide aggregate property tax revenues from extending the county board of education levy rate, unless subsection (b) of this section is complied with. The reduced rates of levy shall be calculated in the following manner: (1) The total assessed value of each class of property as it is defined by section five, article eight of this chapter for the assessment period just concluded shall be reduced by deducting the total assessed value of newly created properties not assessed in the previous year's tax book for each class of property; (2) the resulting net assessed value of Class I property shall be multiplied by .01; the value of Class II by .02; and the values of Class III and IV, each by .04; (3) total the current year's property tax revenue resulting from regular levies for the boards of education throughout this State and multiply the resulting sum by one hundred one percent: Provided, That the one hundred one percent figure shall be increased by the amount the boards of educations' increased levy provided for in subsection (b), section eight, article one-c of this chapter; (4) divide the total regular levy tax revenues, thus increased in subdivision (3), of this subsection, by the total weighted net assessed value as calculated in subdivision (2) of this subsection and multiply the resulting product by one hundred; the resulting number is the Class I regular levy rate, Stated as cents-per-one hundred dollars of assessed value; and (5) the Class II rate is two times the Class I rate; Classes III and IV, four times the Class I rate as calculated in the preceding subdivision.
An additional appraisal or valuation due to new construction or improvements, including beginning recovery of natural resources, to existing real property or newly acquired personal property shall not be an annual appraisal or general valuation within the meaning of this section, nor shall the assessed value of the improvements be included in calculating the new tax levy for purposes of this section. Special levies shall not be included in any calculations under this section.
(b) After conducting a public hearing, the Legislature may, by act, increase the rate above the reduced rate required in subsection (a) of this section if an increase is determined to be necessary.
(c) Growth county school facilities act. -- Legislative findings. --
The Legislature finds and declares that there has been, overall, a Statewide decline in enrollment in the public schools of this State; due to this decline, most public schools have ample space for students, teachers and administrators; however, some counties of this State have experienced significant increases in enrollment due to significant growth in those counties; that those counties experiencing significant increases do not have adequate facilities to accommodate students, teachers and administrators. Therefore, the Legislature finds that county commissions in those high-growth counties should have the authority to designate revenues generated from the application of the regular school board levy due to new construction or improvements placed in a growth county school facilities act fund be used for school facilities in those counties to promote the best interests of this State's students.
(1) For the purposes of this subsection, "growth county" means any county that has experienced an increase in second month net enrollment, excluding kindergarten students less than five years of age without an individualized education program, of fifty or more during any three of the last five years, as determined by the Department of Education.
(2) The provisions of this subsection shall only apply to any growth county, as defined in subdivision (1) of this subsection, that, by resolution of its county board of education, chooses to use the provisions of this subsection.
(3) For any growth county, as defined in subdivision (1) of this subsection, that adopts a resolution choosing to use the provisions of this subsection, pursuant to subdivision (2) of this subsection, assessed values resulting from additional appraisal or valuation due to new construction or improvements, including beginning recovery of natural resources, to existing real property or newly acquired personal property, shall be designated as new property values and identified by the county assessor. The Statewide regular school board levy rate as established by the Legislature shall be applied to the assessed value designated as new property values and the resulting property tax revenues collected from application of the regular school board levy rate shall be placed in a separate account, designated as the growth counties school facilities act fund. Revenues deposited in the growth counties school facilities act fund shall be appropriated by the county board of education for construction, maintenance or repair of school facilities. Revenues in the fund may be carried over for an indefinite length of time and may be used as matching funds for the purpose of obtaining funds from the school building authority or for the payment of bonded indebtedness incurred for school facilities. Estimated school board revenues generated from application of the regular school board levy rate to new property values are not to be considered as local funds for purposes of the computation of local share under the provisions of section eleven, article nine-a, chapter eighteen of this code.
(d) This section, as amended during the legislative session in the year two thousand four, shall be effective as to any regular levy rate imposed for the county boards of education for taxes due and payable on or after the first day of July, two thousand four. If any provision of this section is held invalid, the invalidity shall not affect other provisions or applications of this section which can be given effect without the invalid provision or its application and to this end the provisions of this section are declared to be severable.
(e) This section shall not apply to or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State providing that the regular levy rate of the county boards of education shall be zero.
§11-8-12. Levy estimate by board of education; certification and publication.

(a) Each board of education shall, at the session provided for in section nine of this article, if the laying of a levy has been authorized by the voters of the district under article nine of the code, ascertain the condition of the fiscal affairs of the district, and make a Statement setting forth:
(1) The amount due, and the amount that will become due and collectible during the current fiscal year except from the levy of taxes to be made for the year;
(2) The interest, sinking fund and amortization requirements for the fiscal year of bonded indebtedness legally incurred upon a vote of the people, as provided by law, by any school district existing prior to May the twenty-second day of May, one thousand nine hundred thirty-three, prior to the adoption of the tax Limitation Amendment;
(3) Other contractual indebtedness not bonded, legally incurred by any such school district existing prior to May the twenty-second day of May, one thousand nine hundred thirty-three, prior to the adoption of the Tax Limitation Amendment, owing by such district;
(4) The amount to be levied for the permanent improvement fund;
(5) The total of all other expenditures to be paid out of the receipts for the current fiscal year, with proper allowance for delinquent taxes, exonerations and contingencies;
(6) The amount of such total to be raised by the levy of taxes for the current fiscal year;
(7) The proposed rate of levy in cents on each one hundred dollars' assessed valuation of each class of property;
(8) The separate and aggregate amounts of the assessed valuation of real, personal, and public utility property within each class.
The Secretary of the Board shall forward immediately a certified copy of the statement to the Tax Commissioner and shall publish the statement forthwith. The session shall then stand adjourned until the third Tuesday in April, at which time it shall reconvene.
(b) This section shall not apply to or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State providing that the regular levy rate of the county boards of education shall be zero.
§11-8-12a. Adjourned session of board of education to hear objections to proposed levies; approval of estimate and levy by Tax Commissioner; first levy for bonded and other indebtedness and indebtedness not bonded, second for permanent improvement fund, then for current expenses.

(a) Each board of education when it reconvenes on the third Tuesday in April shall proceed in a manner similar in all respects to that provided for in section ten-a of this article. The board shall not finally enter any levy until it has been approved in writing by the Tax Commissioner. After receiving the approval, the board shall enter the Statement as approved in its record of proceedings, together with the written approval: Provided, That for the fiscal year one thousand nine hundred ninety-three only, each board of education may delay its final entry of the levy until no later than the first Thursday in May, by which time each board shall have entered the Statement as approved in its record of proceedings, together with the written approval: Provided, however, That any delay by a county board of education in the entry of its final levy pursuant to the provisions of this section in the fiscal year one thousand nine hundred ninety-three and any action taken prior to the effective date of this section that is not inconsistent with the provisions of this section or other applicable levy rate sections of this code are hereby ratified and confirmed as having full force and effect.
The board shall levy as many cents per hundred dollars' assessed valuation on each class of property in the county or in the area of a preexisting school district, as the case may be, as will produce the amounts, according to the last assessment, shown to be necessary by the Statement in the following order:
First, for the bonded debt and for the contractual debt not bonded, if any, of any school district of the county existing prior to the twenty-second day of May, one thousand nine hundred thirty-three, and incurred prior to the adoption of the Tax Limitation Amendment;
Second, for the permanent improvement fund;
Third, for general current expenses.
The rates of levy for each purpose shall not exceed the amounts fixed by section six-c unless another rate is authorized by the Tax Commissioner or set by the Legislature in accordance with this article. When less than the maximum levies are imposed, the levies on each class of property shall be in the same proportions as the maximums authorized.
(b) This section shall not apply to or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State providing that the regular levy rate of the county boards of education shall be zero.
§11-8-13. Certification of levy order to Tax Commissioner and county superintendent; reports by superintendent of levies; extension and collection of levies.

(a) Within three days after the Board of Education has laid the levies, the Secretary of the Board shall forward to the county superintendent and to the Tax Commissioner certified copies of the orders laying levies and the rate of levy upon each class. Within three days thereafter the county superintendent shall report the rate of levy for each of the various classes and the total value of real, personal, and public utility property in each class in every district to the clerk of the county court commission, the assessor, the State Superintendent and the Auditor. The proper county officers shall then extend on the property books the amount of taxes levied. The sheriff shall collect and account for the taxes as required by law.
(b) This section shall not apply to or be in effect for any year subsequent to the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State providing that the regular levy rate of the county boards of education shall be zero.
§11-8-16. What order for election to increase levies to show; vote required; amount and continuation of additional levy; issuance of bonds.

(a) A local levying body may provide for an election to increase the levies, by entering on its record of proceedings an order setting forth:
(1) The purpose for which additional funds are needed;
(2) The amount for each purpose;
(3) The total amount needed;
(4) The separate and aggregate assessed valuation of each class of taxable property within its jurisdiction;
(5) The proposed additional rate of levy in cents on each class of property;
(6) The proposed number of years, not to exceed three, to which the additional levy applies, except that in the case of county boards of education the proposed number of years shall not exceed five;
(7) The fact that the local levying body will or will not issue bonds, as provided by this section, upon approval of the proposed increased levy.
(b) The local levying body shall submit to the voters within their political subdivision, the question of the additional levy at either a general or special election. If at least sixty percent of the voters cast their ballots in favor of the additional levy, the county commission or municipality may impose the additional levy. If at least a majority of voters cast their ballot in favor of the additional levy, the county board of education may impose the additional levy: Provided,
That any additional levy adopted by the voters, including any additional levy adopted prior to the effective date of this section, shall be the actual number of cents per each one hundred dollars of value set forth in the ballot provision, which number shall not exceed the maximum amounts prescribed in this section, regardless of the rate of regular levy then or currently in effect, unless such rate of additional special levy is reduced in accordance with the provisions of section six-g of this article or otherwise changed in accordance with the applicable ballot provisions. For county commissions, this levy shall not exceed a rate greater than seven and fifteen hundredths cents for each one hundred dollars of value for Class I properties, and for Class II properties a rate greater than twice the rate for Class I properties, and for Class III and IV properties a rate greater than twice the rate for Class II properties. The foregoing sentence notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the maximum additional levy approved by the voters and laid by county commissions shall not exceed a rate greater than fifty percent of the regular levy rates provided in section six-b. For municipalities, this levy shall not exceed a rate greater than six and twenty-five hundredths cents for each one hundred dollars of value for Class I properties, and for Class II properties a rate greater than twice the rate for Class I properties, and for Class III and IV properties a rate greater than twice the rate for Class II properties. The foregoing sentence notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the maximum additional levy approved by the voters and laid by municipalities shall not exceed a rate greater than fifty percent of the regular levy rate provided in section six-d. For county boards of education, this levy shall not exceed a rate greater than twenty-two and ninety-five hundredths cents for each one hundred dollars of value for Class I properties, and for Class II properties a rate greater than twice the rate for Class I properties, and for Class III and IV properties a rate greater than twice the rate for Class II properties. The foregoing sentence notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the maximum additional levy approved by the voters and laid by the county boards of education shall not exceed a rate greater than forty-five and ninety hundredths cents for each one hundred dollars of value for Class II-A and II-B properties, and for Class III and IV properties a rate greater than twice the rate for Class II-A and II-B properties.
Levies authorized by this section shall not continue for more than three years in the case of county commissions and municipalities and five years in the case of county boards of education without resubmission to the voters.
Upon approval of an increased levy as provided by this section, a local levying body may immediately issue bonds in an amount not exceeding the amount of the increased levy plus the total interest thereon, but the term of the bonds shall not extend beyond the period of the increased levy.
Insofar as they might concern the issuance of bonds as provided for in this section, the provisions of sections three and four, article one, chapter thirteen of this code shall not apply: Provided, That nothing contained in this section shall conflict with the provisions of Article X, Section 8 of the Constitution of West Virginia.
§11-8-17. Special levy elections; notices; election officers; conduct of election; supplies; canvass of returns; form of ballot.

The local levying body shall publish a notice, calling the election, as a Class II-O legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code, and the publication area for such publication shall be the territory in which the election is held. Such notice shall be so published within fourteen consecutive days next preceding the election. All the provisions of the law concerning general elections shall apply so far as they are practicable, except as follows: Where a special election is held, the local levying body, having due regard to the minimum expense involved, shall determine the number of election officials necessary to properly conduct said election, which number shall in no case be less than three Commissioners and two clerks, and shall appoint the same and fix and pay their compensation, but otherwise the election officials shall be such as are appointed to serve with respect to the general election held at the same time. The local levying body, however, shall provide the election supplies necessary for such election and shall canvass the returns thereof. A separate ballot shall be used at a levy election held in connection with any other election. The ballot shall be entitled:"Special election to authorize additional levies for the year(s) ____________ and for the purpose of _____________ according to the order of the __________________ entered on the ______ day of ________________."
The additional levy shall be on Class I property __________ cents; on Class II property ______________ cents; on Class III property (if any) ______________ cents; on Class IV property (if any) _____________ cents.
The foregoing sentence notwithstanding, commencing on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, the notice shall provide that the additional levy shall be on Class II-A property (if any) _______ cents; on Class II-B property (if any) ................... cents; on Class III property (if any) ______ cents; on Class IV property (if any) ______ cents.
§11-8-23a. Statement of fiscal body when levies not sufficient to meet requirements of existing contractual indebtedness due to adoption of "Fair Taxation Amendment."

(a) When the entire apportionment of levies for the payment of such contractual indebtedness existing at the time of the adoption of the "Fair Taxation Amendment," together with the application to such indebtedness of such part, if any, of the levies allocated for current expenses and not required therefor and applied to such indebtedness as herein above provided, are not sufficient to meet the current requirements of principal and/or interest upon legally existing contractual indebtedness, existing at the time of the adoption of the "Fair Taxation Amendment" and remaining unpaid, then the levying body shall prepare a Statement showing in detail:
(1) The items of expenditure upon which the estimate of current expense is based;
(2) A detailed itemized Statement of:
(A) The bonded indebtedness, if any there be, existing prior to the adoption of the "Fair Taxation Amendment," in whole or in part, not provided by the levies hereinbefore authorized; and
(B) Other contractual indebtedness, not bonded, if any there be, legally incurred prior to the adoption of the "Fair Taxation Amendment," in whole or in part, not provided by the levies hereinbefore authorized;
(3) The requirements of such bonded indebtedness not provided by the levies hereinbefore authorized;
(4) The requirements of such other contractual indebtedness, not bonded, not provided by the levies hereinbefore authorized;
(5) The separate and aggregate amounts of the real, personal, and public utility properties in each class subject to taxation within the taxing district; and
(6) The rates of levy in cents on each one hundred dollars assessed valuation of each class of property necessary to produce the amount required: (a) For such bonded indebtedness; and (b) for such other contractual indebtedness not bonded, and not provided by the levies hereinbefore authorized, and which rates of levies shall be in the proportion of one cent on Class II-A and II-B property, and two cents on Classes III and/or IV property.
(b) The recording officer of the fiscal body shall forthwith forward a certified copy of this statement to the State Tax Commissioner in the same manner and at the same time as required in sections eleven, thirteen and fifteen of this article for the regular levies imposed by the levying body, and notice of this proposed levy shall be published at the same time and in the same manner as required for other levies proposed by the fiscal body. The Tax Commissioner, upon receipt of such estimate, shall proceed to carefully examine and analyze the estimate for current expense and determine what items, if any, may be reduced or eliminated therefrom. If the Tax Commissioner finds that any of such items, in whole or in part, may be eliminated or reduced without impairing the governmental functions of such fiscal body, he or she shall require such fiscal body to so eliminate or reduce such estimate until such estimate shall constitute only so much as may in the opinion of the Tax Commissioner be indispensable to the orderly discharge of the governmental functions of such fiscal body; and such proportion of the levies for current expense as are represented by such reductions may be applied by said fiscal body to the increase of the levies of such fiscal body for contractual indebtedness. The Tax Commissioner shall also carefully examine the itemized list of contractual obligations for the payment of which the levy under this section is proposed to be made, and shall ascertain whether such obligations are in fact contractual; whether the same were created prior to the adoption of the "Fair Taxation Amendment," and whether or not, except for the levy proposed under this section, the obligation thereof will be impaired. The Tax Commissioner shall make a statement of his or her findings in writing, and if such findings of the Tax Commissioner show that the levies for current expense of such fiscal body are no more than are indispensable to the orderly discharge of the governmental functions of such fiscal body, and that except for the levies proposed to be laid under this section, the obligation of valid contracts incurred prior to the adoption of the "Fair Taxation Amendment" will be impaired, the fiscal body may then with the approval of the Tax Commissioner lay such a levy on the several classes of property in proportion to one cent on Class I property, two cents on Class II property, and four cents on Classes III and/or IV properties, which, together with the other levies provided in this article, shall not exceed any Constitutional limitations applicable thereto in effect immediately prior to the time of the adoption of the "Tax Limitation Amendment," at the same time and in the same manner as other levies in this article provided for, and the proceeds thereof when collected, together with the other levies for such contractual indebtedness herein provided for, shall be held and kept separate and apart from all other funds of said fiscal body and shall be used solely for the purpose of paying such indebtedness.
§11-8-24. Petition for review of findings of Tax Commissioner and levy order; notice of intention to file; intervention; hearing and findings; appeal to Supreme Court of Appeals; refund if liens found excessive; recovery by action.

(a) Any taxpayer or other person legally interested in the levy provided for by section twenty-three or section twenty-three-a hereof, if aggrieved by the findings of the Tax Commissioner and his or her approval of such levy, and by the laying of such levy by the fiscal body, may have a review of the findings of the Tax Commissioner and the laying of such levy by the circuit court of the county in which the greater part of such taxpayer's or other person's property affected by such levy is situated, by presenting to such circuit court, either in term or to the judge thereof in vacation, within ten days after the entry of the order laying such levy shall have been made by such fiscal body, his or her petition for such review. Such taxpayer or other person shall give at least five days' notice in writing of his or her intention to file such petition to the Tax Commissioner, to the prosecuting attorney of the county of the circuit court of the county in which said petition will be presented, and to the presiding officer of the fiscal body laying the levy. Any other person legally interested in the laying or in the disaffirmance of the laying of the levy provided for in the preceding section twenty-three or twenty-three-a of this article, may, by petition in writing, intervene in said hearing and be made a party thereto with any and all rights of any other party therein and with any and all rights of any litigant in a chancery cause, insofar as the principles thereof be applicable, including the right of appeal as hereinafter provided for. The circuit court or the judge thereof in vacation shall, insofar as applicable, consider the petition as a bill in equity, and the court or judge shall forthwith, either in term or in vacation, proceed to consider such petition, the estimates and levies, and the findings of the Tax Commissioner, and may hear and consider evidence on behalf of such taxpayer or other person, the fiscal body laying the levy, and any other person interested in the laying of such levy, relating to the necessity and propriety of laying such levies under said section twenty-three or section twenty-three-a, which evidence on the motion of any party appearing therein shall be made a part of the record. Upon such hearing the court or judge may affirm or disaffirm the findings of the Tax Commissioner and the laying of the levy, or may make such modification of such findings and such levies as to the court or judge may appear proper. Whereupon, the levies shall be laid in accordance with the findings of the court or judge as though such findings had been made by the Tax Commissioner, under the provisions of the said section twenty-three or section twenty-three-a of this article as the case may be, hereof. An appeal to the Supreme Court of Appeals of West Virginia from the findings of the circuit court may be had by any party in interest appearing in the hearing, in like manner, so far as applicable, as in an equity cause, by petition for appeal to said the Supreme Court presented to the Supreme Court or to any judge thereof, or filed in the office of the clerk of the Supreme Court within two weeks after the entry of the final order of the circuit court therein. Pending final determination of such judicial review, the levies made under section twenty-three shall be laid and the taxes therefrom collected; and if the final determination be that the levies under section twenty-three or section twenty-three-a be in excess of the amounts required for such indebtedness, such excess shall be refunded by the collecting officer on demand to the person from whom it was collected as hereinafter provided, or if the final finding be that the levies for current expense of such fiscal body be excessive, the excess thereof shall be transferred from the current expense revenues to the revenues of such indebtedness, if required therefor, and, if not required therefor, the collecting officer shall, upon demand, refund any such excess payment to the person from whom it was collected. If the collecting officer fail fails to repay the amount, he or she and his or her sureties shall be jointly and severally liable for the amount and the costs of recovery. Recovery may be had by summons before a justice or on motion, before the circuit court.
(b) Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand five, those amendments shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
ARTICLE 9. CRIMES AND PENALTIES.
§11-9-2. Application of this article.
(a) The provisions of this article apply to the following taxes imposed by this chapter: (1) Inheritance and transfer taxes and estate taxes imposed by article eleven of this chapter; (2) business registration tax imposed by article twelve of this chapter; (3) minimum severance tax on coal imposed by article twelve-b of this chapter; (4) corporate license tax imposed by article twelve-c of this chapter; (5) business and occupation tax imposed by article thirteen of this chapter; (6) severance tax imposed by article thirteen-a of this chapter; (7) telecommunications tax imposed by article thirteen-b of this chapter; (8) gasoline and special fuels excise tax imposed by article fourteen of this chapter; (9) motor fuels excise tax imposed by article fourteen-c of this chapter; (10) motor carrier road tax imposed by article fourteen-a of this chapter; (11) interstate fuel tax agreement authorized by article fourteen-b of this chapter; (12) consumers sales and service tax imposed by article fifteen of this chapter; (13) use tax imposed by article fifteen-a of this chapter; (14) tobacco products excise tax imposed by article seventeen of this chapter; (15) soft drinks tax imposed by article nineteen of this chapter; (16) personal income tax imposed by article twenty-one of this chapter; (17) business franchise tax imposed by article twenty-three of this chapter; (18) corporation net income tax imposed by article twenty-four of this chapter; and (19) health care provider tax imposed by article twenty-seven of this chapter; (20) the general excise tax imposed by article fifteen-c of this chapter; (21) the progressive income tax imposed by article twenty-one-a of this chapter; and (22) the business activities and profits tax imposed by article twenty-eight of this chapter.
(b) The provisions of this article also apply to the West Virginia tax procedure and administration act in article ten of this chapter and to any other articles of this chapter when application is expressly provided for by the Legislature.
(c) The provisions of this article also apply to municipal sales and use taxes imposed pursuant to article thirteen-c, chapter eight of this code; the charitable bingo fee imposed by sections six and six-a, article twenty, chapter forty-seven of this code; the charitable raffle fee imposed by section seven, article twenty-one of said chapter; and the charitable raffle boards and games fees imposed by section three, article twenty-three of said chapter.
(d) Each and every provision of this article applies to the articles of this chapter listed in subsections (a), (b) and (c) of this section, with like effect, as if the provisions of this article were applicable only to the tax and were set forth in extenso in this article.
(e) Notwithstanding the date of enactment of the act of the Legislature enacting amendments to this section in the year two thousand five, such amendments shall not be operative or in force and effect until the first day of January of the first year following the year in which the voters ratify the fair taxation amendment to the Constitution of this State.
ARTICLE 10. PROCEDURE AND ADMINISTRATION.
§11-10-3. Application of this article.

(a) The provisions of this article apply to inheritance and transfer taxes, estate tax and interstate compromise and arbitration of inheritance and death taxes, business registration tax, annual tax on incomes of certain carriers, minimum severance tax on coal, corporate license tax, business and occupation tax, severance tax, telecommunications tax, interstate fuel tax, consumers sales and service tax, use tax, tobacco products excise tax, soft drinks tax, personal income tax, business franchise tax, corporation net income tax, gasoline and special fuels excise tax, motor fuels excise tax, motor carrier road tax, health care provider tax and tax relief for elderly homeowners and renters administered by the State Tax Commissioner and, commencing on the first day of January of the first year following the year in which the voters ratify the fair Taxation amendment to the Constitution of this State, the general excise tax, the progressive income tax, and the business activities and profits tax. This article shall not apply to ad valorem taxes on real and personal property or any other tax not listed in this section, except that in the case of ad valorem taxes on real and personal property, when any return, claim, statement or other document is required to be filed, or any payment is required to be made within a prescribed period or before a prescribed date, and the applicable law requires delivery to the office of the sheriff of a county of this State, the methods prescribed in section five-f of this article for timely filing and payment to the Tax Commissioner or State Tax Department are the same methods utilized for timely filing and payment with the sheriff.
(b) The provisions of this article apply to beer barrel tax levied by article sixteen of this chapter and to wine liter tax levied by section four, article eight, chapter sixty of this code.
(c) The provisions of this article apply to any other article of this chapter when the application is expressly provided for by the Legislature.
(d) The provisions of this article apply to municipal sales and use taxes imposed under article thirteen-c, chapter eight of this code and collected by the Tax Commissioner.
§11-10-11b. Administration of add-on general excise tax and add-on progressive income tax; commission authorized.

(a) Any county or municipality which, pursuant to article five-b, chapter seven of this code, or article thirteen-c, chapter eight of this code, imposes an add-on general excise tax, or an add-on progressive income tax, shall, by express provision in the order or ordinance imposing that tax, authorize the State Tax Commissioner to administer, assess, collect and enforce that tax on behalf of it and as its agent. The commission or municipality shall make such authorization by the inclusion of a provision in the order or ordinance stating its purpose and referring to this section, and providing that such order or ordinance shall be effective on the first day of a month at least sixty days after its entry or adoption, as the case may be. A certified copy of such order or ordinance shall be forwarded to the Tax Commissioner so that it will be received within five days after its entry or adoption.
(b) Any add-on general excise tax administered under this section shall be administered and collected by the Tax Commissioner in the same manner and subject to the same penalties as provided for the tax imposed in article fifteen-c of this chapter. Any add-on progressive income tax administered under this section shall be administered and collected by the Tax Commissioner in the same manner and subject to the same penalties as provided for the tax imposed in article twenty-one-a of this chapter.
(c) All add-on general excise tax moneys and all add-on progressive income tax moneys collected by the Tax Commissioner under this section shall be paid into the State Treasury to the credit of each county's or municipality's subaccount in a Local Government Add-on Tax Revenue Fund to be established by the State Treasurer. Such add-on general excise tax moneys and add-on progressive income tax moneys shall be credited to the subaccount of each particular county or municipality levying the tax being administered under this section. The credit for add-on general excise tax moneys shall be made to the subaccount of the county or municipality in which the taxable sales were made and services rendered as shown by the records of the Tax Commissioner and certified by him or her monthly to the State Treasurer, namely, the location of each place of business of every vendor collecting and paying the tax to the Tax Commissioner without regard to the place of possible use by the purchaser. The credit for add-on progressive income tax shall be made to the subaccount of the county or municipality in which the taxpayer reporting the taxable income resides as shown by the records of the Tax Commissioner and certified by him or her monthly to the State Treasurer.
(d) As soon as practicable after the add-on general excise tax moneys and add-on progressive income tax moneys have been paid into the State Treasury in any month for the preceding month, the commission of a county or the council of a municipality may issue a requisition on the State Treasurer requesting issuance of a State warrant for the proper amount in favor of such county or municipality entitled to the monthly remittance of its add-on general excise tax moneys or of its add-on progressive income tax moneys, or of both as the case may be, and such remittances shall be made by the Treasurer and shall be charged to the subaccount of each such county or municipality. If errors are made in any such payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers, or to some other fact, the errors shall be corrected and adjustments made in the payments for the next six months as follows: One-sixth of the total adjustment shall be included in the payments for each of the next six months. In addition, the payment shall include a refund of amounts erroneously not paid to the county or municipality and not previously remitted during the three years preceding the discovery of the error. A correction and adjustment in payments described in this subsection shall be made, if at all, within three years of the date of the payment error.
(e) The foregoing notwithstanding, the Tax Commissioner shall deduct, and retain for the benefit of his or her office, from each payment into the State Treasury as provided in subsection (c) of this section, one percent thereof as a commission to compensate his or her office for the discharge of the duties described in this section.
ARTICLE 12. BUSINESS REGISTRATION TAX.
§11-12-1. Short title.
This article shall be cited as the "Business Registration Tax Act."
§11-12-26. Interpretation of preceding sections.
(a) None of the provisions of the preceding sections in this article shall affect any of the sections of this article dealing with the corporation land holding tax or the corporation license tax; and none of the sections of this article dealing with such taxes tax shall affect any of the sections of this article dealing with the business registration tax certificates.
(b) Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand five, those amendments shall not become operative and shall have no force and effect until the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
§11-12-75. Tax on corporations holding more than one thousand acres of land.

(a) Tax imposed. -- Every corporation, and controlled group of corporations, including railroad and other corporations, holding more than one thousand acres of land in this State shall pay to the Tax Commissioner annually a tax of fifty cents per acre for the privilege of acquiring and holding of land so acquired and held by it in addition to one thousand acres.
(b) Legislative rules. -- The Tax Commissioner shall propose for promulgation pursuant to the provisions of article three, chapter twenty-nine of this code such legislative rules as may be necessary to carry out the purpose of this section, including, but not limited to, rules relating to definitions of terms and the attribution of ownership among members of a controlled group at corporations.
(c) Credit for severance tax paid. -- In a tax year, there shall be allowed as a credit against the tax imposed by this section, an amount equal to the amount of tax paid, by the taxpayer in the tax year for tax imposed under article thirteen-a of this chapter: Provided, That the credit allowed by this subsection shall not exceed the amount of tax imposed on the taxpayer in the tax year without regard to such credit.
(d) Effective date of amendments. -- Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand five, those amendments shall not become operative and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
ARTICLE 13. BUSINESS AND OCCUPATION TAX.
§11-13-2e. Business of gas storage; phase-out; effective date.

(a) Rate of tax. -- Upon every person engaging or continuing within this State in any gas storage business utilizing one or more gas storage reservoirs located within this State, the tax imposed by section two of this article shall be equal to five cents multiplied by the sum of either: (1) The net number of dekatherms of gas injected into such a gas storage reservoir during a tax month; or (2) the net number of dekatherms of gas withdrawn from such a gas storage reservoir during a tax month, whichever is applicable for that month, whether or not such gas is owned by, or is injected or withdrawn for, the storage operator or any other person. Fractional parts of dekatherms shall be included in the measure of tax as provided in regulations rules promulgated by the Tax Commissioner: Provided, That effective the first day of July, one thousand nine hundred ninety-five, the net number of dekatherms of gas injected or the net number of dekatherms withdrawn shall not exceed the storage utilization index as defined in this subsection. For purposes of this section, the term "storage utilization index" means the utilization of storage reservoir, through the operation of existing and functional facilities available for storage use during the five-year base period ending the thirty-first day of December, one thousand nine hundred ninety-four, and the storage utilization index shall be the five-year average of taxable dekatherms as determined for each taxable period of the Stated base period.
(b) Effective date. -- The measure of tax under this section shall include gas injected into, or withdrawn from, a gas storage reservoir after the twenty-eighth day of February, one thousand nine hundred eighty-nine.
(c) Administration; installment payments. -- The tax due under this section shall be administered, collected and enforced as provided in this article and articles nine and ten of this chapter. The tax due under this section shall be remitted in periodic installments as provided in section four of this article, except that such periodic installment payments shall be remitted on or before the twentieth day of the month following the month or quarter in which the tax accrues.
(d) Notice of retirement from service. -- A taxpayer subject to the tax due under this section shall provide written notice to the Joint Committee on Government and Finance and the Department of Tax and Revenue eighteen months prior to the retirement from service of a storage reservoir.
(e) Phase-out of tax. -- Notwithstanding any provision of this code to the contrary, beginning in the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State phasing out the tax described in this section, the rate of the tax shall be five cents multiplied as described in subsection (a) of this section; and in the second year, three and three quarters cents; and in the third year, two and one-half cents; and in the fourth year one and one-quarter cents and in the fifth year and thereafter zero cents.
(f) Effective date of phase-out. -- Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand five, these amendments shall not become operational and shall have no force and effect until the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
§11-13-2o. Business of generating or producing or selling electricity on and after the first day of June, one thousand nine hundred ninety-five; definitions; rate of tax; exemptions; effective date.

(a) Definitions. -- As used in this section:
(1) "Average four-year generation" is computed by dividing by four the sum of a generating unit's net generation, expressed in kilowatt hours, for calendar years one thousand nine hundred ninety-one, one thousand nine hundred ninety-two, one thousand nine hundred ninety-three, and one thousand nine hundred ninety-four. For any generating unit which was newly installed and placed into commercial operation after the first day of January, one thousand nine hundred ninety-one and prior to the effective date of this section, "average four-year generation" is computed by dividing the unit's net generation for the period beginning with the month in which the unit was placed into commercial operation and ending with the month preceding the effective date of this section by the number of months in the period and multiplying the resulting amount by twelve with the result being a representative twelve-month average of the unit's net generation while in an operational status.
(2) "Capacity factor" means a fraction, the numerator of which is average four-year generation and the denominator of which is the maximum possible annual generation.
(3) "Generating unit" means a mechanical apparatus or structure which through the operation of its component parts is capable of generating or producing electricity and is regularly used for this purpose.
(4) "Inactive reserve" means the removal of a generating unit from commercial service for a period of not less than twelve consecutive months as a result of lack of need for generation from the generating unit or as a result of the requirements of State or federal law or the removal of a generating unit from commercial service for any period as a result of any physical exigency which is beyond the reasonable control of the taxpayer.
(5) "Maximum possible annual generation" means the product, expressed in kilowatt hours, of official capability times eight thousand seven hundred sixty hours.
(6) "Official capability" means the nameplate capacity rating of a generating unit expressed in kilowatts.
(7) "Peaking unit" means a generating unit designed for the limited purpose of meeting peak demands for electricity or filling emergency electricity requirements.
(8) "Retired from service" means the removal of a generating unit from commercial service for a period of at least twelve consecutive months with the intent that the unit will not thereafter be returned to active service.
(9) "Taxable generating capacity" means the product, expressed in kilowatts, of the capacity factor times the official capability of a generating unit, subject to the modifications set forth in subdivisions (2) and (3), subsection (c) of this section.
(10) "Net generation" for a period means the kilowatt hours of net generation available for sale generated or produced by the generating unit in this State during the period less the following:
(A) Twenty-one twenty-sixths of the kilowatt hours of electricity generated at the generating unit and sold during the period to a plant location of a customer engaged in manufacturing activity if the contract demand at the plant location exceeds two hundred thousand kilowatts per hour in a year or where the usage at the plant location exceeds two hundred thousand kilowatts per hour in a year;
(B) Twenty-one twenty-sixths of the kilowatt hours of electricity produced or generated at the generating unit during the period by any person producing electric power and an alternative form of energy at a facility located in this State substantially from gob or other mine refuse;
(C) The total kilowatt hours of electricity generated at the generating unit exempted from tax during the period by subsection (b), section two-n of this article.
(b) Rate of tax. -- Upon every person engaging or continuing within this State in the business of generating or producing electricity for sale, profit or commercial use, either directly or indirectly through the activity of others, in whole or in part, or in the business of selling electricity to consumers, or in both businesses, the tax imposed by section two of this article shall be equal to:
(1) For taxpayers who generate or produce electricity for sale, profit or commercial use, the product of twenty-two dollars and seventy-eight cents multiplied by the taxable generating capacity of each generating unit in this State owned or leased by the taxpayer, subject to the modifications set forth in subsection (c) of this section: Provided, That with respect to each generating unit in this State which has installed a flue gas desulfurization system, the tax imposed by section two of this article shall, on and after the thirty-first day of January, one thousand nine hundred ninety-six, be equal to the product of twenty dollars and seventy cents multiplied by the taxable generating capacity of the units, subject to the modifications set forth in subsection (c) of this section: Provided, however, That with respect to kilowatt hours sold to or used by a plant location engaged in manufacturing activity in which the contract demand at the plant location exceeds two hundred thousand kilowatts per hour per year or if the usage at the plant location exceeds two hundred thousand kilowatts per hour in a year, in no event shall the tax imposed by this article with respect to the sale or use of the electricity exceed five hundredths of one cent times the kilowatt hours sold to or used by a plant engaged in a manufacturing activity; and
(2) For taxpayers who sell electricity to consumers in this State that is not generated or produced in this State by the taxpayer, nineteen hundredths of one cent times the kilowatt hours of electricity sold to consumers in this State that were not generated or produced in this State by the taxpayer, except that the rate shall be five hundredths of one cent times the kilowatt hours of electricity not generated or produced in this State by the taxpayer which is sold to a plant location in this State of a customer engaged in manufacturing activity if the contract demand at such plant location exceeds two hundred thousand kilowatts per hour per year or if the usage at such plant location exceeds two hundred thousand kilowatts per hour in a year. The measure of tax under this subdivision (2) shall be equal to the total kilowatt hours of electricity sold to consumers in the State during the taxable year, that were not generated or produced in this State by the taxpayer, to be determined by subtracting from the total kilowatt hours of electricity sold to consumers in the State the net kilowatt hours of electricity generated or produced in the State by the taxpayer during the taxable year. For the purposes of this subdivision, net kilowatt hours of electricity generated or produced in this State by the taxpayer includes the taxpayer's pro rata share of electricity generated or produced in this State by a partnership or limited liability company of which the taxpayer is a partner or member. The provisions of this subdivision (2) shall not apply to those kilowatt hours exempt under subsection (b), section two-n of this article. Any person taxable under this subdivision (2) shall be allowed a credit against the amount of tax due under this subdivision (2) for any electric power generation taxes or a tax similar to the tax imposed by subdivision (1) of this subsection (b) paid by the taxpayer with respect to the electric power to the State in which the power was generated or produced. The amount of credit allowed may not exceed the tax liability arising under this subdivision (2) with respect to the sale of the power.
(c) The following provisions are applicable to taxpayers subject to tax under subdivision (1), subsection (b) of this section:
(1) Retired units; inactive reserve. -- If a generating unit is retired from service or placed in inactive reserve, a taxpayer may not be liable for tax computed with respect to the taxable generating capacity of the unit for the period that the unit is inactive or retired. The taxpayer shall provide written notice to the Joint Committee on Government and Finance, as well as to any other entity as may be otherwise provided by law, eighteen months prior to retiring any generating unit from service in this State.
(2) New generating units. -- If a new generating unit, other than a peaking unit, is placed in initial service on or after the effective date of this section, the generating unit's taxable generating capacity shall equal forty percent of the official capability of the unit: Provided, That the taxable generating capacity of a county or municipally-owned generating unit shall equal zero percent of the official capability of the unit and the taxable generating capacity of a generating unit utilizing a turbine powered primarily by wind shall equal five percent of the official capability of the unit.
(3) Peaking units. -- If a peaking unit is placed in initial service on or after the effective date of this section, the generating unit's taxable generating capacity shall equal five percent of the official capability of the unit: Provided, That the taxable generating capacity of a county or municipally-owned generating plant shall equal zero percent of the official capability of the unit.
(4) Transfers of interests in generating units. -- If a taxpayer acquires an interest in a generating unit, the taxpayer shall include the computation of taxable generating capacity of the unit in the determination of the taxpayer's tax liability as of the date of the acquisition. Conversely, if a taxpayer transfers an interest in a generating unit, the taxpayer may not for periods thereafter be liable for tax computed with respect to the taxable generating capacity of the transferred unit.
(5) Proration, allocation. -- The Tax Commissioner shall promulgate rules in conformity with the provisions of article three, chapter twenty-nine-a of this code to provide for the administration of this section and to equitably prorate taxes for a taxable year in which a generating unit is first placed in service, retired or placed in inactive reserve, or in which a taxpayer acquires or transfers an interest in a generating unit, to equitably allocate and reallocate adjustments to net generation, and to equitably allocate taxes among multiple taxpayers with interests in a single generating unit, it being the intent of the Legislature to prohibit multiple taxation of the same taxable generating capacity.
So as to provide for an orderly transition with respect to the rate making effect of this section, those electric light and power companies which, as of the effective date of this section, are permitted by the West Virginia Public Service Commission to utilize deferred accounting for purposes of recovery from ratepayers of any portion of business and occupation tax expense under this article shall be permitted, until the time that action pursuant to a rate application or order of the commission provides for appropriate alternative rate making treatment for such expense, to recover the tax expense imposed by this section by means of deferred accounting to the extent that the tax expense imposed by this section exceeds the level of business and occupation tax under this article currently allowed in rates.
(6) Electricity generated by manufacturer or affiliate for use in manufacturing activity. -- When electricity used in a manufacturing activity is generated in this State by the person who owns the manufacturing facility in which the electricity is used and the electricity generating unit or units producing the electricity so used are owned by the manufacturer, or by a member of the manufacturer's controlled group, as defined in Section 267 of the Internal Revenue Code of 1986, as amended, the generation of the electricity may not be taxable under this article: Provided, That any electricity generated or produced at the generating unit or units which is sold or used for purposes other than in the manufacturing activity shall be taxed under this section and the amount of tax payable shall be adjusted to be equal to an amount which is proportional to the electricity sold for purposes other than the manufacturing activity. The Department of Tax and Revenue shall promulgate rules in accordance with article three, chapter twenty-nine-a of the code: Provided, however, That the rules shall be promulgated as emergency rules.
(d) Beginning the first day of June, one thousand nine hundred ninety-five, electric light and power companies that actually paid tax based on the provisions of subdivision (3), subsection (a), section two-d of this article or section two-m of this article for every taxable month in one thousand nine hundred ninety-four shall determine their liability for payment of tax under this article in accordance with subdivisions (1) and (2) of this subsection. All other electric light and power companies shall determine their liability for payment of tax under this article exclusively under this section beginning the first day of June, one thousand nine hundred ninety-five and thereafter.
(1) If for taxable months beginning on or after the first day of June, one thousand nine hundred ninety-five, liability for tax under this section is equal to or greater than the sum of the power company's liability for payment of tax under subdivision (3), subsection (a), section two-d of this article and this section, then the company shall pay the tax due under this section and not the tax due under subdivision (3), subsection (a), section two-d of this article and section two-m of this article. If tax liability under this section is less then the tax shall be paid under subdivision (3), subsection (a), section two-d of this article and section two-m and the tax due under this section may not be paid.
(2) Notwithstanding subdivision (1) of this subsection, for taxable years beginning on or after the first day of January, one thousand nine hundred ninety-eight, all electric and light power companies shall determine their liability for payment of tax under this article exclusively under this section.
(e) Phase-down of rate. -- Notwithstanding any provision of this code to the contrary, beginning in the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State phasing down the rate of tax provided in this section, the rate of the tax shall be twenty-two dollars and seventy-eight cents multiplied as described in subdivision (1), subsection (b) of this section; and in the second year, seventeen dollars and nine cents; and in the third year, eleven dollars and thirty-nine cents; and in the fourth year, five dollars and seventy cents and in the fifth year and thereafter, three dollars and twenty-five cents: Provided, That the other rates of tax described after the first provision in subdivision (1), subsection (b) of this section, and in subdivision (2), subsection (b) of this section, shall, likewise, be ratably reduced concurrent with the phase-down of the said rate of tax.
(f) Effective date of phase-down. -- Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand five, these amendments shall not become operational and shall have no force and effect until the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
ARTICLE 13A. SEVERANCE Tax.
§11-13A-2. Definitions.

(a) General rule. -- When used in this article, or in the administration of this article, the terms defined in subsection (b), (c) or (d) of this section shall have the meanings ascribed to them by this section, unless a different meaning is clearly required by the context in which the term is used or by specific definition.
(b) General terms defined. -- Definitions in this subsection apply to all persons subject to the taxes imposed by this article.
(1) "Business" includes all activities engaged in, or caused to be engaged in, with the object of gain or economic benefit, direct or indirect, and whether engaged in for profit, or not for profit, or by a governmental entity: Provided, That "business" does not include services rendered by an employee within the scope of his or her contract of employment. Employee services, services by a partner on behalf of his or her partnership and services by a member of any other business entity on behalf of that entity are the business of the employer or partnership, or other business entity as the case may be, and reportable as such for purposes of the taxes imposed by this article.
(2) "Corporation" includes associations, joint-stock companies and insurance companies. It also includes governmental entities when and to the extent such governmental entities engage in activities taxable under this article.
(3) "Delegate" in the phrase "or his or her delegate", when used in reference to the Tax Commissioner, means any officer or employee of the State Tax Division of the Department of Tax and Revenue duly authorized by the Tax Commissioner directly, or indirectly by one or more redelegations of authority, to perform the function mentioned or described in this article or regulations promulgated thereunder.
(4) "Fiduciary" means and includes a guardian, trustee, executor, administrator, receiver, conservator or any person acting in any fiduciary capacity for any person.
(5) "Gross proceeds" means the value, whether in money or other property, actually proceeding from the sale or lease of tangible personal property, or from the rendering of services, without any deduction for the cost of property sold or leased or expenses of any kind.
(6) "Includes" and "including", when used in a definition contained in this article, shall not be deemed to exclude other things otherwise within the meaning of the term being defined.
(7) "Partner" includes a member of a syndicate, group, pool, joint venture or other organization which is a "partnership" as defined in this section.
(8) "Partnership" includes a syndicate, group, pool, joint venture or other unincorporated organization through or by means of which any privilege taxable under this article is exercised and which is not within the meaning of this article a trust or estate or corporation. "Partnership" includes a limited liability company which is treated as a partnership for federal income tax purposes.
(9) "Person" or "company" are herein used interchangeably and include any individual, firm, partnership, mining partnership, joint venture, association, corporation, trust or other entity, or any other group or combination acting as a unit, and the plural as well as the singular number, unless the intention to give a more limited meaning is declared by the context.
(10) "Sale" includes any transfer of the ownership or title to property, whether for money or in exchange for other property or services, or any combination thereof. "Sale" includes a lease of property, whether the transaction be characterized as a rental, lease, hire, bailment or license to use. "Sale" also includes rendering services for a consideration, whether direct or indirect.
(11) "Service" includes all activities engaged in by a person for a consideration which involve the rendering of a service as distinguished from the sale of tangible personal property: Provided, That "service" does not include: (A) Services rendered by an employee to his or her employer under a contract of employment; (B) contracting; or (C) severing or processing natural resources.
(12) "Tax" means any tax imposed by this article and, for purposes of administration and collection of such tax, it includes any interest, additions to tax or penalties imposed with respect thereto under article ten of this chapter.
(13) "Tax Commissioner" or "Commissioner" means the tax Commissioner of the State of West Virginia or his or her delegate.
(14) "Taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which a tax liability is computed under this article. In the case of a return made under this article, or regulations of the Tax Commissioner, for a fractional part of a year, the term "taxable year" means the period for which such return is made.
(15) "Taxpayer" means any person subject to any tax imposed by this article.
(16) "This code" means the code of West Virginia, one thousand nine hundred thirty-one, as amended.
(17) "This State" means the State of West Virginia.
(18) "Withholding agent" means any person required by law to deduct and withhold any tax imposed by this article or under regulations promulgated by the Tax Commissioner.
(c) Specific definitions for producers of natural resources. --
(1) "Barrel of oil" means forty-two U.S. gallons of two hundred thirty-one cubic inches of liquid at a standard temperature of sixty degrees Fahrenheit.
(2) "Coal" means and includes any material composed predominantly of hydrocarbons in a solid State.
(3) "Cubic foot of gas" means the volume of gas contained in one cubic foot at a standard pressure base of fourteen point seventy-three pounds per square inch (absolute) and a standard temperature of sixty degrees Fahrenheit.
(4) "Economic interest" for the purpose of this article is synonymous with the economic interest ownership required by Section 611 of the Internal Revenue Code in effect on the thirty-first day of December, one thousand nine hundred eighty-five, entitling the taxpayer to a depletion deduction for income tax purposes: Provided, That a person who only receives an arm's length royalty shall not be considered as having an economic interest.
(5) "Extraction of ores or minerals from the ground" includes extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining only when such extraction is sold.
(6) "Gross value" in the case of natural resources means the market value of the natural resource product, in the immediate vicinity where severed, determined after application of post production processing generally applied by the industry to obtain commercially marketable or usable natural resource products. For all natural resources, "gross value" is to be reported as follows:
(A) For natural resources severed or processed (or both severed and processed) and sold during a reporting period, gross value is the gross proceeds received or receivable by the taxpayer.
(B) In a transaction involving related parties, gross value shall not be less than the fair market value for natural resources of similar grade and quality.
(C) In the absence of a sale, gross value shall be the fair market value for natural resources of similar grade and quality.
(D) If severed natural resources are purchased for the purpose of processing and resale, the gross value is the amount received or receivable during the reporting period reduced by the amount paid or payable to the taxpayer actually severing the natural resource. If natural resources are severed outside the State of West Virginia and brought into the State of West Virginia by the taxpayer for the purpose of processing and sale, the gross value is the amount received or receivable during the reporting period reduced by the fair market value of natural resources of similar grade and quality and in the same condition immediately preceding the processing of the natural resources in this State.
(E) If severed natural resources are purchased for the purpose of processing and consumption, the gross value is the fair market value of processed natural resources of similar grade and quality reduced by the amount paid or payable to the taxpayer actually severing the natural resource. If severed natural resources are severed outside the State of West Virginia and brought into the State of West Virginia by the taxpayer for the purpose of processing and consumption, the gross value is the fair market value of processed natural resources of similar grade and quality reduced by the fair market value of natural resources of similar grade and quality and in the same condition immediately preceding the processing of the natural resources.
(F) In all instances, the gross value shall be reduced by the amount of any federal energy tax imposed upon the taxpayer after the first day of June, one thousand nine hundred ninety-three, but shall not be reduced by any State or federal taxes, royalties, sales commissions or any other expense.
(G) For natural gas, gross value is the value of the natural gas at the wellhead immediately preceding transportation and transmission.
(H) For limestone or sandstone quarried or mined, gross value is the value of such stone immediately upon severance from the earth.
(7) "Mining" includes not merely the extraction of ores or minerals from the ground, but also those treatment processes necessary or incidental thereto.
(8) "Natural resources" means all forms of minerals including, but not limited to, rock, stone, limestone, coal, shale, gravel, sand, clay, natural gas, oil and natural gas liquids which are contained in or on the soils or waters of this State and includes standing timber.
(9) "Processed" or "processing" as applied to:
(A) Oil and natural gas shall not include any conversion or refining process; and
(B) Limestone or sandstone quarried or mined shall not include any treatment process or transportation after the limestone or sandstone is severed from the earth.
(10) "Related parties" means two or more persons, organizations or businesses owned or controlled directly or indirectly by the same interests. Control exists if a contract or lease, either written or oral, is entered into whereby one party mines or processes natural resources owned or held by another party and the owner or lessor participates in the severing, processing or marketing of the natural resources or receives any value other than an arm's length passive royalty interest. In the case of related parties, the Tax Commissioner may apportion or allocate the receipts between or among such persons, organizations or businesses if he or she determines that such apportionment or allocation is necessary to more clearly reflect gross value.
(11) "Severing" or "severed" means the physical removal of the natural resources from the earth or waters of this State by any means: Provided, That "severing" or "severed" shall not include the removal of natural gas from underground storage facilities into which the natural gas has been mechanically injected following its initial removal from earth: Provided, however, That "severing" or "severed" oil and natural gas shall not include any separation process of oil or natural gas commonly employed to obtain marketable natural resource products.
(12) "Stock" includes shares in an association, joint-stock company or corporation.
(13) "Taxpayer" means and includes any individual, partnership, joint venture, association, corporation, receiver, trustee, guardian, executor, administrator, fiduciary or representative of any kind engaged in the business of severing or processing (or both severing and processing) natural resources in this State for sale or use. In instances where contracts (either oral or written) are entered into whereby persons, organizations or businesses are engaged in the business of severing or processing (or both severing and processing) a natural resource but do not obtain title to or do not have an economic interest therein, the party who owns the natural resource immediately after its severance or has an economic interest therein is the taxpayer.
(d) Specific definitions for persons providing health care items or services. --
"Behavioral health services" means services provided for the care and treatment of persons with mental illness, mental retardation, developmental disabilities or alcohol or drug abuse problems in an inpatient, residential or outpatient setting, including, but not limited to, habilitative or rehabilitative interventions or services and cooking, cleaning, laundry and personal hygiene services provided for such care:
Provided, That gross receipts derived from providing behavioral health services that are included in the provider's measure of Tax under article twenty-seven of this chapter shall not be include in that provider's measure of Tax under this article. The amendment to this definition in the year two thousand four is intended to clarify the intent of the Legislature as to the activities that qualify as behavioral health services, and this clarification shall be applied retrospectively to the effective date of the amendment to this section in which the definition of "behavioral health services" was originally provided as enacted during the first extraordinary session of the Legislature in the year one thousand nine hundred ninety-three.
§11-13A-3. Imposition of tax or privilege of severing coal, limestone or sandstone, effective dates therefor; reduction of severance rate for coal mined by underground methods based on seam thickness.

(a) Imposition of tax. -- Upon every person exercising the privilege of engaging or continuing within this State in the business of severing, extracting, reducing to possession and producing for sale, profit or commercial use coal, limestone or sandstone or in the business of furnishing certain health care services, there is hereby levied and shall be collected from every person exercising such privilege an annual privilege tax.
(b) Rate and measure of tax. -- The tax imposed in subsection (a) of this section shall be five percent of the gross value of the natural resources produced, or the health care service provided as shown by the gross income derived from the sale or furnishing thereof by the producer or the provider of the health care service, except as otherwise provided in this article. In the case of coal, this five percent rate of tax includes the thirty-five one hundredths of one percent additional severance tax on coal imposed by the State for the benefit of counties and municipalities as provided in section six of this article.
(c) "Certain health care services" defined. -- For purposes of this section, the term "certain health care services" means, and is limited to, behavioral health services.
(d) (c) Tax in addition to other taxes. -- The tax imposed by this section shall apply to all persons severing or processing (or both severing and processing) in this State natural resources enumerated in subsection (a) of this section and to all persons providing certain health care services in this State as enumerated in subsection (c) of this section and shall be in addition to all other taxes imposed by law.
(e) (d) Effective date. -- This section, as amended in the year one thousand nine hundred ninety-three, shall apply to gross proceeds derived after the thirty-first day of May of such year. The language of this section, as in effect on the first day of January of such year, shall apply to gross proceeds derived prior to the first day of June of such year and, with respect to such gross proceeds, shall be fully and completely preserved.
(f) (e) Reduction of severance tax rate. -- For tax years beginning after the effective date of this subsection, any person exercising the privilege of engaging within this State in the business of severing coal for the purposes provided in subsection (a) of this section shall be allowed a reduced rate of tax on coal mined by underground methods in accordance with the following:
(i) For coal mined by underground methods from seams with an average thickness of thirty-seven inches to forty-five inches, the tax imposed in subsection (a) of this section shall be two percent of the gross value of the coal produced. For coal mined by underground methods from seams with an average thickness of less than thirty-seven inches, the tax imposed in subsection (a) of this section shall be one percent of the gross value of the coal produced. Gross value is determined from the sale of the mined coal by the producer. This rate of tax includes the thirty-five one hundredths of one percent additional severance tax imposed by the State for the benefit of counties and municipalities as provided in section six of this article.
(ii) This reduced rate of tax applies to any new underground mine producing coal after the effective date of this subsection, from seams of less than forty-five inches in average thickness or any existing mine that has not produced coal from seams forty-five inches or less in thickness in the one hundred eighty days immediately preceding the effective date of this subsection.
(iii) The seam thickness shall be based on the weighted average isopach mapping of actual coal thickness by mine as certified by a professional engineer.
§11-13A-20a. Dedication of tax.

(a) The amount of taxes collected under this article from providers of health care items or services, including any interest, additions to tax and penalties collected under article ten of this chapter, less the amount of allowable refunds and any interest payable with respect to such refunds, shall be deposited into the special revenue fund created in the State treasurer's office and known as the medicaid State share fund. Said fund shall have separate accounting for those health care providers as set forth in articles four-b and four-c, chapter nine of this code.
(b) Notwithstanding the provisions of subsection (a) of this section, for the remainder of fiscal year one thousand nine hundred ninety-three and for each succeeding fiscal year, no expenditures from taxes collected from providers of health care items or services are authorized except in accordance with appropriations by the Legislature.
(c) (a) The amount of taxes on the privilege of severing timber collected under section three-b of this article, including any interest, additions to tax and penalties collected under article ten of this chapter, less the amount of allowable refunds and any interest payable with respect to such refunds, shall be paid into a special revenue account in the State Treasury to be appropriated by the Legislature for purposes of the Division of Forestry.
(d) (b) The amount of taxes collected under this article from all other persons, including any interest, additions to tax and penalties collected under article ten of this chapter, less the amount of allowable refunds and any interest payable with respect to such refunds, shall be deposited into the general revenue fund.
ARTICLE 13B. TELECOMMUNICATIONS Tax.
§11-13B-3. Tax imposed on telecommunications businesses; effective date.

(a) Tax imposed. -- Upon every telecommunications business selling or furnishing telegraph, telephone or other telecommunications service, there is hereby imposed an annual privilege tax on account of the business, or other activities, of the taxpayer engaged in or carried on within this State, during the taxable year. The amount of taxes due shall be determined by application of rates against gross income, as specified in subsection (b) of this section for telecommunications business effective on and after the first day of July, one thousand nine hundred eighty-seven.
(b) Tax rate. -- The liability of a taxpayer under this article shall be four percent of the sum of:
(A) Its gross income from all telecommunications business beginning and ending within this State; and
(B) Its gross income apportioned to this State from all telecommunications business that either begins or ends in this State.
(c) Exemptions. -- This section shall not apply to telecommunications services provided by municipalities, or by any other political subdivisions of this State.
(d) Apportionment of certain income of telecommunications companies. -- Gross revenues of telecommunications companies derived from one point business in this State shall be apportioned to the State of West Virginia in the same proportion that the length of such company's communications pathways, weighted by the number of channels such pathways are capable of carrying, in West Virginia bears to the total length of such company's communications pathways, weighted by the number of channels such pathways are capable of carrying, located everywhere in the United States, its territories and possessions.
(e) Phase-out of tax. -- Notwithstanding any provision of this code to the contrary, beginning in the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State phasing out the tax imposed by this section, the rate of tax shall be three percent of the sum described in subsection (b) of this section; and in the second year, two percent; and in the third year, one percent; and in the fourth year and thereafter zero percent.
(f) Effective date of phase-out. -- Notwithstanding the date of enactment of the act of the Legislature amending this section in the year two thousand five, these amendments shall not become operational and shall have no force and effect until the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring changes in this article.
§11-13B-19. Phase-out of tax by Fair Taxation Amendment.
Notwithstanding anything contained in this code to the contrary, the provisions of this article shall cease to be operative and shall no longer have any force or effect with respect to tax years following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State requiring the phase-out of the tax imposed by this article: Provided, That, the foregoing notwithstanding, the provisions of this article are preserved and shall remain operative and shall be in force and effect for all tax years next preceding and including the year in which the Fair Taxation Amendment shall have been ratified by the voters and including, further, the years subsequent to such ratification until the first tax year next succeeding the end of the phase-out of the telecommunications tax as provided in the Fair Taxation Amendment and as implemented in section three of this article.
ARTICLE 13C. BUSINESS INVESTMENT AND JOBS EXPANSION Tax CREDIT.
§11-13C-17. Prospective termination of credit; effective date.

(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13D. Tax CREDITS FOR INDUSTRIAL EXPANSION AND REVITALIZATION, RESEARCH AND DEVELOPMENT PROJECTS, CERTAIN HOUSING DEVELOPMENT PROJECTS, MANAGEMENT INFORMATION SERVICES FACILITIES, INDUSTRIAL FACILITIES PRODUCING COAL-BASED LIQUIDS USED TO PRODUCE SYNTHETIC FUELS, AND AEROSPACE INDUSTRIAL FACILITIES INVESTMENTS.

§11-13D-11. Prospective termination of credit; effective date.

(a) Prospective termination of credits. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13E. BUSINESS AND OCCUPATION Tax CREDIT FOR COAL LOADING FACILITIES.

§11-13E-8. Prospective termination of credit; effective date.
(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13F. BUSINESS AND OCCUPATION Tax CREDIT FOR REDUCING ELECTRIC AND NATURAL GAS UTILITY RATES FOR LOW-INCOME RESIDENTIAL CUSTOMERS.

§11-13F-6. Prospective termination of credit; effective date.

(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13G. Tax CREDIT FOR REDUCING TELEPHONE UTILITY RATES FOR CERTAIN LOW-INCOME RESIDENTIAL CUSTOMERS.

§11-13G-6. Prospective termination of credit; effective date.

(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13J. NEIGHBORHOOD INVESTMENT PROGRAM.
§11-13J-13. Prospective termination of credit; effective date.

(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13K. Tax CREDIT FOR AGRICULTURAL EQUIPMENT.
§11-13K-7. Prospective termination of credit; effective date.
(a) Termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13N. Tax CREDIT FOR NEW STEEL MANUFACTURING OPERATIONS AFTER JULY 1, 1998.

§11-13N-13. Preservation of credit earned prior to expiration.
Notwithstanding the provisions of subsection (b), section four of this article, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for the expiration of the credit pursuant to subsection (b), section four of this article. This section shall become effective on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
ARTICLE 13Q. ECONOMIC OPPORTUNITY Tax CREDIT.
§11-13Q-22. Prospective termination of credit; effective date.

(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13R. STRATEGIC RESEARCH AND DEVELOPMENT Tax CREDIT.
§11-13R-13. Prospective termination of credit; effective date.

(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 13S. MANUFACTURING INVESTMENT Tax CREDIT.
§11-13S-11. Prospective termination of credit; effective date.

(a) Prospective termination of credit. -- Notwithstanding any other provision of this code to the contrary, no credit under this article is available to any taxpayer for tax years beginning on or after the effective date of this section.
(b) Preservation of economic benefit of previously earned credits. -- Notwithstanding the provisions of subsection (a) of this section, any person subject to the tax imposed under article twenty-eight of this chapter and who has gained entitlement to the credit provided in this article prior to the effective date of this section shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he, she or it would have received by virtue of the credit provided in this article but for subsection (a) of this section.
(c) Effective date. -- Notwithstanding the date of the enactment of the act of the Legislature enacting this section, this section shall not become operational and shall have no force and effect until the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State prospectively repealing certain tax credits provided in this code.
ARTICLE 15. CONSUMERS SALES AND SERVICE Tax.
§11-15-34. Prospective termination of tax, preservation for prior periods.

Each and every provision of this article is repealed for all tax periods beginning on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State: Provided, That tax liabilities, if any, arising for taxable periods prior to the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State shall be determined, administered, assessed and collected as if the taxes imposed by this article had not been repealed; and the rights and duties of taxpayers and the State shall be fully and completely preserved.
ARTICLE 15A. USE Tax.
§11-15A-30. Prospective termination of tax, preservation for prior periods.

Each and every provision of this article is repealed for all tax periods beginning on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State: Provided, That tax liabilities, if any, arising for taxable periods prior to the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State shall be determined, administered, assessed and collected as if the taxes imposed by this article had not been repealed; and the rights and duties of taxpayers and the State shall be fully and completely preserved.
ARTICLE 15C. GENERAL EXCISE Tax.
§11-15C-1. Short title.
This article is known and may be cited as the "General Excise Tax Law."
§11-15C-2. Legislative findings and declaration of purpose.
The Legislature finds that all vendors and other persons, regardless of their means, benefit from the availability of goods and services in the marketplaces of this State and from the use of goods and services in this State. The Legislature further finds that the functions of State government foster and protect those marketplaces and uses, and, as a result, all vendors and other persons who avail themselves of those benefits should provide some of the financial support for those functions of State government through a broad-based general excise tax on the privileges of selling, purchasing and using goods and services in this State. The Legislature further finds it to be imminently fair that, with few exceptions, the financial support which each vendor and each other person would provide for the functions of State government through such a tax should be measured by the extent to which they participate in the marketplaces or acquire such goods and services for use.
The Legislature further finds that the only exceptions to such a broad-based general excise tax should be those which mitigate its potential for pyramiding tax incidences and for complicating its administration with respect to governmental purchases, purchases for charitable, educational and public safety purposes that relieve the burdens of government and purchases of goods and services by individuals for health care which are predominately paid or reimbursed by third parties -- including the government.
The Legislature does therefore declare that the purpose of this article shall be to impose the general excise tax for the privilege of selling, purchasing and using goods and services in this State, and it shall be construed so as to give effect to the findings in this section.
§11-15C-3. Definitions of terms.
For the purposes of this article:
(a) Agricultural production. -- The term "agricultural production" means the production of food, fiber and woodland products by means of cultivation, tillage of the soil and the conduct of animal, livestock, dairy, apiary, equine or poultry husbandry, horticulture, or any other plant or animal production and all farm practices related, usual or incidental thereto, including the storage, packing, shipping and marketing, but not including any manufacturing, milling or processing of such products by persons other than the original producer thereof.
(b) Business. -- The term "business" includes all activities engaged in or caused to be engaged in with the object of gain or economic benefit, direct or indirect, and all activities of the State and its political subdivisions which involve sales of tangible personal property or the rendering of services when those sales or services compete with or may compete with the activities of other nongovernmental persons.
(c) Contracting. --
(1) In general. -- The term "contracting" means and includes the furnishing of work, or both materials and work, for another (by a sole contractor, general contractor, prime contractor, subcontractor or construction manager) in fulfillment of a contract for the construction, alteration, repair, decoration or improvement of a new or existing building or structure, or any part thereof, or for removal or demolition of a building or structure, or any part thereof, or for the alteration, improvement or development of real property. Contracting means and includes services provided by a construction manager so long as the project for which the construction manager provides the services results in a capital improvement to a building or structure or to real property.
(2) Form of contract not controlling. -- An activity that falls within the scope of the definition of contracting shall constitute contracting regardless of whether the contract governing the activity is written or verbal and regardless of whether it is in substance or form a lump sum contract, a cost-plus contract, a time and materials contract, whether or not open-ended, or any other kind of construction contract.
(3) Special rules. -- For purposes of this definition:
(A) The term "structure" includes, but is not limited to, everything built up or composed of parts joined together in some definite manner and attached or affixed to real property or which adds utility to real property or any part thereof or which adds utility to a particular parcel of property and is intended to remain there for an indefinite period of time;
(B) The term "alteration" means, and is limited to, alterations which are capital improvements to a building or structure or to real property;
(C) The term "repair" means, and is limited to, repairs which are capital improvements to a building or structure or to real property;
(D) The term "decoration" means, and is limited to, decorations which are capital improvements to a building or structure or to real property;
(E) The term "improvement" means, and is limited to, improvements which are capital improvements to a building or structure or to real property;
(F) The term "capital improvement" means improvements that are affixed to or attached to and become a part of a building or structure or the real property or which add utility to real property, or any part thereof, and that last or are intended to be relatively permanent. As used herein, "relatively permanent" means lasting at least a year in duration without the necessity for regularly scheduled recurring service to maintain the capital improvement. "Regular recurring service" means regularly scheduled service intervals of less than one year;
(G) Contracting does not include the furnishing of work, or both materials and work, in the nature of hookup, connection, installation or other services if the service is incidental to the retail sale of tangible personal property from the service provider's inventory: Provided, That the hookup, connection or installation of the foregoing is incidental to the sale of the same and performed by the seller thereof or performed in accordance with arrangements made by the seller thereof. Examples of transactions that are excluded from the definition of contracting pursuant hereto include, but are not limited to, the sale of wall-to-wall carpeting and the installation of wall-to-wall carpeting, the sale, hookup and connection of mobile homes, window air conditioning units, dishwashers, clothing washing machines or dryers, other household appliances, drapery rods, window shades, venetian blinds, canvas awnings, free standing industrial or commercial equipment and other similar items of tangible personal property. Repairs made to the foregoing are within the definition of contracting if the repairs involve permanently affixing to or improving real property or something attached thereto which extends the life of the real property or something affixed thereto or allows or intends to allow the real property or thing permanently attached thereto to remain in service for a year or longer.
(H) The term "construction manager" means a person who enters into an agreement to employ, direct, coordinate or manage design professionals and contractors who are hired and paid directly by the owner or the construction manager. The business activities of a "construction manager" as defined herein shall constitute contracting, so long as the project for which the construction manager provides the services results in a capital improvement to a building or structure or to real property.
(d) Delegate. -- The term "delegate" in the phrase "his or her delegate", when used in reference to the Tax Commissioner, means any officer or employee of the State Tax Division of the Department of Tax and Revenue duly authorized by the Tax Commissioner directly, or indirectly by one or more redelegations of authority, to perform functions mentioned or described in this article or regulations promulgated thereunder.
(e) Directly used or consumed. --
(1) General. -- The term "directly used or consumed" in the activities of manufacturing, natural resource production and agricultural production means used or consumed in those activities or operations which constitute an integral and essential part of one of those activities, as contrasted with and distinguished from those activities or operations which are simply incidental, convenient or remote to one of those activities.
(2) Uses of property or consumption of services which constitute direct use or consumption in the activities of manufacturing, natural resource production or agricultural production includes only:
(A) In the case of tangible personal property, physical incorporation of property into a finished product resulting from manufacturing, natural resource production or agricultural production;
(B) Causing a direct physical, chemical or other change upon property undergoing manufacturing, natural resource production or agricultural production;
(C) Transporting or storing property undergoing manufacturing, natural resource production or agricultural production;
(D) Measuring or verifying a change in property directly used in manufacturing, natural resource production or agricultural production;
(E) Physically controlling or directing the physical movement or operation of property directly used in manufacturing, natural resource production or agricultural production;
(F) Directly and physically recording the flow of property undergoing manufacturing, natural resource production or agricultural production;
(G) Producing energy for property directly used in manufacturing, natural resource production or agricultural production;
(H) Facilitating the transmission of gas, water, steam or electricity from the point of their diversion to property directly used in manufacturing, natural resource production or agricultural production;
(I) Controlling or otherwise regulating atmospheric conditions required for manufacturing, natural resource production or agricultural production;
(J) Serving as an operating supply for property undergoing manufacturing, natural resource production or agricultural production, or for property directly used in manufacturing, natural resource production or agricultural production;
(K) Maintenance or repair of property, including maintenance equipment, directly used in manufacturing, natural resource production or agricultural production;
(L) Storage, removal or transportation of economic waste resulting from the activities of manufacturing, natural resource production or agricultural production;
(M) Pollution control or environmental quality or protection activity directly relating to the activities of manufacturing, natural resource production or agricultural production and personnel, plant, product or community safety or security activity directly relating to the activities of manufacturing, natural resource production or agricultural production; or
(N) Otherwise be used as an integral and essential part of manufacturing, natural resource production or agricultural production.
(3) Uses of property or services which do not constitute direct use or consumption in the activities of manufacturing, natural resource production or agricultural production include, but are not limited to:
(A) Heating and illumination of office buildings;
(B) Janitorial or general cleaning activities;
(C) Personal comfort of personnel;
(D) Production planning, scheduling of work or inventory control;
(E) Marketing, general management, supervision, finance, training, accounting and administration; or
(F) An activity or function incidental or convenient to manufacturing, natural resource production or agricultural production, rather than an integral and essential part of these activities.
(3) In the activity of the generation or production of electric power, the term "directly used or consumed" means used or consumed in that activity so as to constitute an integral and essential part of that activity, as contrasted with and distinguished from activities which are simply incidental, convenient or remote to that activity.
(4) Uses of property or consumption of services which constitute direct use or consumption in the activity of the generation or production of electric power, include only:
(A) Tangible personal property or services, including equipment, machinery, apparatus, supplies, fuel and power and appliances, which are used immediately in production or generation activities and equipment, machinery, supplies, tools and repair parts used to keep in operation exempt production or generation devices. For purposes of this subsection, production or generation activities shall commence from the intake, receipt or storage of raw materials at the production plant site;
(B) Tangible personal property or services, including equipment, machinery, tools, repair parts and supplies used to keep in operation generation or production devices, and these vehicles and their equipment as are specifically designed and equipped for such purposes are exempt from the tax when used to keep such generation or production facilities in operation or repair;
(C) Tangible personal property or services used immediately in the storage, removal or transportation of economic waste resulting from the activity of the generation or production of electric power; and
(D) Tangible personal property or services used immediately in pollution control or environmental quality or protection activity or community safety or security directly relating to the activity of generation or production of electric power.
(5) Uses of property or services which would not constitute direct use or consumption in the activity of generation or production of electric power include, but are not limited to:
(A) Heating and illumination of office buildings;
(B) Janitorial or general cleaning activities;
(C) Personal comfort of personnel;
(D) Production planning, scheduling of work or inventory control;
(E) Marketing, general management, supervision, finance, training, accounting and administration; or
(F) An activity or function incidental or convenient to the activity of generation or production of electric power.
(f) Drugs. -- The term "drugs" means and includes all drugs or appliances sold to a purchaser upon prescription of a physician or dentist and any other professional person licensed to prescribe.
(g) Generation or production of electric power. -- The term "generation or production of electric power" means the generation, production of electric power engaged in by persons who were subject to the business and occupation tax formerly imposed by section two, two-d, two-m, two-n or two-o, article thirteen of this chapter before their repeal in the year two thousand four.
(h) Gross proceeds. -- The term "gross proceeds" means the amount received in money, credits, property or other consideration from sales and services within this State, without deduction on account of the cost of property sold, amounts paid for interest or discounts or other expenses whatsoever. Losses may not be deducted, but any credit or refund made for goods returned may be deducted.
(i) Licensed health care services. -- The term "licensed health care services" means those services for which a person is licensed by this State to act as a health care provider as defined in section three, article twenty-six of this chapter, as in effect on the first day of June, one thousand nine hundred ninety-one.
(j) Manufacturing. -- The term "manufacturing" means a systematic operation or integrated series of systematic operations engaged in as a business or segment of a business which transforms or converts tangible personal property by physical, chemical or other means into a different form, composition or character from that in which it originally existed.
(k) Natural resource production. -- The term "natural resource production" means, except for oil and gas, the performance, by either the owner of the natural resources or another, of the act or process of exploring, developing, severing, extracting, reducing to possession and loading for shipment and shipment for sale, profit or commercial use of any natural resource products and any reclamation, waste disposal or environmental activities associated therewith and the construction, installation or fabrication of ventilation structures, mine shafts, slopes, boreholes, dewatering structures, including associated facilities and apparatus, by the producer or others, including contractors and subcontractors, at a coal mine or coal production facility. For the natural resources oil and gas, "natural resource production" means the performance, by either the owner of the natural resources, a contractor or a subcontractor, of the act or process of exploring, developing, drilling, well-stimulation activities such as logging, perforating or fracturing, well-completion activities such as the installation of the casing, tubing and other machinery and equipment and any reclamation, waste disposal or environmental activities associated therewith, including the installation of the gathering system or other pipeline to transport the oil and gas produced or environmental activities associated therewith and any service work performed on the well or well site after production of the well has initially commenced. All work performed to install or maintain facilities up to the point of sale for severance tax purposes would be included in the term "natural resources production" and subject to the direct use concept. "Natural resource production" includes the performance or furnishing of work, or materials or work, in fulfillment of a contract for the construction, alteration, repair, decoration or improvement of a new or existing building or structure, or any part thereof, or for the alteration, improvement or development of real property, by persons other than those otherwise directly engaged in the activities specifically set forth in this subsection as "natural resource production."
(l) Person or persons. -- The terms "person" and "persons" means any individual, firm, partnership, joint venture, joint stock company, association, public or private corporation, cooperative, estate, trust, receiver, executor, administrator, other fiduciary, court-appointed representative, State or its political subdivisions or agency of either, or any group or combination of the same acting as a unit, and the plural as well as the singular number.
(m) Purchaser. -- The term "purchaser" means a person who purchases tangible personal property or a service subject to the tax imposed by this article.
(n) Sale, sales and selling. -- The terms "sale", "sales" or "selling" means and includes any transfer of the possession or ownership of tangible personal property for a consideration, including a lease or rental, when the transfer or delivery is made in the ordinary course of the transferor's business and is made to the transferee or his or her agent for consumption or use or any other purpose. Unless the context provides otherwise, the terms "sale," "sales" and "selling" shall also mean the rendering of a service for a charge.
(o) Service and selected service. -- The terms "service" and "selected service" include all activities engaged in for other persons for a consideration, which involve the rendering of a service as distinguished from the sale of tangible personal property, but shall not include the services rendered by an employee to his or her employer.
(p) Tax. -- The term "tax" means the general excise tax imposed in this article.
(q) Tax Commissioner or Commissioner. -- The terms "Tax Commissioner" or "Commissioner" are used interchangeably herein and mean the Tax Commissioner of the State of West Virginia, or his or her delegate.
(r) Taxpayer. -- The term "taxpayer" means any person liable for the tax imposed by this article.
(s) Temporarily used in this State. -- The phrase "temporarily used in this State" means a use made while passing through this State in a relatively uninterrupted manner and not intended with reference to any specific location within this State.
(t) Use. -- The term "use" means and includes the exercise of any person of any right or power over tangible personal property incident to the ownership, possession or enjoyment of such property, or by any transaction in which possession of or the exercise of any right or power over tangible personal property is acquired for a consideration, including a lease, rental or conditional sale of tangible personal property. As used in this definition, the term "enjoyment" includes a person's right to direct the disposition of the property, whether or not the person has possession of the property. The term "use" does not include the keeping, retaining or exercising of any right or power over tangible personal property for the purpose of subsequently transporting it outside this State for use thereafter solely outside this State. Proof that tangible personal property was sold for delivery in this State shall be prima facie evidence that such property was purchased for use in this State. With respect to services, the term "use" means and includes the direct receipt and active application of the results and benefits of services.
(u) Vendor. -- The term "vendor" means any person engaged in this State in businesses of furnishing services taxed by this article or making sales of, or leasing, tangible personal property, for use as defined herein. Unless otherwise limited by federal law, the term "vendor" shall include any person having or maintaining, occupying or using, within this State, directly or by a subsidiary, an office, distribution house, sales house, warehouse, or other place of business, or by any agent (by whatever name called) operating within this State under the authority of that person or its subsidiary, regardless of whether such place of business or agent is located in this State permanently or temporarily, or whether such person or subsidiary is admitted to do business within this State.
The term "vendor" also means and includes any of the following:
(1) Any person engaged in business anywhere who solicits orders from persons located in this State for the sale of tangible personal property or taxable services by means of a telecommunication or television shopping system which utilizes a telephone or mail ordering system, including toll free telephone numbers, reverse charge telephone systems or other telephone ordering systems and which is intended by the retailer to be broadcast by cable television or other means of broadcasting to persons located in this State: Provided, That such soliciting person has physical presence in this State in the form of employees, offices, agents or sales outlets in this State, or any other presence that provides the necessary minimum contacts for a Constitutionally sufficient nexus for a State to require such a person to collect and remit excise taxes.
(2) Any person engaged in business anywhere who solicits orders from persons located in this State for the sale of tangible personal property or taxable services by means of advertising that is broadcast from, printed at, or distributed from, a location in this State if the advertising is primarily intended to be disseminated to persons located in this State and is only secondarily or incidentally disseminated to bordering jurisdictions. For purposes of this paragraph, advertising which is broadcast from a radio or television station located in this State or is printed in or distributed by a newspaper published in this State is rebuttably presumed to be primarily intended for dissemination to persons located in this State: Provided, That such soliciting person has physical presence in this State in the form of employees, offices, agents or sales outlets in this State, or any other presence that provides the necessary minimum contacts for a Constitutionally sufficient nexus for a State to require such person to collect and remit excise taxes.
(3) Any person engaged in business anywhere and who solicits orders from persons located in this State for the sale of tangible personal property or taxable services by mail if the solicitations are substantial and recurring and if the retailer economically benefits from any banking, financing, debt collection, telecommunication or marketing activities occurring in this State or economically benefits from the location in this State of an authorized installation, servicing or repair facility, regardless of whether such facility is owned or operated by such person or by a related or unrelated person: Provided, That such soliciting person has physical presence in this State in the form of employees, offices, agents or sales outlets in this State, or any other presence that provides the necessary minimum contacts for a Constitutionally sufficient nexus for a State to require such a person to collect and remit excise taxes.
(4) Any person having a franchisee or licensee operating in this State under that person's trade name, if the franchisee or licensee is required to collect the tax imposed by this article: Provided, That such person has physical presence in this State in the form of employees, offices, agents or sales outlets in this State, or any other presence that provides the necessary minimum contacts for a Constitutionally sufficient nexus for a State to require such a person to collect and remit excise taxes.
(5) Any person engaging in business anywhere who, pursuant to a contract with a cable television operator located in this State, solicits from persons located in this State orders for the sale of tangible personal property or taxable services by means of advertising which is transmitted or distributed over a cable television system in this State: Provided, That such retailer has physical presence in this State in the form of employees, offices, agents or sales outlets in this State, or any other presence that provides the necessary minimum contacts for a Constitutionally sufficient nexus for a State to require such person to collect and remit excise taxes.
§11-15C-4. Imposition of tax; debt owed to this State; allocation of obligations for charging, paying, collecting and remitting tax; rate of tax.

(a) Imposition of tax. -- A general excise tax is hereby imposed on the vendor for the privilege of selling tangible personal property and of rendering services in this State and on the purchaser for the privilege of using tangible personal property and services in this State. The tax due to be remitted or paid under this article shall, until fully remitted or paid, constitute a debt owed by the taxpayer to this State.
(b) Allocation of obligations for charging, paying, collecting and remitting the tax. -- It is the intent of this article that the tax imposed herein shall be passed on by the vendor to, and shall be paid by, the purchaser, in accordance with the following allocation of obligations:
(1) Vendor obligations. --
(A) General. -- The vendor shall charge the purchaser for the tax, shall collect the tax from the purchaser and shall remit the tax to the Tax Commissioner all as provided in this article. The tax shall be added to and constitute a part of the sales price, and shall be collectible as such by the vendor who shall account to the Tax Commissioner for all tax paid by the purchaser.
(B) Tax kept separate from gross proceeds of sale. -- The vendor shall keep the amount of tax paid separate from the gross proceeds of sale exclusive of the tax unless authorized in writing by the Tax Commissioner to keep such amount of tax in a different manner. Where such authorization is given, the State's claim shall be enforceable against and shall take precedence over all other claims against the moneys commingled.
(C) Nonresidents. -- Every vendor engaging in business anywhere and making sales of tangible personal property for delivery into this State, or with the knowledge, directly or indirectly, that the property or services he, she or it are rendering are intended for use in this State, that are not exempted under the provisions of section seven of this article, shall at the time of making such sales or rendering such services, whether within or without the State, collect the tax imposed by this article from the purchaser, and give to the purchaser a receipt therefor in the manner and form prescribed by the Tax Commissioner, if the Tax Commissioner shall, by regulation, so prescribe.
Each such vendor shall list with the Tax Commissioner the name and address of all his, her or its agents operating in this State, and the location of any and all distribution or sales houses or offices or other places of business in this State. Any person required to collect use tax under the provisions of this subdivision shall be required to obtain a business registration certificate, as provided in article twelve of this chapter, unless the person does not have sufficient presence in this State so that such registration would violate any provision of the Constitution or laws of this State or of the United States.
The Tax Commissioner may, in his or her discretion, upon application authorize the collection of the tax herein imposed by any person not engaging in business within this State, who, to the satisfaction of the Tax Commissioner, furnishes adequate security to insure collection and payment of the tax. Such person shall be issued, without charge, a permit to collect such tax in such manner, and subject to such regulations and agreements as the Tax Commissioner shall prescribe. When so authorized, it shall be the duty of such person to collect the applicable tax, if any, upon all tangible personal property and services sold to his, her or its knowledge for use within this State, in the same manner and subject to the same requirements as a vendor engaging in business within this State. Such authority and permit may be cancelled when, at any time, the Tax Commissioner considers the security inadequate, or that such tax can more effectively be collected from the person using such property in this State.
(D) Failure to collect and remit. -- If any vendor required to collect and remit the tax to the Tax Commissioner fails to do so, he, she or it shall be personally liable for such amount as he, she or it failed to collect and remit: Provided, That, except where the transaction is shown to be exempt from tax under section seven of this article or is subject to the provisions of section nine of this article, when a purchaser fails to pay the tax to the vendor, the vendor may avoid such liability by reporting to the Tax Commissioner, in writing with the return due to be filed for that same period, the fact of such failure and the purchaser's name, address and such other information as the Tax Commissioner may require.
(E) Absorbing tax. -- It shall be unlawful for any vendor to advertise or hold out or State to the public or to any purchaser, consumer or user, directly or indirectly, that the tax or any part thereof imposed by this article will be assumed or absorbed by the vendor or that it will not be added to the price of the property sold or service rendered, or if added that it or any part thereof will be refunded. The Tax Commissioner shall have the power to adopt and promulgate rules for adding such tax, or the equivalent thereof, by providing different methods applying uniformly to vendors within the same general classification for the purpose of enabling such vendors to add and collect, as far as practicable, the amount of such tax.
(2) Purchaser obligations. -- Any person who uses any tangible personal property or service in this State upon which the tax imposed by this article has not been paid to a vendor or directly to the Tax Commissioner, is, unless the purchase or use of the property or service is exempt hereunder, liable for the amount of such tax. If any purchaser does not pay to the vendor the tax imposed by section four of this article, or, in the case of a sale made exempt from the tax, a purchaser fails to present to the vendor an adequate written certification of the fact of, and basis by which, the sale is not subject to this tax, or if the purchaser signs or presents to the vendor a false certificate, or after signing and presenting a proper certificate uses the items purchased in such manner that the sale would be subject to the tax, the purchaser shall be directly liable for the amount of tax applicable to the transaction or transactions: Provided, That nothing herein relieves any purchaser who owes the tax and who has not paid the tax from liability therefor. In such cases the Tax Commissioner may make an assessment against such purchaser, based upon any information within his or her possession or that may come into his or her possession. The assessment and notice thereof shall be made and given in accordance with the provisions of article ten of this chapter.
(3) Joint and separate liability. -- Unless and until the tax due has been remitted by the vendor or paid by the purchaser to the Tax Commissioner, both the vendor and the purchaser shall remain liable for the tax except as otherwise provided in this article: Provided, That the tax shall only be collected once by the Tax Commissioner.
(c) Rate of tax. -- Beginning on the first day of July, two thousand five, the general excise tax imposed by this article shall be at the rate of six cents on each dollar of sales or services: Provided, That:
(1) Sales or use of gasoline and special fuel shall be taxable at the rate provided in section seventeen of this article, and
(2) Sales of contracting services and materials to a property owner by a person engaged in contracting for construction of a new dwelling the property owner will occupy as his or her principal personal residence which shall be taxable at the rate of three cents on each dollar of sales or services.
(d) Application of rate of tax where price is in fractional dollar amounts. -- There shall be no tax on sales where the monetary consideration is five cents or less. The amount of the tax for transactions subject to the six percent rate shall be computed as follows:
(1) On each sale, where the monetary consideration is from six cents to sixteen cents, both inclusive, one cent.
(2) On each sale, where the monetary consideration is from seventeen cents to thirty-three cents, both inclusive, two cents.
(3) On each sale, where the monetary consideration is from thirty-four cents to fifty cents, both inclusive, three cents.
(4) On each sale, where the monetary consideration is from fifty-one cents to sixty-seven cents, both inclusive, four cents.
(5) On each sale, where the monetary consideration is from sixty-eight cents to eighty-four cents, both inclusive, five cents.
(6) On each sale, where the monetary consideration is from eighty-five cents to one dollar, both inclusive, six cents.
(7) If the sale price is in excess of one dollar, six cents on each whole dollar of sale price, and upon any fractional part of a dollar in excess of whole dollars as follows: One cent on the fractional part of the dollar if less than seventeen cents; two cents on the fractional part of the dollar if in excess of sixteen cents but less than thirty-four cents; three cents on the fractional part of the dollar if in excess of thirty-three cents but less than fifty-one cents; four cents on the fractional part of the dollar if in excess of fifty cents but less than sixty-eight cents; five cents on the fractional part of the dollar if in excess of sixty-seven cents but less than eighty-five cents; and six cents on the fractional part of the dollar if in excess of eighty-four cents. For example, the tax on sales from one dollar and one cent to one dollar and sixteen cents, both inclusive, seven cents; on sales from one dollar and seventeen cents to one dollar and thirty-three cents, both inclusive, eight cents; on sales from one dollar and thirty-four cents to one dollar and fifty cents, both inclusive, nine cents; on sales from one dollar and fifty-one cents to one dollar and sixty-seven cents, both inclusive, ten cents; on sales from one dollar and sixty-eight cents to one dollar and eighty-four cents, both inclusive, eleven cents and on sales from one dollar and eighty-five cents to two dollars, both inclusive, twelve cents.
(e) Separate transactions aggregated for billing; coin-operated vending devices. -- Separate sales, such as daily or weekly deliveries, shall not be aggregated for the purpose of computation of the tax even though such sales are aggregated in the billing or payment therefor. Notwithstanding any other provision, coin-operated amusement and vending machine sales shall be aggregated for the purpose of computation of this tax.
§11-15C-5. Total amount collected is to be remitted.
No profit shall accrue to any person as a result of the collection of the tax imposed by this article notwithstanding the total amount of such taxes collected may be in excess of the amount for which such person would be liable by the application of the levy of six percent to the gross proceeds of his, her or its sales, and the total of all taxes collected by such person shall be returned and remitted to the Tax Commissioner as hereinafter provided.
§11-15C-6. Vendor and purchaser must show sale or use exempt; presumption.

In the case of sales and uses exempt from the tax imposed by this article, the burden of proving that a sale or use was exempt from the tax shall be upon both the purchaser and the vendor, unless in the case of the vendor he, she or it takes from the purchaser a certificate signed by and bearing the address of the purchaser and setting forth the reason for the exemption and substantially in the form prescribed by the Tax Commissioner. To prevent evasion, it shall be presumed that all sales and uses are subject to the tax until the contrary is clearly established in a particular case.
§11-15C-7. Exemptions.
(a) Exemptions for which exemption certificate may be issued. -- A person having a right or claim to any exemption set forth in this subsection may, in lieu of paying the tax imposed by this article and filing a claim for refund, execute a certificate of exemption, in the form required by the Tax Commissioner, and deliver it to the vendor of the property or service, in the manner required by the Tax Commissioner. However, the Tax Commissioner may, by rule, specify those exemptions authorized in this subsection for which exemption certificates are not required. The following sales or uses of tangible personal property and services are exempt as provided in this subsection:
(1) School textbooks. -- Sales and use of textbooks required to be used in any of the schools of this State or in any institution in this State which qualifies as a nonprofit or educational institution subject to the West Virginia Department of Education and the Arts, the board of trustees of the university system of West Virginia or the board of directors for colleges located in this State;
(2) Government purchases. -- Purchases and uses of property and services by this State, its institutions or subdivisions, governmental units, institutions or subdivisions of other States: Provided, That the law of the other State allows the same exemption to governmental units or subdivisions of this State and to the United States, including agencies of federal, State or local governments for distribution in public welfare or relief work;
(3) Certain sales to churches. -- Sales and use of property or services to churches which make no charge whatsoever for the services they render: Provided, That the exemption granted in this subdivision applies only to services, equipment, supplies, food for meals and materials directly used or consumed by these organizations and does not apply to purchases of gasoline or special fuel;
(4) Certain purchases by certain nonprofit and charitable organizations. -- Purchases and use of tangible personal property or services by a corporation or organization which is exempt from federal income taxes under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as amended, and which is:
(A) A church or a convention or association of churches as defined in Section 170 of the Internal Revenue Code of 1986, as amended;
(B) An elementary or secondary school which maintains a regular faculty and curriculum and has a regularly enrolled body of pupils or students in attendance at the place in this State where its educational activities are regularly carried on;
(C) A corporation or organization which annually receives more than one half of its support from any combination of gifts, grants, direct or indirect charitable contributions or membership fees;
(D) An organization which has no paid employees and its gross income from fund raisers, less reasonable and necessary expenses incurred to raise the gross income (or the tangible personal property or services purchased with the net income), is donated to an organization which is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;
(E) A youth organization, such as the Girl Scouts of the United States of America, the Boy Scouts of America or the YMCA Indian Guide/Princess Program and the local affiliates thereof, which is organized and operated exclusively for charitable purposes and has as its primary purpose the nonsectarian character development and citizenship training of its members;
(F) For purposes of this subsection:
(i) The term "support" includes, but is not limited to:
(I) Gifts, grants, contributions or membership fees;
(II) Gross receipts from fund raisers which include receipts from admissions, sales of merchandise, performance of services or furnishing of facilities in any activity which is not an unrelated trade or business within the meaning of Section 513 of the Internal Revenue Code of 1986, as amended;
(III) Net income from unrelated business activities, whether or not the activities are carried on regularly as a trade or business;
(IV) Gross investment income as defined in Section 509(e) of the Internal Revenue Code of 1986, as amended;
(V) Tax revenues levied for the benefit of a corporation or organization either paid to or expended on behalf of the organization; and
(VI) The value of services or facilities (exclusive of services or facilities generally furnished to the public without charge) furnished by a governmental unit referred to in Section 170(c)(1) of the Internal Revenue Code of 1986, as amended, to an organization without charge. This term does not include any gain from the sale or other disposition of property which would be considered as gain from the sale or exchange of a capital asset, or the value of an exemption from any federal, State or local tax or any similar benefit;
(ii) The term "charitable contribution" means a contribution or gift to or for the use of a corporation or organization, described in Section 170(c)(2) of the Internal Revenue Code of 1986, as amended; and
(iii) The term "membership fee" does not include any amounts paid for tangible personal property or specific services rendered to members by the corporation or organization;
(G) The exemption allowed by this subdivision does not apply to purchases or use of gasoline or special fuel, or to purchases or use of motor vehicles titled by the Division of Motor Vehicles under the provisions of article three, chapter seventeen-a of this code or to purchases of tangible personal property or services to be used or consumed in the generation of unrelated business income as defined in Section 513 of the Internal Revenue Code of 1986, as amended: Provided, That the exemption granted in this subdivision applies only to purchases and use of services, equipment, supplies and materials used or consumed in the activities for which the organizations qualify as tax exempt organizations under the Internal Revenue Code and does not apply to purchases or use of gasoline or special fuel or of motor vehicles titled by the Division of Motor Vehicles under the provisions of article three, chapter seventeen-a of this code;
(5) Isolated transactions. -- An isolated transaction in which any otherwise taxable service or any tangible personal property is sold, transferred, offered for sale or delivered by the owner of the property or by his or her representative for the owner's account, the sale, transfer, offer for sale or delivery not being made in the ordinary course of repeated and successive transactions of like character by the owner or on his or her account by the representative: Provided, That nothing contained in this subdivision may be construed to prevent an owner who sells, transfers or offers for sale tangible personal property in an isolated transaction through an auctioneer from availing himself or herself of the exemption provided in this subdivision, regardless of where the isolated sale takes place. The Tax Commissioner may propose a legislative rule for promulgation pursuant to article three, chapter twenty-nine-a of this code which he or she considers necessary for the efficient administration of this exemption;
(6) Sales for resale. -- Sales of services for resale as such and of tangible personal property to a person for the purpose of reselling the tangible personal property: Provided, That sales of gasoline and special fuel by distributors and importers are taxable except when the sale is to another distributor for resale: Provided, however, That sales of building materials or building supplies or other property to any person engaging in the activity of contracting, as defined in this article, which is to be installed in, affixed to or incorporated by that person or his or her agent into any real property, building or structure is exempt under this subdivision;
(7) Prescription drugs, insulin and appliances. -- Sales and use of drugs dispensed upon prescription and sales of insulin and appliances to consumers for medical purposes;
(8) Licensed health care services. -- Charges to patients for licensed health care services and for goods incidental to the rendering of such services;
(9) Advertising. -- Sales and use of radio and television broadcasting time, preprinted advertising circulars and newspaper and outdoor advertising space for the advertisement of goods or services;
(10) Casual and occasional sales by certain nonprofit organizations. -- Casual and occasional sales of property or services not conducted in a repeated manner or in the ordinary course of repetitive and successive transactions of like character by a corporation or organization which is exempt from tax under subdivision (4) of this subsection on its purchases of tangible personal property or services:
(A) For purposes of this subdivision, the term "casual and occasional sales not conducted in a repeated manner or in the ordinary course of repetitive and successive transactions of like character" means sales of tangible personal property or services at fund raisers sponsored by a corporation or organization which is exempt, under subdivision (6) of this subsection, from payment of the tax imposed by this article on its purchases, when the fund raisers are of limited duration and are held no more than six times during any twelve-month period and "limited duration" means no more than eighty-four consecutive hours; and
(B) The provisions of this subdivision apply to sales made after the thirtieth day of June, two thousand five;
(11) Sales to certain private colleges. -- Sales of property or services to a school which has approval from the board of trustees of the university system of West Virginia or the Board of Directors of the State College System to award degrees, which has its principal campus in this State, and which is exempt from federal and State income taxes under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended: Provided, That sales of gasoline and special fuel are taxable;
(12) Certain sales of mobile homes subject to reduced tax rate. -- Sales of mobile homes to be used by purchasers as their principal year-round residence and dwelling: Provided, That those sales are subject to tax at the three-percent rate;
(13) Lottery tickets, materials and services. -- Sales of lottery tickets, materials and services by licensed lottery sales agents and lottery retailers authorized by the State Lottery Commission, under the provisions of article twenty-two, chapter twenty-nine of this code;
(14) Food stamps and WIC drafts. -- Any sales of tangible personal property or services lawfully paid for with food stamps pursuant to the federal food stamp program codified in 7 U.S.C. §2011 et seq, as amended, or with drafts issued through the West Virginia special supplement food program for women, infants and children codified in 42 U.S.C. §1786;
(15) Tickets for admission to certain school activities. -- Sales of tickets for admission to activities sponsored by elementary and secondary schools located within this State;
(16) Sales between related business entities. -- The sale and use of tangible personal property and the rendering and use of services by one corporation, partnership or limited liability company to or for another corporation, partnership or limited liability company when the entities are members of the same controlled group or are related taxpayers as defined in Section 267 of the Internal Revenue Code. "Control" means ownership, directly or indirectly, of stock, partnership interests or membership interests possessing fifty percent or more of the total combined voting power of all classes of the stock of a corporation, partnership interests of a partnership or membership interests of a limited liability company entitled to vote or ownership, directly or indirectly, of stock, equity interests or membership interests possessing fifty percent or more of the value of the corporation, partnership or limited liability company;
(17) Certain sales or purchases of food. -- Food for the following are exempt:
(A) Food used, purchased or sold by a public or private school, school-sponsored student organizations or school-sponsored parent-teacher associations to students enrolled in the school or to employees of the school for consumption during normal school hours; but not those sales of food made to the general public;
(B) Food used, purchased or sold by a public or private college or university to students enrolled at the college or university when the sales are made on a contract basis so that a fixed price is paid for consumption of food products for a specific period of time without respect to the amount of food product actually consumed by the particular individual contracting for the sale and no money is paid at the time the food product is served or consumed;
(C) Food used, purchased or sold by a charitable or private nonprofit organization, a nonprofit organization or a governmental agency under a program to provide food to low-income persons at or below cost;
(D) Food sold or used by a charitable or private nonprofit organization, a nonprofit organization or a governmental agency under a program operating in West Virginia for a minimum of five years to provide food at or below cost to individuals who perform a minimum of two hours of community service for each unit of food purchased from the organization;
(E) Food sold in an occasional sale by a charitable or nonprofit organization, including volunteer fire departments and rescue squads, if the purpose of the sale is to obtain revenue for the functions and activities of the organization and the revenue obtained is actually expended for that purpose;
(F) Food sold or used by any religious organization at a social or other gathering conducted by it or under its auspices, if the purpose in selling the food is to obtain revenue for the functions and activities of the organization and the revenue obtained from selling the food is actually used in carrying on those functions and activities: Provided, That purchases made by the organizations are not exempt as a purchase for resale;
(18) Tax prohibited transactions. -- Sales and use of tangible personal property or services to any person which this State is prohibited from taxing under the laws of the United States or under the Constitution of this State;
(19) Certain babysitting services. -- Sales of baby-sitting services by individuals who baby-sit for a profit: Provided, That the gross receipts of the individual from the performance of baby-sitting services do not exceed five thousand dollars in a taxable year;
(20) Certain government services and materials. -- Sales and use of governmental services or governmental materials sold in the normal course of government operations;
(21) Certain sales by volunteer fire and emergency rescue organizations. -- Sales and use of tangible personal property and services by volunteer fire departments and rescue squads that are exempt from federal income taxes under Section 501(c)(3) or (c) (4) of the Internal Revenue Code of 1986, as amended, if the sole purpose of the sale is to obtain revenue for the functions and activities of the organization and the revenue obtained is exempt from federal income tax and actually expended for that purpose;
(22) Special district excise tax. -- Any sale, service or use upon which a special district excise tax is paid, pursuant to the provisions of section eleven, article thirteen-b, chapter eight of this code;
(23) Property and services temporarily used in this State. -- All tangible personal property and services purchased in another State but temporarily used in this State by a nonresident individual, except gasoline or special fuel not contained in the supply tank of a motor vehicle that is not a motor carrier;
(24) Residence or business moved to this State. -- All tangible personal property and services purchased outside this State for use outside this State by a nonresident person who, at least six months thereafter, uses such property or services in this State following the permanent establishment of his, her or its business or residence in this State;
(b) Refundable exemptions. -- Any person having a right or claim to any exemption set forth in this subsection shall first pay to the vendor the tax imposed by this article and then apply to the Tax Commissioner for a refund or credit, or as provided in section nine of this article, give to the vendor his, her or its West Virginia direct pay permit number. The following sales of tangible personal property and services are exempt from tax as provided in this subsection:
(1) Sales to certain charitable organizations. -- Sales of property or services to bona fide charitable organizations which make no charge whatsoever for the services they render: Provided, That the exemption granted in this subdivision applies only to services, equipment, supplies, food, meals and materials directly used or consumed by these organizations and does not apply to purchases of gasoline or special fuel;
(2) Sales for direct use in certain production activities. -- Sales and use of services and of machinery, supplies, materials and other tangible personal property directly used or consumed in the activities of manufacturing, natural resource production, agricultural production or generation or production of electric power to persons engaged in the activities named in this subdivision as a business: Provided, That this exemption does not apply to purchases of gasoline or special fuel;
(3) Certain sales to certain fraternal or social organizations. -- Sales of tangible personal property or services to nationally chartered fraternal or social organizations for the sole purpose of free distribution in public welfare or relief work: Provided, That sales of gasoline and special fuel are taxable;
(4) Certain sales to firefighting organizations. -- Sales and use of services, including but not limited to those for construction or improvement of real estate and for vehicle repair and modification, and of tangible personal property, including but not limited to firefighting or station house equipment, to any volunteer fire department organized and incorporated under the laws of the State of West Virginia, if such services or property are directly used or consumed for the public safety purposes of such organizations: Provided, That sales of gasoline and special fuel are taxable.
§11-15C-8. Exemptions; exceptions for sales of liquors and wines to private clubs.

The exemption provided in this article for sales of tangible personal property for the purpose of resale in the form of tangible personal property shall not apply to persons or organizations licensed under authority of article seven, chapter sixty of this code for the purchase of liquor or wines for resale either from the Alcohol Beverage Control Commissioner or from retail liquor licensees licensed under authority of article three-a, chapter sixty of this code.
§11-15C-9. Direct pay permits.
(a) Authorized. -- Notwithstanding any other provision of this article, the Tax Commissioner may, pursuant to rules promulgated by him or her in accordance with article three, chapter twenty-nine-a of this code, authorize a person that is a purchaser, user, distributor or lessee to which sales or leases of tangible personal property are made or services provided, to pay any tax imposed by this article directly to the Tax Commissioner and waive the collection of the tax by that person's vendor. No such authority shall be granted or exercised except upon application to the Tax Commissioner and after issuance by the Tax Commissioner of a direct pay permit. Each direct pay permit granted pursuant to this section is valid until surrendered by the holder or canceled for cause by the Commissioner. The Commissioner shall prescribe by rules promulgated in accordance with article three, chapter twenty-nine-a of this code, those activities which will cause cancellation of a direct pay permit issued pursuant to this section. Upon issuance of a direct pay permit, payment of the tax imposed or assertion of the exemptions allowed by this article on sales and leases of tangible personal property and sales of taxable services from the vendors of the personal property or services shall be made directly to the Tax Commissioner by the permit holder.
(b) Returns. -- On or before the fifteenth day of each month, every permit holder shall make and file with the Tax Commissioner a general excise tax direct pay permit return for the preceding month in the form prescribed by the Tax Commissioner showing the total value of the tangible personal property used, the amount of taxable services purchased, the amount of general excise tax due from the permit holder, which shall be paid to the Tax Commissioner with the return, and any other information as the Tax Commissioner considers necessary: Provided, That if the amount of tax due averages less than two hundred fifty dollars per month, the Tax Commissioner may permit the filing of quarterly returns in lieu of monthly returns and the amount of tax shown on the returns to be due shall be remitted on or before the fifteenth day following the close of the calendar quarter; and if the amount of tax due averages less than one hundred fifty dollars per calendar quarter, the Tax Commissioner may permit the filing of an annual direct pay permit return and the amount of tax shown on the return to be due shall be remitted on or before the last day of January each year: Provided, however, That 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 in this subsection. The Tax Commissioner, upon written request by the permit holder, may grant a reasonable extension of time, upon such terms as the Tax Commissioner may require, for the making and filing of direct pay permit returns and paying the tax due. Interest on the tax shall be chargeable on every extended payment at the rate specified in section seventeen, article ten of this chapter.
(c) Term of permit. -- A permit issued pursuant to this section is valid until expiration of the taxpayer's registration year under article twelve of this chapter. This permit is automatically renewed when the taxpayer's business registration certificate is issued for the next succeeding fiscal year, unless the permit is surrendered by the holder or canceled for cause by the Tax Commissioner.
(d) Effect of holding permit. -- Persons who hold a direct payment permit which has not been canceled are not required to pay the tax to the vendor as otherwise provided in this article. In lieu of paying the tax, such persons shall notify each vendor from whom tangible personal property is purchased or leased or from whom services are purchased of their direct payment permit number and that the tax is being paid directly to the Tax Commissioner. Upon receipt of the notice, the vendor is absolved from all duties and liabilities imposed by this chapter for the collection and remittance of the tax with respect to sales of tangible personal property and sales of services to the permit holder. Vendors who make sales upon which the tax is not collected by reason of the provisions of this section shall maintain records in such manner that the amount involved and identity of each purchaser may be ascertained.
(e) Termination of permit. -- Upon the expiration, cancellation or surrender of a direct payment permit, the provisions of this chapter, without regard to this section, will thereafter apply to the person who previously held the permit, and that person shall promptly notify in writing vendors from whom tangible personal property or services are purchased or leased of the cancellation or surrender. Upon receipt of the notice, the vendor is subject to the provisions of this chapter, without regard to this section, with respect to all sales, distributions, leases or storage of tangible personal property, thereafter made to or for that person.
§11-15C-10. Apportionment of gross proceeds.
(a) Exempt and taxable uses. -- Whenever a taxpayer will use purchased or leased tangible personal property, a service or the results of a service for both exempt and nonexempt purposes, to determine the portion of the gross proceeds paid to the vendor for such property or service upon which the tax imposed by this article shall apply, the gross proceeds shall be apportioned between the exempt and taxable uses in a manner established as reasonable by the Tax Commissioner by regulations the Tax Commissioner may prescribe.
(b) Uses inside and outside this State. -- Whenever a person uses purchased or leased tangible personal property, a service or the results of a service both inside and outside this State, to determine the portion of the gross proceeds paid to the vendor for such property or service upon which the tax imposed by this article shall apply, the gross proceeds shall be apportioned between the in-State and out-of-State uses in a manner established as reasonable by the Tax Commissioner by regulations the Tax Commissioner may prescribe.
§11-15C-11. Agreements by competing taxpayers.
To provide uniform methods of adding the average equivalent of the tax to the selling price in each sale or transaction subject to the tax, appropriate rules, except as otherwise herein provided, may be agreed upon or adopted by competing taxpayers or associations of taxpayers, except that all collections shall be made on the basis of the total transaction at the time of sale, without regard to the value of the separate items making up the total amount of the sale. Such rules, if they do not involve price fixing, shall not be deemed illegal as in restraint of trade or commerce. The Tax Commissioner shall cooperate in formulating such rules, and, in the event appropriate rules are not submitted to him or her within thirty days after this article takes effect, or within a reasonable extended period fixed by the Tax Commissioner, he or she shall formulate and promulgate appropriate rules and regulations to effectuate the purpose of this section.
§11-15C-12. Collection of tax when sale on credit.
A vendor doing business wholly or partially on a credit basis shall require the purchaser to pay the full amount of tax due upon a credit sale at the time such sale is made or within thirty days thereafter.
§11-15C-13. When separate records of sales required.
Any vendor engaged in a business making sales or rendering services subject to the Tax imposed under this article, who is at the same time engaged in some other kind of business making sales or rendering services, not taxable under this article, shall keep records to show separately the transactions used in determining the tax base herein taxed. In the event such person fails to keep such separate records there shall be levied upon him or her a tax based upon the entire gross proceeds of both or all of his or her businesses.
§11-15C-14. Sales to affiliated companies or persons.
In determining gross proceeds of sales from one to another of two or more related or affiliated persons, or under other circumstances where as a result of the relationship or affiliation between the vendor and purchaser the gross proceeds from a sale are not indicative of the true value of the subject matter of the sale, the Tax Commissioner shall prescribe uniform and equitable rules for determining the amount upon which the tax shall be imposed, corresponding as nearly as possible to gross proceeds from the sale of similar products or services of like quality or character, where no common interest exists between the parties.
§11-15C-15. Tax return and payment; installments; exception; annual return; credit; consolidated returns; extension.

(a) Monthly installments. -- Subject to the exceptions set forth in subsection (b) of this section, the taxes imposed by this article shall be due and payable in monthly installments, on or before the fifteenth day of the month next succeeding the month in which the tax accrued. The taxpayer shall, on or before the fifteenth day of each month, make out and mail to the Tax Commissioner a return for the preceding month, in the form prescribed by the Tax Commissioner, showing: (1) The total gross proceeds of his, her or its business for that month; (2) the gross proceeds of his, her or its business upon which the tax is based; (3) the amount of the tax for which he, she or it is liable; and (4) any further information necessary in the computation and collection of the tax which the Tax Commissioner may require. A remittance for the amount of the tax shall accompany the return.
(b) Accelerated installment. --
(1) Taxpayers whose average monthly installments of tax for the previous calendar year exceeds one hundred thousand dollars, shall remit the tax attributable to the first fifteen days of June each year on or before the twenty-third day of said month of June.
(2) For purposes of complying with subdivision (1) of this subsection (b), the taxpayer shall remit an amount equal to the amount of tax imposed by this article on actual taxable sales of tangible personal property and taxable services during the first fifteen days of June or, at the taxpayer's election, the taxpayer may remit an amount equal to fifty percent of the taxpayer's liability for tax under this article on taxable sales of tangible personal property and services made during the preceding month of May.
(3) For a business which has not been in existence for a full calendar year, the total tax due from the business during such prior calendar year shall be divided by the number of months, including fractions of a month, that it was in business during such prior calendar year; and if that amount exceeds one hundred thousand dollars, the tax attributable to the first fifteen days of June each year shall be remitted on or before the twenty-third day of said month of June as provided in subdivision (2) of this subsection (b).
(4) When a taxpayer required to make an advanced payment of tax under subdivision (1) of this subsection (b) makes out its return for the month of June, which is due on the fifteenth day of July, such taxpayer may claim as a credit against its liability under this article for tax on taxable transactions during the month of June, the amount of the advanced payment of tax made under subdivision (1) of this subsection (b).
(c) Exceptions. --
(1) When the total tax remittance for which a person is liable does not exceed an average monthly amount over the taxable year of two hundred fifty dollars, he, she or it may pay the tax and make a quarterly return on or before the fifteenth day of the first month in the next succeeding quarter in lieu of monthly returns: Provided, That the Tax Commissioner may, by nonemergency legislative rules promulgated pursuant to article three, chapter twenty-nine-a of this code, change the minimum amount established in this subsection.
(2) When the total tax remittance for which a person is liable does not in the aggregate exceed six hundred dollars for the taxable year, he, she or it may pay the tax and make an annual return on or before the fifteenth day of the first month next succeeding the end of the taxable year: Provided, That the Tax Commissioner may, by nonemergency legislative rules promulgated pursuant to article three, chapter twenty-nine-a of this code, change the minimum amount established in this subsection.
(3) In addition to the provisions of paragraphs (1) and (2) of this subsection, the Tax Commissioner may, upon written request, also authorize a taxpayer whose books and records are not kept on a monthly basis to file returns at times other than those specified in subsection (a) of this section, but in no event shall a taxpayer make less than one return a calendar month, except as provided in this subsection, or as may be authorized in writing by the Tax Commissioner.
(d) Annual return. -- On or before thirty days after the end of the tax year, each person liable for the payment of any tax due under this article shall make and file an annual return in such form as may be required by the Tax Commissioner, showing:
(1) Total gross proceeds of his, her or its business for preceding tax year;
(2) Gross proceeds upon which the tax for that year was computed, and
(3) Any other information necessary in the computation or collection of the tax that the Tax Commissioner may require.
After deducting the amount of prior payments during the tax year, the taxpayer shall forward the annual return along with payment of any remaining tax, due for the preceding tax year, to the Tax Commissioner. The taxpayer or his, her or its duly authorized agent shall verify the return under oath.
(e) Credit. -- A person is entitled to a credit against the tax imposed by this article on the use of a particular item of tangible personal property or service equal to the amount, if any, of excise tax lawfully paid to another State for the purchase of the property or service: Provided, That the amount of credit allowed shall not exceed the amount of tax imposed under the article on the use of the property or service in this State.
For the purposes of this subsection:
(1) "Excise tax" includes a sales tax or compensating use tax imposed on the use of tangible personal property or service by the State in which the purchase occurred; and
(2) "State" includes the District of Columbia but does not include any of the several territories organized by congress.
(f) Consolidated returns. -- Whenever a person operates two or more places of business of like character, he, she or it shall file a consolidated monthly return, showing, for each place of business, total sales and charges for rendering services, total transactions subject to tax and total tax collections. In addition, a person filing consolidated monthly returns shall attach to his, her or its consolidated annual return a schedule showing, for each place of business, total sales and charges for rendering services, total transactions subject to tax and total tax collections.
(g) Extension. -- The Tax Commissioner for good cause shown, may, on written application of a taxpayer, extend the time for making any return required by the provisions of this article.
§11-15C-16. Liability of officers of corporation.
If a vendor is an association or corporation, the officers thereof having actual control of the funds thereof, or any other responsible person, shall be personally liable, jointly and severally, for any default on the part of the association or corporation in complying with the provisions of this article, and payment of the tax and any additions to tax, penalties and interest thereon imposed with respect thereto by article ten of this chapter may be enforced against them as against the association or corporation which they represent.
§11-15C-17. Tax on gasoline and special fuel.
(a) General. -- All sales of gasoline or special fuel by distributors or importers, except when to another distributor for resale in this State, when delivery is made in this State, and all other sales and use of gasoline or special fuel furnished or delivered to purchasers in this State, shall be subject to the tax imposed by this article, on the measure and at the rate set forth in this section, notwithstanding any provision of this article to the contrary. Sales of gasoline or special fuel by a person who paid the tax imposed by this article on purchases of fuel, shall not thereafter be again taxed under the provisions of this article. This section shall be construed so that all gallons of gasoline or special fuel sold and delivered, or delivered, in this State are taxed one time: Provided, That gasoline or special fuel contained in the supply tank of a motor vehicle that is not a motor carrier shall not be taxable, except that gasoline or special fuel imported in the supply tank or auxiliary tank of construction equipment, mining equipment, track maintenance equipment or other similar equipment, shall be taxed in the same manner as that in the supply tank of a motor carrier.
(b) Measure of tax. -- The measure of tax on sales of gasoline or special fuel shall be the average wholesale price as defined and determined in this section. For purposes of maintaining revenue for highways, and recognizing that the tax imposed by this article is generally imposed on gross proceeds from sales to purchasers, whereas the tax on gasoline and special fuel herein is imposed on the average wholesale price of such gasoline and special fuel; in no case, for the purposes of taxation under this article, shall such average wholesale price be deemed to be less than ninety-seven cents per gallon of gasoline or special fuel for all gallons of gasoline and special fuel sold or used during the reporting period, notwithstanding any provision of this article to the contrary.
To simplify determining the average wholesale price of all gasoline and special fuel, the tax Commissioner shall, effective with the period beginning the first day of the month of the effective date of this section and each first day of January, annually, thereafter, determine the average wholesale price of gasoline and special fuel for each annual period, on the basis of sales data gathered for the preceding period of the first day of July through the thirty-first day of October. Notification of the average wholesale price of gasoline and special fuel shall be given by the Tax Commissioner at least thirty days in advance of each first day of January, annual period, by filing notice of the average wholesale price in the State register, and by such other means as the Tax Commissioner considers reasonable: Provided, That notice of the average wholesale price of gasoline and special fuel for the first period shall be timely given if filed in the State register on the effective date of this section.
All actions of the Tax Commissioner in acquiring data necessary to establish and determine the average wholesale price of gasoline and special fuel, in providing notification of his or her determination prior to the effective date of any change in rate, and in establishing and determining the average wholesale price of fuel, may be made by the Tax Commissioner without compliance with the provisions of article three, chapter twenty-nine-a of this code. In any administrative or court proceeding brought to challenge the average wholesale price of gasoline and special fuel as determined by the Tax Commissioner, his or her determination shall be presumed to be correct and shall not be set aside unless it is clearly erroneous.
(c) Rate of tax. -- For purposes of this section, the rate of tax shall be five cents for each dollar of the average wholesale price which shall, in no case, be considered to be less than ninety-seven cents per gallon for all gallons of gasoline and special fuel taxable under this article.
(d) Computation of tax due from motor carriers. -- Every person who operates or causes to be operated a motor carrier in this State shall pay the tax imposed by this section on the average wholesale price of all gallons of gasoline or special fuel used in the operation of any motor carrier within this State, under the following rules:
(1) The total amount of gasoline or special fuel used in the operation of the motor carrier within this State shall be that proportion of the total amount of gasoline and special fuel used in any motor carrier's operations within and without this State, that the total number of miles traveled within this State bears to the total number of miles traveled within and without this State.
(2) A motor carrier shall first determine the gross amount of tax due under this section on the average wholesale value, determined under subsection (b), of all gasoline and special fuel used in the operation of the motor carrier within this State during the preceding quarter, as if all gasoline and special fuel had been purchased outside this State.
(3) Next, the taxpayer shall determine the total tax paid under this article fifteen on all gasoline and special fuel purchased in this State for use in the operation of the motor carrier.
(4) The difference between (2) and (3) is the amount of tax due under this article when (2) is greater than (3), or the amount to be refunded or credited to the motor carrier when (3) is greater than (2), which refund or credit shall be allowed in the same manner and under the same conditions as a refund or credit is allowed for the tax imposed by article fourteen of this chapter.
(e) Definitions. -- For purposes of this section:
(1) "Aircraft" shall include any airplane or helicopter that lands in this State on a regular or routine basis, and transports passengers or freight.
(2) "Aircraft fuel" shall mean gasoline and special fuel suitable for use in any aircraft engine.
(3) "Average wholesale price" shall mean the single, Statewide average per gallon wholesale price, rounded to the third decimal (thousandth of a cent), exclusive of State and federal excise taxes on each gallon of gasoline or diesel fuel, as determined by the Tax Commissioner from information furnished by distributors of gasoline or special fuel in this State, or such other information regarding wholesale selling prices as the Tax Commissioner may gather, or a combination of such information: Provided, That in no event shall the average wholesale price be determined to be less than ninety-seven cents per gallon of gasoline or special fuel.
(4) "Distributor" shall mean and include every person:
(A) Who produces, manufactures, processes or otherwise alters gasoline or special fuel in this State for use or for sale; or
(B) Who engages in this State in the sale of gasoline or special fuel for the purpose of resale or for distribution; or
(C) Who receives gasoline or special fuel into the cargo tank of a tank wagon in this State for use or sale by such person.
(5) "Gasoline" shall mean and include any product commonly or commercially known as gasoline, regardless of classification, suitable for use as fuel in an internal combustion engine, except special fuel as hereinafter defined, including any product obtained by blending together any one or more products, with or without other products, if the resultant product is capable of the same use.
(6) "Importer" shall mean and include every person, resident or nonresident, other than a distributor, who receives gasoline or special fuel outside this State for use, sale or consumption within this State, but shall not include the fuel in the supply tank of a motor vehicle that is not a motor carrier.
(7) "Motor carrier" shall mean and include: (A) Any passenger vehicle which has seats for more than nine passengers in addition to the driver, any road tractor, tractor truck or any truck having more than two axles, which is operated or caused to be operated, by any person on any highway in this State using gasoline or special fuel; and (B) any aircraft, barge or other watercraft, or locomotive transporting passengers or freight in or through this State.
(8) "Motor vehicle" shall mean and include automobiles, motor carriers, motor trucks, motorcycles and all other vehicles or equipment, engines or machines which are operated or propelled by combustion of gasoline or special fuel.
(9) "Retail dealer of gasoline or special fuel" shall mean and include any person not a distributor, who sells gasoline or special fuel from a fixed location in this State to users.
(10) "Special fuel" shall mean and include any gas or liquid, other than gasoline, used or suitable for use as fuel in an internal combustion engine. The term "special fuel" shall include products commonly known as natural or casinghead gasoline and shall include gasoline and special fuel for heating any private residential dwelling, building or other premises; but shall not include any petroleum product or chemical compound such as alcohol, industrial solvent, heavy furnace oil, lubricant, etc., not commonly used nor practicably suited for use as fuel in an internal combustion engine.
(11) "Supply tank" shall mean any receptacle on a motor vehicle from which gasoline or special fuel is supplied for the propulsion of the vehicle or equipment located thereon, exclusive of a cargo tank. A supply tank includes a separate compartment of a cargo tank used as a supply tank, and any auxiliary tank or receptacle of any kind or cargo tank, from which gasoline or special fuel is supplied for the propulsion of the vehicle, whether or not such tank or receptacle is directly connected to the fuel supply line of the vehicle.
(12) "Tank wagon" shall mean and include any motor vehicle or vessel with a cargo tank or cargo tanks ordinarily used for making deliveries of gasoline or special fuel, or both, for sale or use.
(13) "User" shall mean any person who purchases gasoline or special fuel for use or consumption.
(f) Tax due. -- The tax on sales of gasoline and special fuel shall be paid by each taxpayer on or before the twenty-fifth day of each month, by check, bank draft, certified check or money order, payable to the Tax Commissioner for the amount of tax due for the preceding month, notwithstanding any provision of this article to the contrary.
(g) Monthly return. -- On or before the twenty-fifth day of each month, the taxpayer shall make and file a return for the preceding month showing such information as the Tax Commissioner may require, notwithstanding any provision of this article to the contrary.
(h) Compliance. -- To facilitate ease of administration and compliance by taxpayers, the Tax Commissioner may require distributors, importers, motor carriers and other persons liable for the tax imposed by this article on sales or use of gasoline or special fuel, to file a combined return and make a combined payment of the tax due under this article on sales or use of gasoline and special fuel, and the tax due under articles fourteen or fourteen-a of this chapter, on such gasoline and special fuel. In order to encourage use of a combined return each month and the making of a single payment each month for both taxes, the due dates of the return and taxes due under articles fourteen and fourteen-a of this chapter are hereby changed from the last day of each month to the twenty-fifth day of each month, notwithstanding any provisions in articles fourteen or fourteen-a of this chapter to the contrary.
(g) Dedication of tax to highways. -- All tax collected under the provisions of this section after deducting the amount of any refunds lawfully paid, shall be deposited in the "road fund" in the State Treasurer's Office, and shall be used only for the purpose of construction, reconstruction, maintenance and repair of highways, and payment of principal and interest on State bonds issued for highway purposes: Provided, That notwithstanding any provision to the contrary, any tax collected on the sale of aircraft fuel shall be deposited in the State treasurer's Office and transferred to the State Aeronautical Commission to be used for the purpose of matching federal funds available for the reconstruction, maintenance and repair of public airports and airport runways.
(h) Construction. -- This section shall not be construed as taxing any sale of gasoline or special fuel which this State is prohibited from taxing under the Constitution of this State or the Constitution or laws of the United States.
§11-15C-18. Receivership; bankruptcy; priority of tax.
In the distribution, voluntary or compulsory, in receivership, bankruptcy or otherwise, of the property or estate of any person, all taxes due and unpaid under this article shall be paid from the first money available for distribution in priority to all claims and liens except taxes and debts due the United States which under federal law are given priority over the debts and liens created by this article. Any person charged with the administration or distribution of any such property or estate who shall violate the provisions of this section shall be personally liable for any taxes accrued and unpaid under this article which are chargeable against the person whose property or estate is in administration or distribution.
§11-15C-19. Bond to secure payment.
The Tax Commissioner may, when in his or her judgment it is necessary and advisable to do so in order to secure the collection of the tax imposed under this article, authorize any person subject to such tax and any vendor required or authorized to collect such tax, to file with him or her a bond issued by a surety company authorized to transact business in this State and approved by the Insurance Commissioner as to solvency and responsibility, in such amount as the Tax Commissioner may fix, to secure the payment of any tax, additions to tax, penalties and interest due or which may become due from such person or vendor. In lieu of such bond, securities approved by the Tax Commissioner, in such amount as he or she may prescribe, may be deposited with him or her, which securities shall be kept in the custody of the State treasurer and may be sold by him or her at public or private sale, after notice to the depositor thereof, if it becomes necessary to do so in order to recover any tax, additions to tax, penalties and interest due. Upon any such sale, the surplus, if any, above the amounts due under this article and article ten of this chapter, shall be returned to the person or vendor who deposited the securities.
§11-15C-20. Keeping and preserving of taxpayer records; nonresidents.

(a) General. -- Each taxpayer shall keep complete and accurate records of taxable sales, purchases and of charges, together with a record of the tax collected or paid thereon, and shall keep all invoices, bills of lading and such other pertinent documents in such form as the Tax Commissioner may by regulation require. Such records and other documents shall be preserved for a period of time not less than three years, unless the Tax Commissioner shall consent in writing to their destruction within that period or by order require that they be kept longer.
(b) Nonresidents. -- A nonresident person engaged in a business within this State in conduct as a result of which the tax imposed by this article becomes due, shall keep within this State adequate records concerning the operation of the business, and all taxes collected and paid in the course of the business. The amount of the tax collected shall not be transmitted outside of this State without the written consent of, and in accordance with the conditions prescribed by the Tax Commissioner.
§11-15C-21. Records of Tax Commissioner; preservation of returns.
The Tax Commissioner shall keep full and accurate records of all moneys received by him or her. He or she shall preserve all returns filed with him or her hereunder for five years.
§11-15C-22. Proceeds of tax; appropriation of certain revenues.
(a) General. -- The proceeds of the tax imposed by this article shall be deposited in the general revenue fund of the State except as otherwise expressly provided in this article.
(b) School major improvement fund. -- After the payment or commitment of the proceeds or collections of this tax for the purposes set forth in section twenty-one of this article, on the first day of each month, there shall be dedicated monthly from the collections of this tax, the amount of four hundred sixteen thousand six hundred sixty-seven dollars and the amount dedicated shall be deposited on a monthly basis into the school major improvement fund created pursuant to section six, article nine-d, chapter eighteen of this code.
(c) School construction fund. -- After the payment or commitment of the proceeds or collections of this tax for the purposes set forth in section twenty-one of this article:
(1) On the first day of each month, there shall be dedicated monthly from the collections of this Tax, the amount of one million four hundred sixteen thousand six hundred sixty-seven dollars and the amount dedicated shall be deposited into the school construction fund created pursuant to section six , article nine-d, chapter eighteen of this code.
(2) There shall also be dedicated from the collections of this Tax, an amount equal to any annual difference that may occur between the debt service payment for the one thousand nine hundred ninety-seven fiscal year for school improvement bonds issued under the better school building amendment under the provisions of article nine-c, chapter eighteen of this code and the amount of funds required for debt service on these school improvement bonds in any current fiscal year thereafter. This annual difference shall be prorated monthly, added to the monthly deposit in subdivision (1) of this subsection and deposited into the school construction fund created pursuant to section six, article nine-d, chapter eighteen of this code.
§11-15C-23. Severability.
If any of the provisions of this article are held invalid, such invalidation shall not affect other provisions which can be given effect without the invalid provision and to this end the provisions of this article are declared to be severable.
§11-15C-24. General procedure and administration; criminal penalties.

(a) General procedure and administration. -- Each and every provision of articles ten and ten-a of this chapter shall apply to the tax imposed by this article with like effect as if said articles were applicable only to the tax imposed by this article and were set forth in extenso in this article.
(b) Criminal penalties. -- Each and every provision of article nine of this chapter shall apply to the tax imposed by this article with like effect as if said article nine were applicable only to the tax imposed by this article and were set forth in extenso in this article.
§11-15C-25. Tax in addition to other taxes and charges.
The tax imposed under this article shall be in addition to all other taxes, licenses, fees or other charges to which the persons taxed herein are subject under the law of this State.
§11-15C-26. Effective date.
This article shall take effect on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
ARTICLE 19. SOFT DRINKS Tax.
§11-19-13. Prospective termination of tax, preservation for prior periods.

Each and every provision of this article is repealed for all tax periods beginning on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State: Provided, That tax liabilities, if any, arising for taxable periods prior to the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State shall be determined, administered, assessed and collected as if the taxes imposed by this article had not been repealed; and the rights and duties of taxpayers and the State shall be fully and completely preserved.
ARTICLE 21. PERSONAL INCOME Tax.
§11-21-8i. Preservation of economic benefit of credit.
Notwithstanding the repeal of this article as provided in section ninety-six of this article, any person subject to the tax imposed under articles twenty-one-a or article twenty-eight of this chapter and who has gained entitlement to the credit provided in section eight-a of this article prior to the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, shall be allowed a credit against the tax imposed under articles twenty-one-a or twenty-eight of this chapter in an amount and for the tax year or years that will secure for such person an actual economic benefit equal in amount to the economic benefit he or she would have received by virtue of the credit provided in section eight-a of this article but for section ninety-six of this article.
§11-21-96. Prospective termination of Tax, preservation for prior periods.

Each and every provision of this article is repealed for all tax periods beginning on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State: Provided, That tax liabilities, if any, arising for taxable periods prior to the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State shall be determined, administered, assessed and collected as if the taxes imposed by this article had not been repealed; and the rights and duties of taxpayers and the State shall be fully and completely preserved.
ARTICLE 21A. PROGRESSIVE INCOME Tax.
PART I. GENERAL.

§11-21A-1. Short title; arrangement and classification.
This article may be cited as the "West Virginia Progressive Income Tax Act." No inference, implication or presumption of legislative construction shall be drawn or made by reason of the location or grouping of any particular section or provision or portion of this article, nor shall the descriptive matter or headings relating to any part, section, subsection, or paragraph be given any legal effect.
§11-21A-2. Legislative findings.
The Legislature finds that the existence of opportunities for the people of the State to earn income from work and investment depend, in part, on the protections and services of State government and that, as a result, it is fair and appropriate that the persons who benefit from those opportunities should contribute to the financial support of State Government. The Legislature further finds that a progressive tax on the income earned by those persons is an imminently fair means by which such contributions should be made.
The Legislature further finds that, because all persons who purchase goods and services in this State contribute to the financial support of State Government through the general excise tax imposed under article fifteen-c of this chapter, fairness would also be served by exempting from further taxation the income of those individuals and families that are below poverty levels established by the federal government from time to time. Likewise, the Legislature finds that those of lesser means whose prospects for ever receiving greater levels of income are limited by age or disability should not have to contribute any more of their income to such financial support beyond the other taxes they also pay to this State.
The Legislature further finds that the adoption by this State for its progressive income tax purposes of the provisions of the laws of the United States relating to the determination of income for federal income tax purposes will: (1) Simplify preparation of State income tax returns by taxpayers; (2) improve enforcement of the State income tax through better use of information obtained from federal income tax audits; and (3) aid interpretation of the State tax law through increased use of federal judicial and administrative determinations and precedents.
The Legislature does, therefore declare that this article twenty-one-a be construed in light of the foregoing findings so as to accomplish the fairness in taxation aforesaid.
§11-21A-3. Imposition of tax.
(a) Imposition of tax. -- A tax determined in accordance with the rates hereinafter set forth in this article is hereby imposed for each taxable year on the West Virginia taxable income of every individual, estate and trust.
(b) Partners and partnerships. -- A partnership as such shall not be subject to tax under this article. Persons carrying on business as partners shall be liable for tax under this article only in their separate or individual capacities.
(c) Associations taxable as corporations. -- An association, trust or other unincorporated organization which is taxable as a corporation for federal income tax purposes, shall not be subject to tax under this article.
(d) Exempt trusts and organizations. -- A trust or other unincorporated organization which by reason of its purposes or activities is exempt from federal income tax shall be exempt from tax under this article (regardless of whether subject to federal income tax on unrelated business taxable income).
(e) Cross references. -- For definitions of West Virginia taxable income of:
(1) Resident individual, see section ten.
(2) Resident estate or trust, see section seventeen.
(3) Nonresident individual, see section thirty-one.
(4) Nonresident estate or trust, see section thirty-three.
§11-21A-4. Rate of tax, applicability; effect of subsequent rate changes.

(a) Rate of tax on individuals (except married individuals filing separate returns), individuals filing joint returns, heads of households, estates and trusts. -- The tax imposed by section three of this article on the West Virginia taxable income of every individual (except married individuals filing separate returns); every individual who is a head of a household in the determination of his or her federal income tax for the taxable year; every husband and wife who file a joint return under this article; every individual who is entitled to file his or her federal income tax return for the taxable year as a surviving spouse; and every estate and trust shall be determined in accordance with the following table:
If the West Virginia taxable income is:
The tax is:
Not over $40,000 5% of the taxable income; and
Over $40,000 $2,000.00 plus 6.5% of excess over $40,000.
(b) Rate of tax on married individuals filing separate returns. -- In the case of husband and wife filing separate returns under this article for the taxable year, the tax imposed by section three of this article on the West Virginia taxable income of each spouse shall be determined in accordance with the following table:
If the West Virginia taxable income is:
The tax is:
Not over $20,000 5% of the taxable income; and
Over $20,000 $1,000.00 plus 6.5% of excess over $20,000.
(c) Applicability of this section. -- The provisions of this section, as amended by this act, shall be applicable in determining the rate of tax imposed by this article for all taxable years beginning after the thirty-first day of December, two thousand four.
(d) Effect of rate changes during taxable year. -- (1) If any rate of tax imposed by this article changes to become effective after the thirty-first day of December, of a calendar year, and if the taxable year includes the effective date of the change of rate (unless that date is the first day of the taxable year) then: (A) Tentative taxes shall be computed by applying the rate for the period before the effective date of the change of rate, and the rate for the period on and after such date, to the taxable income for the entire taxable year; and (B) the tax for such taxable year shall be the sum of that proportion of each tentative tax which the number of months in each period bears to the number of months in the entire taxable year.
(2) For purposes of subdivision (1) of this subsection:
(A) If the rate changes for taxable years "beginning after" or "ending after" a certain date, the following day shall be considered the effective date of the change; and
(B) If a rate changes for taxable years "beginning on or after" a certain date, that date shall be considered the effective date of the change of rate.
§11-21A-5. Optional tax for certain resident individuals.
(a) General. -- The Tax Commissioner may promulgate tables enabling resident individuals who meet the conditions of this section to compute their taxes under section three of this article on the basis of their federal adjusted gross incomes.
(b) Tables. -- The tables promulgated under this section shall show the amounts of tax due under section three of this article to the nearest two dollars, or such smaller amount as the Tax Commissioner may establish.
(c) Conditions for optional computation. -- The optional tax computation under this section may be elected only if all the following conditions are satisfied by the taxpayer, or by both husband and wife whose federal income tax is determined on a joint return:
(1) The taxpayer has elected to take the standard deduction for federal income tax purposes or to pay the federal optional tax.
(2) The taxpayer has no items of income or deduction described in sections eleven-b and eleven-d as an individual, as a partner, or as a beneficiary of an estate or trust.
(3) The taxpayer's federal income tax is not reduced by operation of:
(A) The federal alternative tax on long-term capital gains; or
(B) A federal provision which has the effect of taxing income of the taxable year as if it were partly or wholly income of a prior taxable year.
(4) The taxpayer satisfies such other conditions, not inconsistent with the purposes of this section, as may be specified by the Tax Commissioner.
(d) Manner of election. -- The election by a taxpayer to compute his or her tax under this section shall be made under regulations of the Tax Commissioner.
(e) Husband and wife computing West Virginia taxes separately. --
(1) A husband or wife who files a separate federal return may elect the optional tax computation under this section only if the other spouse's tax under this article, if any, is determined under this section.
(2) A husband and wife who file a joint federal return may not elect the optional tax computation under this section if they elect to determine their West Virginia taxes separately.
§11-21A-6. Accounting periods and methods.
(a) Accounting periods. -- A taxpayer's taxable year under this article shall be the same as his or her taxable year for federal income tax purposes.
(b) Change of accounting periods. -- If a taxpayer's taxable year is changed for federal income tax purposes, his or her taxable year for purposes of this article shall be similarly changed. If a taxable year of less than twelve months results from a change of taxable year, the West Virginia personal exemptions shall be prorated under regulations of the Tax Commissioner.
(c) Accounting methods. -- A taxpayer's method of accounting under this article shall be the same as his or her method of accounting for federal income tax purposes. In the absence of any method of accounting for federal income tax purposes, West Virginia taxable income shall be computed under such method as in the opinion of the Tax Commissioner clearly reflects income.
(d) Change of accounting methods. --
(1) If a taxpayer's method of accounting is changed for federal income tax purposes, his or her method of accounting for purposes of this article shall be similarly changed.
(2) If a taxpayer's method of accounting is changed, other than from an accrual to an installment method, any additional tax which results from adjustments determined to be necessary solely by reason of the change shall not be greater than if such adjustments were rateably allocated and included for the taxable year of the change and the preceding taxable years, not in excess of two, during which the taxpayer used the method of accounting from which the change is made.
(3) If a taxpayer's method of accounting is changed from an accrual to an installment method, any additional tax for the year of such change of method and for any subsequent year which is attributable to the receipt of installment payments properly accrued in a prior year shall be reduced by the portion of tax for any prior taxable year attributable to the accrual of such installment payments, in accordance with regulations of the tax Commissioner.
§11-21A-7. Resident and nonresident defined.
(a) Resident individual. -- Means an individual:
(1) Who is domiciled in this State, unless he or she maintains no permanent place of abode in this State, maintains a permanent place of abode elsewhere, and spends in the aggregate not more than thirty days of the taxable year in this State; or
(2) Who is not domiciled in this State but maintains a permanent place of abode in this State and spends in the aggregate more than one hundred eighty-three days of the taxable year in this State.
(b) Nonresident individual. -- A nonresident individual means an individual who is not a resident.
(c) Resident estate or trust. -- A resident estate or trust means:
(1) The estate of a decedent who at his or her death was domiciled in this State;
(2) A trust created by will of a decedent who at his or her death was domiciled in this State; or
(3) A trust created by, or consisting of property of, a person domiciled in this State.
(d) Nonresident estate or trust. -- A nonresident estate or trust means an estate or trust which is not a resident.
§11-21A-8. Meaning of terms; medical savings accounts.
(a) Any term used in this article has the same meaning as when used in a comparable context in the laws of the United States relating to income taxes, unless a different meaning is clearly required. Any reference in this article to the laws of the United States means the provisions of the Internal Revenue Code of 1986, as amended, and any other provisions of the laws of the United States that relate to the determination of income for federal income tax purposes. All amendments made to the laws of the United States after the thirty-first day of December, two thousand four, but prior to the first day of January, two thousand five, shall be given effect in determining the taxes imposed by this article to the same extent those changes are allowed for federal income tax purposes, whether the changes are retroactive or prospective, but no amendment to the laws of the United States made on or after the first day of January, two thousand five, shall be given any effect.
(b) Medical savings accounts. -- The term "taxable trust" does not include a medical savings account established pursuant to section twenty, article fifteen, chapter thirty-three of this code or section fifteen, article sixteen of said chapter. Employer contributions to a medical savings account established pursuant to said sections, are not "wages" for purposes of withholding under section seventy-one of this article.
(c) Surtax. -- The term "surtax" means the twenty percent additional tax imposed on taxable withdrawals from a medical savings account under section twenty, article fifteen, chapter thirty-three of this code, and the twenty percent additional tax imposed on taxable withdrawals from a medical savings account under section fifteen, article sixteen of said chapter, which are collected by the Tax Commissioner as tax collected under this article.
§11-21A-9. Meaning of endorser, guarantor and accommodation.
Any person pledging his or her credit or collateral as an endorser, guarantor, or accommodation to another person or corporation for the purpose of assisting another in obtaining credit shall not be, or construed to be, an investor in said borrower as to the amount so borrowed, nor shall any payments by said borrower on the indebtedness be, or construed to be, dividend to the endorser, guarantor or accommodation.
§11-21A-10. West Virginia taxable income of a resident individual.
(a) General. -- The West Virginia taxable income of a resident individual shall be his or her West Virginia adjusted gross income less his or her West Virginia personal exemptions, as determined under this part.
(b) Husband and wife. --
(1) If the federal taxable income of husband and wife is determined on a separate federal return, their West Virginia taxable incomes shall be separately determined.
(2) If the federal taxable income of husband and wife is determined on a joint federal return, or if neither files a federal return:
(A) Their tax shall be determined on their joint West Virginia taxable income; or
(B) Separate taxes may be determined on their separate West Virginia taxable incomes if they so elect if they comply with the requirements of the Tax Commissioner in setting forth information on a single form or on separate forms, as may be required by the Tax Commissioner.
(3) If either husband or wife is a resident and the other is a nonresident, separate taxes shall be determined on their separate West Virginia taxable incomes on such single or separate forms as may be required by the Tax Commissioner, unless both elect to determine their joint West Virginia taxable income as if both were residents.
§11-21A-11. West Virginia adjusted gross income of resident individual.

(a) General. -- The West Virginia adjusted gross income of a resident individual means his or her federal adjusted gross income as defined in the laws of the United States for the taxable year with the modifications specified in this section.
(b) Modifications increasing federal adjusted gross income. -- There shall be added to federal adjusted gross income unless already included therein the following items:
(1) Interest income on obligations of any State other than this State or of a political subdivision of any other State unless created by compact or agreement to which this State is a party;
(2) Interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States, which the laws of the United States exempt from federal income tax but not from State income taxes;
(3) Any deduction allowed when determining federal adjusted gross income for federal income tax purposes for the taxable year that is not allowed as a deduction under this article for the taxable year;
(4) Interest on indebtedness incurred or continued to purchase or carry obligations or securities the income from which is exempt from tax under this article, to the extent deductible in determining federal adjusted gross income;
(5) Interest on a depository institution tax-exempt saving certificate which is allowed as an exclusion from federal gross income under Section 128 of the Internal Revenue Code, for the federal taxable year;
(6) The amount of a lump sum distribution for which the taxpayer has elected under Section 402(e) of the Internal Revenue Code of 1986, as amended, to be separately taxed for federal income tax purposes; and
(7) Amounts withdrawn from a medical savings account established by or for an individual under section twenty, article fifteen or section fifteen, article sixteen, both of chapter thirty-three of this code, that are used for a purpose other than payment of medical expenses, as defined in those sections.
(c) Modifications reducing federal adjusted gross income. -- There shall be subtracted from federal adjusted gross income to the extent included herein:
(1) Interest income on obligations of the United States and its possessions to the extent includable in gross income for federal income tax purposes;
(2) Interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States or of the State of West Virginia to the extent includable in gross income for federal income tax purposes but exempt from State income taxes under the laws of the United States or of the State of West Virginia, including federal interest or dividends paid to shareholders of a regulated investment company under Section 852 of the Internal Revenue Code;
(3) Any amount included in federal adjusted gross income for federal income tax purposes for the taxable year that is not included in federal adjusted gross income under this article for the taxable year;
(4) The amount of any refund or credit for overpayment of income taxes imposed by this State, or any other taxing jurisdiction, to the extent properly included in gross income for federal income tax purposes;
(5) Contributions from any source to a medical savings account established by or for the individual pursuant to section twenty, article fifteen or section fifteen, article sixteen, chapter thirty-three of this code, plus interest earned on the account, to the extent includable in federal adjusted gross income for federal tax purposes: Provided, That the amount subtracted pursuant to this subdivision for any one taxable year may not exceed two thousand dollars plus interest earned on the account. For married individuals filing a joint return, the maximum deduction is computed separately for each individual; and
(6) Any other income which this State is prohibited from taxing under the laws of the United States.
(d) Modification for West Virginia fiduciary adjustment. -- There shall be added to or subtracted from federal adjusted gross income, as the case may be, the taxpayer's share, as beneficiary of an estate or trust, of the West Virginia fiduciary adjustment determined under section eighteen of this article.
(e) Partners and S corporation shareholders. -- The amounts of modifications required to be made under this section by a partner or an S corporation shareholder, which relate to items of income, gain, loss or deduction of a partnership or an S corporation, shall be determined under section fifteen of this article.
(f) Husband and wife. -- If husband and wife determine their federal income tax on a joint return but determine their West Virginia income taxes separately, they shall determine their West Virginia adjusted gross incomes separately as if their federal adjusted gross incomes had been determined separately.
§11-21A-12. Additional modification reducing federal adjusted gross income.

In addition to amounts authorized to be subtracted from federal adjusted gross income pursuant to subsection (c), section eleven of this article, any payment made under a prepaid tuition contract as provided under section seven, article thirty, chapter eighteen of this code, is also an authorized modification reducing federal adjusted gross income, but only to the extent the amount is not allowable as a deduction when arriving at the taxpayer's federal adjusted gross income for the taxable year in which the payment is made. This modification is available regardless of the type of return form filed. The taxpayer may also elect to carry forward the modification over a period not to exceed five taxable years, beginning in the taxable year in which the payment was made.
§11-21A-13. Deduction for long-term care insurance.
For taxable years beginning on and after the first day of January, two thousand five, in addition to amounts authorized to be subtracted from federal adjusted gross income pursuant to subsection (c), section eleven of this article, any payment during the taxable year for premiums for a long-term care insurance policy as defined in section four, article fifteen-a, chapter thirty-three of this code that offers coverage to either the taxpayer, the taxpayer's spouse, parent or a dependent as defined in Section 152 of the Internal Revenue Code of 1986, as amended, is an authorized modification reducing federal adjusted gross income, but only to the extent the amount is not allowable as a deduction when arriving at the taxpayer's federal adjusted gross income for the taxable year in which the payment is made.
§11-21A-14. West Virginia personal exemptions of a resident individual.

(a) General. -- For any tax imposed under the provisions of this article with respect to any taxable year beginning on or after the first day of January, two thousand five, a resident individual shall be allowed a West Virginia exemption for each exemption for which he or she is entitled to a deduction for the taxable year for federal income tax purposes multiplied by the applicable federal poverty amount reduced by: (1) The result of multiplying the number of West Virginia exemptions claimed times twenty-five percent of the federal poverty amount for each exemption allowed in excess of two; and (2) reduced by twenty-five percent of the federal poverty amount for each four thousand dollars by which the taxpayer's West Virginia adjusted gross income exceeds forty thousand dollars: Provided, That the amount of each West Virginia personal exemption shall not be less than two thousand twelve dollars.
(b) Applicable federal poverty amount. -- For purposes of this article, the term "applicable federal poverty amount" means the amount last published by the United States Department of Health and Human Services, prior to the first day of January of any taxable year, which represents the amount of income constituting the federal poverty line for a single-person household unit.
(c) Elderly and disabled persons. -- Persons who have attained the age of sixty-five years or who are totally and permanently disabled shall be entitled to two West Virginia personal exemptions for themselves the amounts of which shall be determined as provided in subsection (a) of this section.
§11-21A-15. Resident partners.
(a) General. -- In determining West Virginia adjusted gross income and West Virginia taxable income of a resident partner, any modification described in section eleven-b, eleven-c or eleven-d, which relates to an item of partnership income, gain, loss or deduction shall be made in accordance with the partner's distributive share, for federal income tax purposes, of the items to which the modifications relate. Where a partner's distributive share of any such item is not required to be taken into account separately for federal income tax purposes, the partner's distributive share of such item shall be his or her distributive share for federal income tax purposes of partnership taxable income or loss generally.
(b) Character of items. -- Each item of partnership income, gain, loss, or deduction shall have the same character for a partner under this article as for federal income tax purposes. Where an item is not characterized for federal income tax purposes, it shall have the same character for a partner as if realized directly from the source from which realized by the partnership, or incurred in the same manner as incurred by the partnership.
(c) West Virginia tax avoidance or evasion. -- Where a partner's distributive share of an item of partnership income, gain, loss or deduction is determined for federal income tax purposes by special provision in the partnership agreement with respect to such item, and where the principal purpose of such provision is the avoidance or evasion of tax under this article, the partner's distributive share of such item, and any modification required with respect thereto shall be determined as if the partnership agreement made no special provision with respect to such item.
§11-21A-16. Resident shareholders of S corporations.
(a) S corporation shareholder's modifications. -- In determining West Virginia adjusted gross income and West Virginia taxable income of a resident S corporation shareholder, any modification described in section eleven-b, eleven-c or eleven-d, which relates to an item of income, gain, loss or deduction shall be made in accordance with the S corporation shareholder's pro rata share, for federal income tax purposes, of the items to which the modifications relate. Where a shareholder's pro rata share of any such item is not required to be taken into account separately for federal income tax purposes, the shareholder's pro rata share of such item shall be his or her pro rata share for federal income tax purposes of S corporation taxable income or loss generally.
(b) Character of items. -- Each item of S corporation income, gain, loss or deduction shall have the same character for a shareholder under this article as for federal income tax purposes. Where an item is not characterized for federal income tax purposes, it shall have the same character for a shareholder as if realized directly from the source from which realized by the S corporation, or incurred in the same manner as incurred by the S corporation.
§11-21A-17. West Virginia taxable income of resident estate or trust.

The West Virginia taxable income of a resident estate or trust means its federal taxable income for the taxable year as defined in the laws of the United States and section eight of this article for the taxable year, with the following modifications:
(a) There shall be subtracted six hundred dollars as the West Virginia personal exemption of the estate or trust, and there shall be added the amount of its federal deduction for a personal exemption.
(b) There shall be added or subtracted, as the case may be, the share of the estate or trust in the West Virginia fiduciary adjustment determined under section nineteen of this article.
(c) There shall be added to federal adjusted gross income, unless already included therein, the amount of a lump sum distribution for which the taxpayer has elected under section 402(e) of the Internal Revenue Code of one thousand nine hundred eighty-six, as amended, to be separately taxed for federal income tax purposes.
§11-21A-18. Share of resident estate, trust or beneficiary in West Virginia fiduciary adjustment.

(a) General. -- An adjustment shall be made in determining West Virginia taxable income of a resident estate or trust under section seventeen, or West Virginia adjusted gross income of a resident beneficiary of any estate or trust under subsection (d), section eleven of this article, in the amount of the share of each in the West Virginia fiduciary adjustment as determined in this section.
(b) Definition. -- The West Virginia fiduciary adjustment shall be the net amount of the modifications described in section eleven (b), (c) and (d), which relate to items of income, gain, loss or deduction of an estate or trust. Such net amount shall not include any modification described in subdivision (3), subsection (c), section eleven of this article with respect to gains from the sale or other disposition of property, to the extent such gains are excluded from distributable net income of the estate or trust for federal income tax purposes.
(c) Shares of West Virginia fiduciary adjustment. -
(1) The respective shares of an estate or trust and its beneficiaries (including, solely for the purpose of this allocation, nonresident beneficiaries) in the West Virginia fiduciary adjustment shall be in proportion to their respective shares of distributable net income of the estate or trust for federal income tax purposes.
(2) If the distributable net income for the taxable year of the estate or trust is zero, the share of each beneficiary in the West Virginia fiduciary adjustment shall be in proportion to his or her share of the estate or trust is zero, the share of each beneficiary in the West Virginia fiduciary adjustment shall be in proportion to his or her share of the estate or trust income for such year, under local law or the governing instrument, which is distributed within such year, or is required to be distributed currently. Any balance of the West Virginia fiduciary adjustment shall be allocated to the estate or trust.
(d) Alternate attribution of modifications. -- The Tax Commissioner may, on application, authorize the use of such other methods of determining to whom the items comprising the fiduciary adjustment shall be attributed, as may be appropriate and equitable, on such terms and conditions as he or she may require.
§11-21A-19. Credit for income tax of another State.
(a) General. -- A resident shall be allowed a credit against the tax otherwise due under this article for any income tax imposed for the taxable year by another State of the United States or by the District of Columbia, upon income both derived therefrom and subject to tax under this article.
(b) Limitations. --
(1) The credit under this section shall not exceed the percentage of the tax otherwise due under this article determined by dividing the portion of the taxpayer's West Virginia income subject to taxation by such other jurisdiction by the total amount of the taxpayer's West Virginia income.
(2) The credit under this section shall not reduce the tax otherwise due under this article to an amount less than would have been due if the income subject to taxation by such other jurisdiction were excluded from the taxpayer's West Virginia income.
(c) Exception. -- No credit shall be allowed under this section for tax of a jurisdiction which allows residents of this State a credit against the taxes imposed by such other jurisdiction for the tax under this article, if such other credit is substantially similar to the credit granted by section forty.
(d) Definition. -- For purposes of this section West Virginia income means:
(1) The West Virginia adjusted gross income of an individual; or
(2) The amount of the income of an estate or trust, determined as if the estate or trust were an individual computing his or her West Virginia adjusted gross income under section eleven.
§§11-21A-20 to 11-21A-29. Reserved for future use.
PART III. NONRESIDENT AND PART-YEAR RESIDENTS.

§11-21A-30. Computation of tax on income of nonresidents and part-year residents.

(a) Computation of tax. -- For taxable years beginning after the thirty-first day of December, two thousand five, the tax due under this article on taxable income derived from sources in this State by a nonresident individual, estate, or trust or by a part-year resident individual shall be calculated as provided in this section.
(1) Taxpayer shall first calculate tax liability under this article as if taxpayer, whether an individual, estate or trust, were a resident of this State for the entire taxable year. When determining tentative tax liability under this subdivision, a nonresident shall be allowed the same deductions, exemptions and credits that would be allowable if taxpayer were a resident individual, estate or trust, as the case may be, for the entire taxable year, except that no credit shall be allowed under section nineteen of this article.
(2) The amount of tentative tax determined under subdivision (1) of this subsection shall then be multiplied by a fraction the numerator of which is the taxpayer's West Virginia source income, determined in accordance with Part III of this article for the taxable year, and the denominator of which is such taxpayer's "federal adjusted gross income" for the taxable year as defined in section eight of this article.
(b) Special rules for estates and trusts. -- For purposes of subdivision (1) of subsection (a):
(1) The "federal adjusted gross income" of an estate or trust shall be determined as if such estate or trust were an individual; and
(2) In the case of a trust, "federal adjusted gross income" shall be its "federal adjusted gross income" for the taxable year increased by the amount of any includable gain, reduced by any deductions properly allocable thereto, upon which the tax is imposed for the taxable year pursuant to Section 644 of the Internal Revenue Code.
(c) Special rules for part-year residents. --
(1) For purposes of subdivision (1) of subsection (a), the "federal adjusted gross income" of a part-year resident individual shall be taxpayer's federal adjusted gross income for the taxable year, as defined in section eight of this article, increased or decreased, as the case may be, by the items accrued under subdivision (1), subsection (b), section thirty-eight of this article, to the extent such items are not otherwise included in federal adjusted gross income for the taxable year, and decreased or increased, as the case may be by the items accrued under subdivision (2), subsection (b) of said section thirty-eight, to the extent such items are included in federal adjusted gross income for the taxable year; and
(2) In computing the tax due as if taxpayer were a resident of this State for the entire tax year, West Virginia adjusted gross income shall include the accruals specified in subdivision (1) of this subsection (c), with the applicable modifications described in section thirty-eight of this article.
(d) Definitions. --
(1) "Nonresident estate" means an estate of a decedent who was not a resident of this State at the time of his or her death.
(2) "Nonresident trust" means a trust which is not a resident trust, as defined in section seven.
(3) "Part-year resident individual" means an individual who is not a resident or nonresident of this State for the entire taxable year.
§11-21A-31. West Virginia source income of nonresident individual.

(a) General. -- The West Virginia source income of a nonresident individual shall be the sum of the net amount of income, gain, loss and deduction entering into his or her federal adjusted gross income, as defined in the laws of the United States and section eight of this article, for the taxable year, derived from or connected with West Virginia sources, including:
(1) His or her distributive share of partnership income, gain, loss and deduction, determined under section thirty-two; and
(2) His or her pro rata share of S corporation income, loss and deduction, determined under section thirty-two, increased by reductions for taxes described in paragraphs (2) and (3), subsection (f), Section 1366 of the Internal Revenue Code; and
(3) His or her share of estate or trust income, gain, loss and deduction, determined under section thirty-four of this article.
(b) Income and deductions from West Virginia sources. --
(1) Items of income, gain, loss and deduction derived from or connected with West Virginia sources shall be those items attributable to:
(A) The ownership of any interest in real or tangible personal property in this State; or
(B) A business, trade, profession or occupation carried on in this State; or
(C) In the case of a shareholder of an S corporation, the ownership of shares issued by such corporation, to the extent determined under section thirty-two.
(2) Income from intangible personal property, including annuities, dividends, interest, and gains from the disposition of intangible personal property, shall constitute income derived from West Virginia sources only to the extent that such income is from property employed in a business, trade, profession or occupation carried on in this State.
(3) Deductions with respect to capital losses and net operating losses shall be based solely on income, gain, loss and deduction derived from or connected with West Virginia sources, under regulations of the tax Commissioner, but otherwise shall be determined in the same manner as the corresponding federal deductions.
(4) The deduction allowed by Section 215 of the Internal Revenue Code, relating to alimony, shall not constitute a deduction derived from West Virginia sources.
(c) Income and deductions partly from West Virginia sources. -- If a business, trade, profession or occupation is carried on partly within and partly without this State, as determined under regulations of the Tax Commissioner, the items of income, gain, loss and deduction derived from or connected with West Virginia sources shall be determined by apportionment and allocation under such regulations.
(d) Purchase and sale for own account. -- A nonresident, other than a dealer holding property for sale to customers in the ordinary course of his or her trade or business, shall not be deemed to carry on a business, trade, profession or occupation in this State solely by reason of the purchase and sale of property for his or her own account.
(e) Husband and wife. -- If a husband and wife determine their federal income tax on a joint return but determine their West Virginia income taxes separately, they shall determine their West Virginia source incomes separately as if their federal adjusted gross incomes had been determined separately.
§11-21A-32. Nonresident partners and shareholders of S corporations.

(a) Portion derived from West Virginia sources. --
(1) In determining the West Virginia source income of a nonresident partner of any partnership, there shall be included only the portion derived from or connected with West Virginia sources of such partner's distributive share, for federal income tax purposes, of items of partnership income, gain, loss and deduction, as such portion shall be determined under regulations of the Tax Commissioner consistent with the applicable rules of section thirty-one.
(2) In determining West Virginia source income of a nonresident shareholder of an S corporation, there shall be included only the portion derived from or connected with West Virginia sources of such shareholder's pro rata share of items of S corporation income, gain, loss and deduction entering into the shareholder's federal adjusted gross income, as defined in section eight, increased by reductions for taxes described in paragraphs (2) and (3), subsection (f), Section 1366 of the Internal Revenue Code, as such portion shall be determined under regulations of the Tax Commissioner consistent with the applicable methods and rules for allocation and apportionment under article twenty-eight of this chapter.
(b) Special rules as to West Virginia sources. -- In determining the sources of a nonresident partner's income, no effect shall be given to a provision of the partnership agreement which:
(1) Characterizes payments to the partner as being for services or for the use of capital; or
(2) Allocates to the partner, as income or gain from sources outside West Virginia, a greater proportion of his or her distributive share of partnership income or gain than the ratio of partnership income or gain from sources outside West Virginia to partnership income or gain from all sources, except as authorized in subsection (d); or
(3) Allocates to the partner a greater proportion of a partnership item of loss or deduction connected with West Virginia sources than his or her proportionate share, for federal income tax purposes, of partnership loss or deduction generally, except as authorized in subsection (c).
(c) Alternative methods. -- The Tax Commissioner may, on written application filed on or before the due date of the partner's or S corporation shareholder's return under this article for that taxable year determined without regard to any extension of time for filing, authorize the use of such other method or methods of determining the nonresident partner's portion of partnership items, or the nonresident S corporation shareholder's portion of S corporation items, derived from or connected with West Virginia sources, and the modifications related thereto, as may be appropriate and equitable, on such terms and conditions as the Commissioner may require.
(d) Application of rules for resident partners to nonresident partners and shareholders. --
(1) For a partner's distributive share of items, see subsection (a) of section fifteen.
(2) The character of partnership items for a nonresident partner shall be determined under subsection (b) of section fifteen.
(3) The effect of a special provision in a partnership agreement, other than a provision referred to in subsection (b) of this section, having the principal purpose of avoidance or evasion of tax under this article shall be determined under subsection (c) of section fifteen.
(e) Application of rules for resident S corporation shareholders to nonresident S corporation shareholders. --
(1) For an S corporation shareholder's distributive share of S corporation items, see subsection (a) of section sixteen.
(2) The character of S corporation items for a nonresident shareholder of an S corporation shall be determined under subsection (b) of section sixteen.
§11-21A-33. West Virginia source income of a nonresident estate or trust.

(a) General. -- The West Virginia source income of a nonresident estate or trust shall be determined as follows:
(1) Items in distributable net income. -- There shall be determined its share of income, gain, loss and deduction from West Virginia sources under section thirty-four of this article, relating to items entering into the definition of distributable net income.
(2) Items not in distributable net income. -- There shall be added to or subtracted, as the case may be, the amount derived from or connected with West Virginia sources of any income, gain, loss and deduction which would be included in the determination of federal adjusted gross income if the estate or trust were an individual and which is recognized for federal income tax purposes, but excluded from the definition of federal distributable net income of the estate or trust. The source of such income, gain, loss and deduction shall be determined in accordance with the applicable rules of section thirty-one of this article as in the case of a nonresident individual.
(b) Special West Virginia source rules. -- Deductions with respect to capital losses and net operating losses shall be based solely on income, gains, losses and deductions derived from or connected with West Virginia sources, under regulations of the Tax Commissioner, but otherwise determined in the same manner as the corresponding federal deductions.
§11-21A-34. Share of a nonresident estate, trust or beneficiary in income from West Virginia sources.

(a) General. -- The share of a nonresident estate or trust under paragraph (1) of subsection (a) of section thirty-three, and the share of a nonresident beneficiary of any estate or trust under subsection (a) of section thirty-one of this article, in estate or trust income, gain, loss and deduction from West Virginia sources shall be determined as follows:
(1) Items of distributable net income from West Virginia sources. -- There shall be determined the items of income, gain, loss and deduction, derived from or connected with West Virginia sources, which would be included in the determination of federal adjusted gross income if the estate or trust were an individual and which enter into the definition of federal distributable net income of the estate or trust for the taxable year including such items from another estate or trust of which the first estate or trust is a beneficiary. Such determination of source shall be made in accordance with the applicable rules of section thirty-one of this article as in the case of a nonresident individual.
(2) Allocation among estate or trust beneficiaries. --
(A) The amounts determined under subdivision (1) of subsection (a) shall be allocated among the estate or trust and its beneficiaries (including, solely for the purposes of this allocation, resident beneficiaries) in proportion to their respective shares of federal distributable net income.
(B) The amounts so allocated shall have the same character under this article as for federal income tax purposes. Where an item entering into the computation of such amounts is not characterized for federal income tax purposes, it shall have the same character as if realized directly from the source from which realized by the estate or trust, or incurred in the same manner as incurred by the estate or trust.
(b) Alternative methods of determining shares. --
(1) If the estate or trust has no federal distributable net income for the taxable year, the share of each beneficiary, including, solely for the purposes of this allocation, resident beneficiaries, in the net amount determined under subdivision (1) of subsection (a) shall be in proportion to the beneficiary's share of the estate or trust income for such year, under local law or the governing instrument, which is required to be distributed currently and any such other amounts of such income distributed in such year. Any balance of such net amounts shall be allocated to the estate or trust.
(2) The Tax Commissioner may, on written application filed on or before the due date of the return due under this article for the taxable year from the estate or trust determined without regard to any extension of time for filing such return, authorize use of such other methods of determining the representative shares of the beneficiaries and of the estate or trust in its income derived from West Virginia sources, and the modifications related thereto, as may be appropriate and equitable, on such terms and conditions as the Commissioner may require.
(3) The Tax Commissioner may by regulation establish such other method or methods of determining the respective shares of the beneficiaries and of the estate or trust in its income derived from West Virginia sources as may be appropriate and equitable. Such method may be used by the fiduciary in his or her discretion whenever the allocation of such respective shares under subsection (a) or subdivision (1) of subsection (b) would result in an inequity which is substantial in amount.
§11-21A-35. Credit for income tax of State of residence.
(a) General. -- A nonresident shall be allowed a credit against the tax otherwise due under this article for any income tax imposed for the taxable year by another State of the United States or by the District of Columbia, of which the taxpayer is a resident.
(b) Limitation. -- The credit under this section shall not exceed either:
(1) The percentage of the other tax determined by dividing the portion of the taxpayer's West Virginia income which is also subject to the other tax by the total amount of his or her income subject to such other tax; or
(2) The percentage of the tax otherwise due under this article, determined by dividing the portion of the taxpayer's West Virginia income which is also subject to the other tax by the total amount of the taxpayer's West Virginia income.
(c) Exceptions. -- No credit may be allowed under this section for a taxable year beginning after the thirty-first day of December, two thousand four, except pursuant to a written agreement between this State and the nonresident individual's State of residence. The State Tax Commissioner is hereby authorized to enter into such agreements necessary to effectuate the purpose of this section when he or she determines that such agreements are in the best interest of this State and its residents.
(d) Definition. -- For purposes of this section West Virginia income means:
(1) The West Virginia adjusted gross income of an individual; or
(2) The income derived from West Virginia sources by an estate or trust, determined in accordance with the applicable rules of section thirty-one as in the case of a nonresident individual.
§11-21A-36. Special case in which a nonresident need not file a West Virginia income tax return.

A nonresident individual, who at no time during the taxable year was a resident of this State, is hereby relieved of filing an income tax return to this State for that taxable year if:
(1) His or her only income from sources within this State was from salaries, wages or compensation for personal services performed within this State;
(2) The salaries, wages or compensation for personal services were subject to income taxation by the State of his or her residence under a net income tax law substantially similar in principle to this article;
(3) The laws of the other State contain a provision substantially similar in effect to that contained in section thirty-five of this article and applicable to residents of this State; and
(4) The laws of the other State afford like treatment to a resident of this State who earned salaries, wages or compensation for personal services in the other State.
§11-21A-37. Military incentive tax credit.
Every employer entitled to receive a tax credit against his or her West Virginia personal income tax liability as provided in article two-c, chapter twenty-one-a of this code shall receive the credit for the period and in the amount specified in said article two-c. The State Tax Commissioner shall provide by appropriate rule for the reporting, filing and application of claims of the tax credit provided in a manner in conformity with the legislative purpose as declared in section two, article two-c, chapter twenty-one-a of this code.
§11-21A-38. West Virginia source income of part-year resident individuals.

(a) Individuals. -- The West Virginia source income of a part-year resident individual shall be the sum of the following:
(1) Federal adjusted gross income for the period of residence, computed as if his or her taxable year for federal income tax purposes were limited to the period of residence;
(2) West Virginia source income for the period of nonresidence determined in accordance with section thirty-one of this article as if his or her taxable year for federal income tax purposes were limited to the period of nonresidence; and
(3) The special accruals required by subsection (b) of this section.
(b) Special accruals. --
(1) If an individual changes his or her status from resident to nonresident he or she shall, regardless of his or her method of accounting, accrue to the portion of the taxable year prior to such change in status any items of income, gain, loss or deduction accruing prior to the change of status, if not otherwise properly entering into his or her federal adjusted gross income for such portion of the taxable year or a prior taxable year under his or her method of accounting.
(2) If an individual changes his or her status from nonresident to resident, he or she shall, regardless of his or her method of accounting, accrue to the portion of the taxable year prior to such change of status any items of income, gain, loss or deduction accruing prior to the change of status, other than items derived from or connected with West Virginia sources, if not otherwise properly entering into his or her federal adjusted gross income for such portion of the taxable year or for a prior taxable year under his or her method of accounting.
(3) No item of income, gain, loss or deduction which is accrued under this subsection shall be taken into account in determining West Virginia adjusted gross income or West Virginia source income for any subsequent period.
(4) The accruals under this subsection shall not be required if the individual files with the Tax Commissioner a bond or other security acceptable to the Tax Commissioner, conditioned upon the inclusion of amounts accruable under this subsection in West Virginia adjusted gross income or West Virginia source income for one or more subsequent taxable years as if the individual had not changed his or her resident status.
§§11-21A-39 to 11-21A-50 Reserved for future use.
PART IV. RETURNS, DECLARATIONS AND PAYMENT OF tax.

§11-21A-51. Returns and liabilities.

(a) General. -- On or before the fifteenth day of the fourth month following the close of a taxable year, an income tax return under this article shall be made and filed by or for:
(1) Every resident individual required to file a federal income tax return for the taxable year, or having West Virginia adjusted gross income for the taxable year, determined under section eleven of this article in excess of the sum of his or her West Virginia personal exemptions: Provided, That the Tax Commissioner shall by legislative rule specify circumstances when an individual is not required to file a return;
(2) Every resident estate or trust required to file a federal income tax return for the taxable year, or having any West Virginia taxable income for the taxable year, determined under section seventeen of this article;
(3) Every nonresident individual having any West Virginia adjusted gross income for the taxable year, determined under section thirty-one of this article, in excess of the sum of his or her West Virginia personal exemptions, except when all of such nonresident individual's West Virginia source income is taxed on a composite return filed under this article for the taxable year; and
(4) Every nonresident estate or trust having items of income or gain derived from West Virginia sources, determined in accordance with the applicable rules of section thirty-one of this article as in the case of a nonresident individual, in excess of its West Virginia exemption.
(b) Husband and wife. --
(1) If the federal income tax liability of husband or wife is determined on a separate federal income tax return, their West Virginia income tax liabilities and returns shall be separate.
(2) If the federal income tax liabilities of husband and wife other than a husband and wife described in subdivision (3) of this subsection are determined on a joint federal return, or if neither files a federal return:
(A) They shall file a joint West Virginia income tax return, and their tax liabilities shall be joint and several; or
(B) They may elect to file separate West Virginia income tax returns on a single or separate form, as may be required by the Tax Commissioner, if they comply with the requirements of the Tax Commissioner in setting forth information, and in such event their tax liabilities shall be separate.
(3) If either husband or wife is a resident and the other is a nonresident, they shall file separate West Virginia income tax returns on such single or separate forms as may be required by the Tax Commissioner, and in such event their tax liabilities shall be separate.
(c) Decedents. -- The return of any deceased individual shall be made and filed by his or her executor, administrator or other person charged with his or her property.
(d) Individuals under a disability. -- The return for an individual who is unable to make a return by reason of minority or other disability shall be made and filed by his or her guardian, committee, fiduciary or other person charged with the care of his or her person or property (other than a receiver in possession of only a part of his or her property), by his or her duly authorized agent.
(e) ESTATES and trusts. -- The return for an estate or trust shall be made and filed by the fiduciary.
(f) Joint fiduciaries. -- If two or more fiduciaries are acting jointly, the return may be made by any one of them.
(g) Tax a debt. -- Any tax under this article, and any increase, interest or penalty thereon, shall, from the time it is due and payable, be a personal debt of the person liable to pay the same, to the State of West Virginia.
(h) Cross reference. -- For provisions as to information returns by partnerships, S corporations, employers and other persons, see section fifty-two of this article.
§11-21A-52. Composite returns.
(a) Nonresident individuals who are required by this article to file a return and who are:
(1) Partners in a partnership deriving income from a West Virginia source or sources; or
(2) Shareholders of a corporation having income from a West Virginia source or sources and which made an election under Section 1362(a) of the Internal Revenue Code (S corporations) for the taxable year; or
(3) Beneficiaries who received a distribution (actual or deemed) from an estate or trust having income from a West Virginia source or sources, may, upon payment of a composite return processing fee of fifty dollars, file a composite return in accordance with the provisions of this section.
(b) In filing a composite return and determining the tax due thereon, no personal exemptions may be utilized, and the rate of tax shall be six and one-half percent. The entity or entities, to which the composite return relates are responsible for collection and remittance of all income tax due at the time the return is filed.
(c) The composite return shall be filed in a manner and form acceptable to and in accordance with instructions from the Commissioner, and need not be signed by all nonresident individuals on whose behalf the return is filed: Provided, That the return is signed by a partner, in the case of a partnership, a corporate officer, in the case of a corporation, by a trustee, in the case of a trust or by an executor or administrator in the case of an estate.
(d) For the purposes of this section, a composite return means a return filed on a group basis as though there was one taxpayer, and sets forth the name, address, taxpayer identification number and percent ownership or interest of each nonresident individual who consents to be included in the composite return in addition to return information as that term is defined in section five-d, article ten of this chapter; the term includes block filing: Provided, That nothing in this section shall prohibit a nonresident from also filing a separate nonresident personal income tax return for the taxable year and a separate return shall be filed if the nonresident has income from any other West Virginia source. If a separate return is also filed for the taxable year, the nonresident shall be allowed credit for his or her share of the tax remitted with the composite return for that taxable year.
§11-21A-53. Time and place for filing returns and paying tax.
A person required to make and file a return under this article shall, without assessment, notice or demand, pay any tax due thereon to the Tax Commissioner on or before the date fixed for filing such return (determined without regard to any extension of time for filing the return). The Tax Commissioner shall prescribe by regulation the place for filing any return, declaration, Statement or other document required pursuant to this article and for payment of any tax.
§11-21A-54. Signing of returns and other documents.
(a) General. -- Any return, declaration, Statement or other document required to be made pursuant to this article shall be signed in accordance with regulations or instructions prescribed by the Tax Commissioner. The fact that an individual's name is signed to a return, declaration, Statement or other document shall be prima facie evidence for all purposes that the return, declaration, Statement or other document was actually signed by him or her.
(b) Partnerships. -- Any return, Statement or other document required of a partnership shall be signed by one or more partners. The fact that a partner's name is signed to a return, Statement or other document shall be prima facie evidence for all purposes that such partner is authorized to sign on behalf of the partnership.
(c) Certifications. -- The making or filing of any return, declaration, Statement or other document or copy thereof required to be made or filed pursuant to this article, including a copy of a federal return, shall constitute a certification by the person making or filing such return, declaration, Statement or other document or copy thereof that the Statements contained therein are true and that any copy filed is a true copy.
§11-21A-55. Declarations of estimated tax.
(a) Requirement of declaration. -- Every resident and nonresident individual shall make a declaration of his or her estimated tax for the taxable year, containing such information as the Tax Commissioner may prescribe by regulations or instructions, if his or her West Virginia adjusted gross income, other than from wages on which tax is withheld under this article, can reasonably be expected to exceed four hundred dollars plus the sum of the West Virginia personal exemptions to which he or she is entitled.
(b) Definition of estimated tax. -- The term "estimated tax" means the amount which an individual estimates to be his or her income tax under this article for the taxable year, less the amount which he or she estimates to be the sum of any credits allowable against the tax.
(c) Joint declaration of husband and wife. -- A husband and wife may make a joint declaration of estimated tax as if they were one taxpayer, in which case the liability with respect to the estimated tax shall be joint and several. No joint declaration may be made if husband and wife are separated under a decree of divorce or of separate maintenance, or if they have different taxable years. If a joint declaration is made but husband and wife elect to determine their taxes under this article separately, the estimated tax for such year may be treated as the estimated tax of either husband or wife, or may be divided between them, as they may elect.
(d) Time for filing declaration. -- A declaration of estimated tax of an individual other than a farmer shall be filed on or before the fifteenth day of April of the taxable year, except that if the requirements of subsection (a) are first met:
(1) After the first day of April and before the second day of June of the taxable year, the declaration shall be filed on or before the fifteenth day of June; or
(2) After the first day of June and before the second day of September of the taxable year, the declaration shall be filed on or before the fifteenth day of September; or
(3) After the first day of September of the taxable year, the declaration shall be filed on or before the fifteenth day of January of the succeeding year.
(e) Declaration of estimated tax by a farmer. -- A declaration of estimated tax of an individual having an estimated West Virginia adjusted gross income from farming for the taxable year which is at least two thirds of his or her total estimated West Virginia adjusted gross income for the taxable year may be filed at any time on or before the fifteenth day of January of the succeeding year, in lieu of the time otherwise prescribed.
(f) Declaration of estimated tax of forty dollars or less. -- A declaration of estimated tax of an individual having a total estimated tax for the taxable year of forty dollars or less may be filed at any time on or before the fifteenth day of January of the succeeding year under regulations of the Tax Commissioner.
(g) Amendments of declaration. -- An individual may amend a declaration under regulations of the Tax Commissioner.
(h) Return as declaration or amendment. -- If on or before the fifteenth day of February of the succeeding taxable year an individual other than a farmer files his or her return for the taxable year for which the declaration is required, and pays therewith the full amount of the tax shown to be due on the return:
(1) Such return shall be considered as his or her declaration, if no declaration was required to be filed during the taxable year, but is otherwise required to be filed on or before the fifteenth day of January.
(2) Such return, if filed on or before the fifteenth day of January, shall be considered an amendment permitted by subsection (g) if the tax shown on the return is greater than the estimated tax shown in a declaration previously made.
(i) Fiscal year. -- This section shall apply to a taxable year other than a calendar year by the substitution of the months of such fiscal year for the corresponding months specified in this section.
(j) Short taxable year. -- An individual having a taxable year of less than twelve months shall make a declaration in accordance with regulations of the Tax Commissioner.
(k) Declaration for individual under a disability. -- The declaration of estimated tax for an individual who is unable to make a declaration by reason of minority or other disability shall be made and filed by his or her guardian, committee, fiduciary or other person charged with the care of his or her person or property (other than a receiver in possession of only a part of his or her property), or by his or her duly authorized agent.
(l) Return of farmer as declaration of estimated tax. -- If on or before the first day of March of the succeeding taxable year an individual who is a farmer files his or her return for the taxable year for which the declaration is required, and pays therewith the full amount of the tax shown to be due on the return, such return shall be considered as his or her declaration, if no declaration was required to be filed during the taxable year, but is otherwise required to be filed on or before the fifteenth day of January.
§11-21A-56. Payments of estimated tax.
(a) General. -- The estimated tax with respect to which a declaration is required shall be paid as follows:
(1) If the declaration is filed on or before the fifteenth day of April of the taxable year, the estimated tax shall be paid in four equal installments. The first installment shall be paid at the time of the filing of the declaration, and the second, third and fourth installments shall be paid on the following fifteenth day of June, fifteenth day of September, and fifteenth day of January, respectively.
(2) If the declaration is filed after the fifteenth day of April and not after the fifteenth day of June of the taxable year, and is not required to be filed on or before the fifteenth day of April of the taxable year, the estimated tax shall be paid in three equal installments. The first installment shall be paid at the time of the filing of the declaration, and the second and third installments shall be paid on the following fifteenth day of September and fifteenth day of January, respectively.
(3) If the declaration is filed after the fifteenth day of June and not after the fifteenth day of September of the taxable year, and is not required to be filed on or before the fifteenth day of June of the taxable year, the estimated tax shall be paid in two equal installments. The first installment shall be paid at the time of the filing of the declaration, and the second shall be paid on the following fifteenth day of January.
(4) If the declaration is filed after the fifteenth day of September of the taxable year, and is not required to be filed on or before the fifteenth day of September of the taxable year, the estimated tax shall be paid in full at the time of the filing of the declaration.
(5) If the declaration is filed after the time prescribed therefor, or after the expiration of any extension of time therefor, paragraphs (2), (3) and (4) of this subsection shall not apply, and there shall be paid at the time of such filing all installments of estimated tax payable at or before such time, and the remaining installments shall be paid at the times at which, and in the amounts in which, they would have been payable if the declaration had been filed when due.
(b) Farmers. -- If an individual referred to in subsection (e), section fifty-five of this article (relating to income from farming) makes a declaration of estimated tax after the fifteenth day of September of the taxable year and on or before the following fifteenth day of January, the estimated tax shall be paid in full at the time of the filing of the declaration.
(c) Amendments of declaration. -- If any amendment of a declaration is filed, the remaining installments, if any, shall be rateably increased or decreased (as the case may be) to reflect any increase or decrease in the estimated tax by reason of such amendment, and if any amendment is made after the fifteenth day of September of the taxable year, any increase in the estimated tax by reason thereof shall be paid at the time of making such amendment.
(d) Application to short taxable year. -- This section shall apply to a taxable year of less than twelve months in accordance with regulations of the Tax Commissioner.
(e) Fiscal year. -- This section shall apply to a taxable year other than a calendar year by the substitution of the months of such fiscal year for the corresponding months specified in this section.
(f) Installments paid in advance. -- An individual may elect to pay any installment of his or her estimated tax prior to the date prescribed for its payment.
§11-21A-57. Extensions of time.
(a) General. -- The Tax Commissioner may grant a reasonable extension of time for payment of tax or estimated tax (or any installment), or for filing any return, declaration, Statement or other document required pursuant to this article, on such terms and conditions as he or she may require. Except for a taxpayer who is outside the United States, no such extension shall exceed six months.
(b) Amount determined as deficiency. -- The Tax Commissioner may, under regulations, extend the time for payment of an amount determined as a deficiency for a period not to exceed eighteen months from the date designated for payment of the deficiency, and under exceptional circumstances, for a further period not to exceed twelve months. An extension under this subsection may be granted only where it is established to the satisfaction of the Tax Commissioner that the payment of a deficiency upon the date designated for payment would result in undue hardship. No extension shall be granted if any part of the deficiency is due to intentional disregard of rules or to fraud.
(c) Claims in bankruptcy or receivership proceedings. -- Extension of time for payment of any portion of a claim for tax allowed in bankruptcy, receivership or similar proceedings, which is unpaid, may be granted subject to the same provisions and limitations as in the case of a deficiency in such tax.
(d) Furnishing of security. -- If any extension of time is granted for payment of any tax or deficiency, the Tax Commissioner may require the taxpayer to furnish a bond or other security in an amount not exceeding twice the amount for which the extension of time for payment is granted on such terms and conditions as the Tax Commissioner may require.
§11-21A-58. Requirements concerning returns, notices, records and Statement.

(a) General. -- The Tax Commissioner may prescribe regulations as to the keeping of records, the content and form of returns and Statements, and the filing of copies of federal income tax returns and determinations. The Tax Commissioner may require any person, by regulation or notice served upon such person, to make such returns, render such Statements, or keep such records, as the Tax Commissioner may deem sufficient to show whether or not such person is liable under this article for tax or for collection of tax.
(b) Partnerships and S corporations. -- Every partnership and S Corporation having a resident partner shareholder or having any income derived from West Virginia sources, determined in accordance with the applicable rules of section thirty-one as in the case of a nonresident individual, shall make a return for the taxable year setting forth all items of income, gain, loss and deduction and such other pertinent information as the Tax Commissioner may by regulations and instructions prescribe.
(c) Information at source. -- The Tax Commissioner may prescribe regulations and instructions requiring returns of information to be made and filed on or before the twenty-eighth day of February of each year as to the payment or crediting in any calendar year of amounts of six hundred dollars or more to any taxpayer under this article. Such returns may be required of any person, including lessees or mortgagors of real or personal property, fiduciaries, employers, and all officers and employees of this State, or of any municipal corporation or political subdivision of this State, having the control, receipt, custody, disposal or payment of interest, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments or other fixed or determinable gains, profits or income, except interest coupons payable to bearer. A duplicate of the Statement as to tax withheld on wages, required to be furnished by an employer to an employee, shall constitute the return of information required to be made under this section with respect to such wages.
(d) Notice of qualification as receiver, etc. -- Every receiver, trustee in bankruptcy, assignee for benefit of creditors, or other like fiduciary shall give notice of his or her qualification as such to the Tax Commissioner, as may be required by regulation.
§11-21A-59. Report of change in federal taxable income.
If the amount of a taxpayer's federal taxable income reported on his or her federal income tax return for any taxable year is changed or corrected by the United States Internal Revenue Service or other competent authority, or as the result of a renegotiation of a contract or subcontract with the United States, the taxpayer shall report such change or correction in federal taxable income within ninety days after the final determination of such change, correction, or renegotiation, or as otherwise required by the Tax Commissioner, and shall concede the accuracy of such determination or state wherein it is erroneous. Any taxpayer filing an amended federal income tax return shall also file within ninety days thereafter an amended return under this article, and shall give such information as the Tax Commissioner may require. The Tax Commissioner may by regulation prescribe such exceptions to the requirements of this section as he or she deems appropriate.
§11-21A-60. Change of election.
Any election expressly authorized by this article may be changed on such terms and conditions as the Tax Commissioner may prescribe by regulation.
§11-21A-61. Income taxes of members of armed forces on death.
(a) General rule. -- In the case of any individual who dies while in active service as a member of the armed forces of the United States, if such death occurred while serving in a combat zone (as determined under Section 112 of the Internal Revenue Code of 1986) or as a result of wounds, disease or injury incurred while so serving:
(1) Any tax imposed by this article shall not apply with respect to the taxable year in which falls the date of his or her death, or with respect to any prior taxable year ending on or after the first day he or she served in a combat zone after the first day of August, one thousand nine hundred ninety; and
(2) Any tax under this article for taxable years preceding those specified in subdivision (1) of this subsection, which is unpaid at the date of his or her death (including interest, additions to tax and additional amounts) shall not be assessed and if assessed the assessment shall be abated and if the assessment has been collected, the amount collected shall be credited or refunded as an overpayment.
(b) Individuals in missing status. -- For purposes of this section, in the case of an individual who was in a missing status within the meaning of Section 6013(f)(3)(A) of the Internal Revenue Code of 1986, the date of such individual's death shall be treated as being not earlier than the date on which a determination of such individual's death is made under Section 556, Title 37 of the United States Code. Subdivision (1), subsection (a) of this section shall not apply for any taxable year beginning more than two years after the date designated under Section 112 of the Internal Revenue Code as the date of termination of combatant activities in a combat zone.
(c) Certain military or civilian employees of the United States dying as a result of injuries sustained overseas.
(1) In general. -- In the case of any individual who dies while a military or civilian employee of the United States, if such death occurs as a result of wounds or injury which were incurred while the individual was a military or civilian employee of the United States and which were incurred outside the United States in a terroristic or military action, any tax imposed by this article shall not apply:
(A) With respect to the taxable year in which falls the date of such individual's death; and
(B) With respect to any prior taxable year in the period beginning with the last taxable year ending before the taxable year in which the wounds or injury were incurred.
(2) Terroristic or military action. -- For purposes of paragraph (1), the term "terroristic or military action" means any action which is terroristic or military action for purposes of Section 692 of the Internal Revenue Code of 1986.
§§11-21A-62 to 11-21A-70. Reserved for future use.
PART V. WITHHOLDING OF tax.

§11-21A-71. Requirement of withholding tax from wages
.
(a) General. -- Every employer maintaining an office or transacting business within this State and making payment of any wage taxable under this article to a resident or nonresident individual shall deduct and withhold from such wages for each payroll period a tax computed in such manner as to result, so far as practicable, in withholding from the employee's wages during each calendar year an amount substantially equivalent to the tax reasonably estimated to be due under this article resulting from the inclusion in the employee's West Virginia adjusted gross income of wages received during such calendar year. The method of determining the amount to be withheld shall be prescribed by the Tax Commissioner, with due regard to the West Virginia withholding exemption of the employee and asserted in good faith by the employee. This section shall not apply to payments by the United States for service in the armed forces of the United States: Provided, That the Tax Commissioner may execute an agreement with the secretary of the treasury, as provided in 5 U.S.C. §5517, for the mandatory withholding of tax under this section on pay to members of the national guard while participating in exercises or performing duty under 32 U.S.C. §502, and on pay to members of the ready reserve while participating in scheduled drills or training periods or serving on active duty for training under 10 U.S.C. §270(a) [repealed].
(b) Withholding exemptions. -- For purposes of this section:
(1) An employee shall be entitled to the same number of West Virginia withholding exemptions as the number of withholding exemptions to which he or she is entitled for federal income tax withholding purposes. An employer may rely upon the number of federal withholding exemptions claimed by the employee, except where the employee claims a higher number of West Virginia withholding exemptions.
(2) With respect to any taxable year beginning after the thirty-first day of December, two thousand five, the amount of each West Virginia exemption shall be the greater of two thousand dollars or the taxpayer's West Virginia personal exemption amount for the next preceding tax year whether the individual is a resident or nonresident.
(c) Exception for certain nonresidents. -- If the income tax law of another State of the United States or of the District of Columbia results in its residents being allowed a credit under section thirty-five sufficient to offset all taxes required by this article to be withheld from wages of an employee, the Tax Commissioner may by regulation relieve the employers of such employees from withholding requirements of this article with respect to such employees.
§11-21A-72. Withholding tax on West Virginia source income of nonresident partners, nonresident S corporation shareholders, and nonresident beneficiaries of estates and trusts.

(a) General rule. -- For the privilege of doing business in this State or deriving rents or royalties from real or tangible personal property located in this State, including, but not limited to, natural resources in place and standing timber, a partnership, S corporation, estate or trust, which is treated as a pass-through entity for federal income tax purposes and which has taxable income for the taxable year derived from or connected with West Virginia sources any portion of which is allocable to a nonresident partner, nonresident shareholder, or nonresident beneficiary, as the case may be, shall pay a withholding tax under this section, except as provided in subsections (c) and (k) of this section.
(b) Amount of withholding tax. --
(1) In general. -- The amount of withholding tax payable by any partnership, S corporation, estate or trust, under subsection (a) shall be equal to four percent of the effectively connected taxable income of the partnership, S corporation, estate or trust, as the case may be, which may lawfully be taxed by this State and which is allocable to a nonresident partner, nonresident shareholder, or nonresident beneficiary of a trust or estate.
(2) Credits against tax. -- When determining the amount of withholding tax due under this section, the pass-through entity may apply any tax credits allowable under this chapter to the pass-through entity which pass through to the nonresident distributees: Provided, That in no event may the application of any credit or credits reduce the tax liability of the distributee under this article to less than zero.
(c) When withholding is not required. -- Withholding shall not be required:
(1) On distribution to a person, other than a corporation, who is exempt from the tax imposed by this article. For purposes of this subdivision (1), a person is exempt from the tax imposed by this article only if such person is, by reason of such person's purpose or activities, exempt from paying federal income taxes on such person's West Virginia source income. The pass-through entity may rely on the written Statement of the person claiming to be exempt from the tax imposed by this article provided the pass-through entity discloses the name and federal taxpayer identification number for all such persons in its return for the taxable year filed under this article or article twenty-eight of this chapter; or
(2) On distributions to a corporation which is exempt from the tax imposed by article twenty-eight of this chapter. For purposes of this subdivision (2), a corporation is exempt from the tax imposed by article twenty-eight of this chapter only if the corporation, by reason of its purpose or activities is exempt from paying federal income taxes on the corporation's West Virginia source income. The pass-through entity may rely on the written Statement of the person claiming to be exempt from the tax imposed by article twenty-eight of this chapter provided the pass-through entity discloses the name and federal taxpayer identification number for all such corporations in its return for the taxable year filed under this article or article twenty-eight of this chapter; or
(3) On distributions when compliance will cause undue hardship on the pass-through entity: Provided, That no pass-through entity shall be exempt under subdivision (3) from complying with the withholding requirements of this section unless the Tax Commissioner, in his or her discretion, approves in writing the pass-through entity's written petition for exemption from the withholding requirements of this section based on undue hardship. The Tax Commissioner may prescribe the form and contents of such a petition and specify standards for when a pass-through entity will not be required to comply with the withholding requirements of this section due to undue hardship. Such standards shall take into account (among other relevant factors) the ability of a pass-through entity to comply at reasonable cost with the withholding requirements of this section and the cost to this State of collecting the tax directly from a nonresident distributee who does not voluntarily file a return and pay the amount of tax due under this article with respect to such distributions; or
(4) On distributions by nonpartnership ventures. An unincorporated organization that has elected, under Section 761 of the Internal Revenue Code, to not be treated as a partnership for federal income tax, is not treated as a partnership under this article and is not required to withhold under this section. However, such unincorporated organizations shall make and file with the Tax Commissioner a true and accurate return of information under subsection (c), section fifty-eight of this article, under such regulations and in such form and manner as the Tax Commissioner may prescribe, setting forth: (A) The amount of fixed or determinable gains, profits and income; (B) the name, address and taxpayer identification number of persons receiving fixed or determinable gains, profits or income from the nonpartnership venture.
(d) Payment of withheld tax. --
(1) General rule. -- Each partnership, S corporation, estate or trust, required to withhold tax under this section shall pay the amount required to be withheld to the Tax Commissioner no later than:
(A) S corporations. -- The fifteenth day of the third month following the close of the taxable year of the S corporation unless paragraph (C) of this subdivision applies.
(B) Partnerships, estates and trusts. -- The fifteenth day of the fourth month following the close of the taxable year of the partnership, estate or trust, with the annual return of the partnership, estate or trust due under this article, unless paragraph (C) of this subdivision applies.
(C) Composite returns. -- The fifteenth day of the fourth month of the taxable year with the composite return filed under section fifty-two of this article.
(2) Special rules. --
(A) Where there is extension of time to file return. -- An extension of time for filing the returns referenced in subdivision (1) of this subsection does not extend the time for paying the amount withholding tax due under this section. In this situation, the pass-through entity shall pay, by the date specified in subdivision (1) of this subsection, at least ninety percent of the withholding tax due for the taxable year, or one hundred percent of the tax paid under this section for the prior taxable year, if such taxable year was a taxable year of twelve months and tax was paid under this section for that taxable year. The remaining portion of the tax due under this section, if any, shall be paid at the time the pass-through entity files the return specified in subdivision (1) of this subsection. If the balance due is paid by the last day of the extension period for filing such return and the amount of tax due with such return is ten percent or less of the tax due under this section for the taxable year, no additions to tax shall be imposed under article ten of this chapter with respect to balance so remitted. If the amount of withholding tax due under this section for the taxable year is less than the estimated withholding taxes paid for the taxable year by the pass-through entity, the excess shall be refunded to the pass-through entity or, at its election, established as a credit against withholding tax due under this section for the then current taxable year.
(B) Deposit in trust for Tax Commissioner. -- The Tax Commissioner may, if the Commissioner believes such action is necessary for the protection of trust fund moneys due this State, require any pass-through entity to pay over to the Tax Commissioner the tax deducted and withheld under this section, at any earlier time or times.
(e) Effectively connected taxable income. -- For purposes of this section, the term "effectively connected taxable income" means the taxable income or portion thereof of a partnership, S corporation, estate or trust, as the case may be, which is derived from or attributable to West Virginia sources as determined under section thirty-one of this article and such regulations as the Tax Commissioner may prescribe, whether such amount is actually distributed or is deemed to have been distributed for federal income tax purposes.
(f) Treatment of nonresident partners, S corporation shareholders or beneficiaries of a trust or estate. --
(1) Allowance of credit. -- Each nonresident partner, nonresident shareholder, or nonresident beneficiary, shall be allowed a credit for such partner's or shareholder's or beneficiary's share of the tax withheld by the partnership, S corporation, estate, or trust, under this section: Provided, That when the distribution is to a corporation taxable under article twenty-eight of this chapter, the credit allowed by this section shall be applied against the distributee corporation's liability for tax under article twenty-eight of this chapter.
(2) Credit treated as distributed to partner, shareholder or beneficiary. -- Except as provided in regulations, a nonresident partner's share a nonresident shareholder's share or a nonresident beneficiary's share, of any withholding tax paid by the partnership, S corporation, estate or trust, under this section shall be treated as distributed to such partner by such partnership, or to such shareholder by such S corporation, or to such beneficiary by such estate or trust, on the earlier of:
(A) The day on which such tax was paid to the Tax Commissioner by the partnership, S corporation, estate or trust; or
(B) The last day of the taxable year for which such tax was paid by the partnership, S corporation, estate or trust.
(g) Regulations. -- The Tax Commissioner shall prescribe such regulations as may be necessary to carry out the purposes of this section.
(h) Information Statement.
(1) Every person required to deduct and withhold tax under this section shall furnish to each nonresident partner, or nonresident shareholder, or nonresident beneficiary, as the case may be, a written Statement, as prescribed by the Tax Commissioner, showing the amount of West Virginia effectively connected taxable income, whether distributed or not distributed for federal income tax purposes by such partnership, S corporation, estate or trust, to such nonresident partner, or nonresident shareholder, or nonresident beneficiary, the amount deducted and withheld as tax under this section; and such other information as the Tax Commissioner may require.
(2) A copy of the information Statements required by this subsection must be filed with the West Virginia return filed under this article (or article twenty-eight of this chapter in the case of S corporations) by the pass-through entity for its taxable year to which the distribution relates. This information Statement must be furnished to each nonresident distributee on or before the due date of the pass-through entity's return under this article or article twenty-eight of this chapter for the taxable year, including extensions of time for filing such return, or such later date as may be allowed by the Tax Commissioner.
(i) Liability for withheld tax. -- Every person required to deduct and withhold tax under this section is hereby made liable for the payment of the tax due under this section, except as otherwise provided in this section. The amount of tax required to be withheld and paid over to the Tax Commissioner shall be considered the tax of the partnership, estate, or trust, as the case may be, for purposes of articles nine and ten of this chapter. Any amount of tax withheld under this section shall be held in trust for the Tax Commissioner. No partner, S corporation shareholder or beneficiary of a trust or estate, shall have a right of action against the partnership, S corporation, estate or trust, in respect to any moneys withheld from such person's distributive share and paid over to the Tax Commissioner in compliance with or in intended compliance with this section.
(j) Failure to withhold. -- If any partnership, S corporation, estate, or trust, fails to deduct and withhold tax as required by this section, and thereafter the tax against which such tax may be credited is paid, the tax so required to be deducted and withheld under this section shall not be collected from the partnership, S corporation, estate or trust, as the case may be, but the partnership, S corporation, estate or trust, shall not be relieved from liability for any penalties or interest on additions to tax otherwise applicable in respect of such failure to withhold.
(k) Distributee agreements. --
(1) The Tax Commissioner shall permit a nonresident distributee to file with a pass-through entity, on a form prescribed by the Tax Commissioner, the agreement of such nonresident distributee:
(A) To timely file returns and make timely payment of all taxes imposed by this article, on the distributee with respect to the effectively connected taxable income of the pass-through entity; and
(B) To be subject to personal jurisdiction in this State for purposes of the collection of any unpaid income tax under this article (or article twenty-eight of this chapter), together with related interest, penalties, additional amounts and additions to tax, owed by the nonresident distributee.
(2) A nonresident distributee electing to execute an agreement under this subsection must file a complete and properly executed agreement with each pass-through entity for which this election is made, on or before the last day of the first taxable year of the pass-through entity in respect of which the agreement applies. The pass-through entity shall file a copy of that agreement with the Tax Commissioner as provided in subdivision (5) of this subsection.
(3) After an agreement is filed with the pass-through entity, that agreement may be revoked by a distributee only in accordance with regulations promulgated by the Tax Commissioner.
(4) Upon receipt of such an agreement properly executed by the nonresident distributee, the pass-through entity shall not withhold tax under this section for the taxable year of the pass-through entity in which the agreement is received by the pass-through entity and for any taxable year subsequent thereto until either the nonresident distributee notifies the pass-through entity, in writing, to begin withholding tax under this section or the Tax Commissioner directs the pass-through entity, in writing, to begin withholding tax under this section because of the distributee's continuing failure to comply with the terms of such agreement.
(5) The pass-through entity shall file with the Tax Commissioner a copy of all distributee agreements received by the pass-through entity during any taxable year with this annual information return filed under this article, or article twenty-four of this chapter in the case of S corporations. If the pass-through entity fails to timely file with the Tax Commissioner a copy of an agreement executed by a distributee and furnished to the pass-through entity in accordance with this section, then the pass-through entity shall remit to the Tax Commissioner an amount equal to the amount that should have been withheld under this section from the nonresident distributee. The pass-through entity may recover payment made pursuant to the preceding sentence from the distributee on whose behalf the payment was made.
(l) Definitions. -- For purposes of this section, the following terms mean:
(1) Corporation. -- The term "corporation" includes associations, joint stock companies and other entities which are taxed as corporations for federal income tax purposes.
(A) C corporation. -- The term "C corporation" means a corporation which is not an S corporation for federal income tax purposes.
(B) S corporation. -- The term "S corporation" means a corporation for which a valid election under Section 1362(a) of the Internal Revenue Code is in effect for the taxable period. All other corporations are C corporations.
(2) Distributee. -- The term "distributee" includes any partner of a partnership, any shareholder of an S corporation, and any beneficiary of an estate or trust, that is treated as a pass-through entity for federal income tax purposes for the taxable year of the entity, with respect to all or a portion of its income.
(3) Internal Revenue Code. -- The term "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through the date specified in section nine of this article.
(4) Nonresident distributee. -- The term "nonresident distributee" includes any individual who is treated as a nonresident of this State under this article; and any partnership, estate, trust or corporation, whose commercial domicile is located outside this State.
(5) Partner. -- The term "partner" includes a member of a partnership as that term is defined in this section.
(6) Partnership. -- The term "partnership" includes a syndicate, group, pool, joint venture or other unincorporated organization through or by means of which any business, financial operation or venture is carried on, and which is not a trust or estate, a corporation or a sole proprietorship. "Partnership" does not include an unincorporated organization which, under Section 761 of the Internal Revenue Code, is not treated as a partnership for the taxable year for federal income tax purposes.
(7) Taxable period. -- The term "taxable period" means, in the case of an S corporation, any taxable year or portion of a taxable year during which a corporation is an S corporation.
(8) Taxable year of the pass-through entity. -- The term "taxable year of the pass-through entity" means the taxable year of the pass-through entity for federal income tax purposes. If a pass-through entity does not have a taxable year for federal tax purposes, its tax year for purposes of this article shall be the calendar year.
§11-21A-73. Information Statement for employee.
Every employer required to deduct and withhold tax under this article from the wages of an employee, or who would have been required so to deduct and withhold tax if the employee had claimed no more than one withholding exemption, shall furnish to each such employee in respect of the wages paid by such employer to such employee during the calendar year on or before the fifteenth day of February of the succeeding year, or, if his or her employment is terminated before the close of such calendar year, on the date on which the last payment of the wages is made, a written Statement as prescribed by the Tax Commissioner showing the amount of wages paid by the employer to the employee, the amount deducted and withheld as tax, and such other information as the Tax Commissioner shall prescribe.
§11-21A-74. Credit for tax withheld.
Wages upon which tax is required to be withheld shall be taxable under this article as if no withholding were required, but any amount of tax actually deducted and withheld under this article in any calendar year shall be deemed to have been paid to the Tax Commissioner on behalf of the person from whom withheld, and such person shall be credited with having paid that amount of tax for the taxable year beginning in such calendar year. For a taxable year of less than twelve months, the credit shall be made under regulations of the Tax Commissioner.
§11-21A-75. Employer's return and payment of withheld taxes.
(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 such calendar quarter, file a withholding return as prescribed by the Tax Commissioner and pay over to the Tax Commissioner the taxes so required to be deducted and withheld. Where the average quarterly amount so deducted and withheld by any employer is less than one hundred fifty dollars and the aggregate for the calendar year can reasonably be expected to be less than six hundred dollars, 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: Provided, That 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 believes such action 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.
(b) Monthly returns and payments of withheld tax. -- Notwithstanding the provisions of subsection (a), 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 so required to be deducted and withheld, if such withheld taxes aggregate two hundred fifty dollars 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.
(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 the thirty-first day of January 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.
(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, 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 one hundred thousand dollars shall remit the tax attributable to the first fifteen days of June each year on or before the twenty-third day of June.
(2) For purposes of complying with subdivision (1) of this subsection (e), 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 one hundred thousand dollars, the employer shall remit the tax attributable to the first fifteen days of June each year on or before the twenty-third day of June, as provided in subdivision (2) of this subsection (e).
(4) When an employer required to make an advanced payment of withholding tax under subdivision (1) of this subsection (e) makes out its return for the month of June, which is due on the twentieth day of July, 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 (e).
§11-21A-76. Employer's liability for withheld taxes.
Every employer required to deduct and withhold tax under this article is hereby made liable for such tax. To the extent not inconsistent with the provisions of this article, all of the provisions of article nine and ten of this chapter, relating to assessment and collection of taxes, and to penalties, additions to tax and interest in respect thereto, shall apply to every employer required to withhold tax under this article. For such purposes any amount required to be withheld and paid over to the Tax Commissioner shall be considered the tax of the employer. Any amount of tax actually deducted and withheld under this article shall be held to be a special fund in trust for the Tax Commissioner. No employee shall have any right of action against his or her employer in respect to any moneys deducted and withheld from his or her wages and paid over to the Tax Commissioner in compliance or in intended compliance with this article.
§11-21A-77. Employer's failure to withhold.
If an employer fails to deduct and withhold tax as required, and thereafter the tax against which such tax may be credited is paid, the tax so required to be deducted and withheld shall not be collected from the employer, but the employer shall not be relieved from liability for any penalties, interest, or additions to the tax otherwise applicable in respect of such failure to deduct and withhold.
§11-21A-78. Extension of withholding to certain lottery winnings.
(a) Lottery winnings subject to withholding. -- Proceeds of more than five thousand dollars from any lottery prize awarded by the West Virginia State Lottery Commission shall be subject to withholding. The West Virginia State Lottery Commission in making any payment of a lottery prize subject to withholding shall deduct and withhold from such payment a tax in an amount equal to six and one-half percent of such payment.
(b) Statement by recipient. -- Every person who is to receive payment of winning which is subject to withholding shall furnish the person making such payment a Statement made under the penalties of perjury, containing the name, address and taxpayer identification number of the person receiving the payment and each person entitled to any portion of such payment.
(c) Coordination with other sections. -- For the purposes of determining liability for payment of taxes and filing of returns, payments of winnings which are subject to withholding shall be treated as if they were wages paid by an employer to an employee.
§11-21A-79. Disposition of revenue.
Of the revenue collected under this article the State Treasurer shall retain in his or her hands such amount as the Tax Commissioner may determine to be necessary for refunds to which taxpayers shall be entitled under this article. The State treasurer shall, after reserving such refund fund, on or before the tenth day of each month pay all interest, penalties and taxes collected under this article and remaining to his or her credit in banks, banking houses or trust companies at the close of business on the last day of the preceding month, into the general fund of the State treasury.
§11-21A-80. Severability.
If any provision of this article or the application thereof shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder of said article, but shall be confined in its operation to the provision thereof directly involved in the controversy in which such judgment shall have been rendered, and the applicability of such provision to other persons or circumstances shall not be affected thereby.
§11-21A-81. Effective date.
This article shall take effect on the first day of January of the first year following the year in which the voters ratify the Fair taxation Amendment to the Constitution of this State.
ARTICLE 23. BUSINESS FRANCHISE TAX.
§11-23-29. Prospective termination of tax, preservation for prior periods.

Each and every provision of this article is repealed for all tax periods beginning on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State: Provided, That tax liabilities, if any, arising for taxable periods prior to the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State shall be determined, administered, assessed and collected as if the taxes imposed by this article had not been repealed; and the rights and duties of taxpayers and the State shall be fully and completely preserved.
ARTICLE 24. CORPORATION NET INCOME Tax.
§11-24-23h. Preservation of economic benefit of credit.
Notwithstanding the repeal of this article as provided in section forty-three of this article, any taxpayer subject to the tax imposed under article twenty-eight of this chapter and which has gained entitlement to the credit provided in section twenty-three-a of this article prior to the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State, shall be allowed a credit against the tax imposed under article twenty-eight of this chapter in an amount and for the tax year or years that will secure for such taxpayer an actual economic benefit equal in amount to the economic benefit it would have received by virtue of the credit provided in section twenty-three-a of this article but for section forty-three of this article.
§11-24-43. Prospective termination of tax, preservation for prior periods.

Each and every provision of this article is repealed for all tax periods beginning on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State: Provided, That tax liabilities, if any, arising for taxable periods prior to the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State shall be determined, administered, assessed and collected as if the taxes imposed by this article had not been repealed; and the rights and duties of taxpayers and the State shall be fully and completely preserved.
ARTICLE 27. HEALTH CARE PROVIDER TAXES.
§11-27-37. Phase-out of tax required by Fair Taxation Amendment.
Notwithstanding any provision of this code to the contrary, beginning on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State phasing out the taxes imposed by this article, the rates of the taxes imposed in this article shall be one hundred percent of the rates of tax imposed in this article immediately before ratification of the Fair Taxation Amendment; and in the second year, seventy percent; and in the third year, forty percent; and in the fourth year, twenty percent; and in the fifth year and thereafter, zero percent.
ARTICLE 28. BUSINESS ACTIVITIES AND PROFITS TAX.
§11-28-1. Short title.
This article is known and may be cited as the "Business Activities and Profits Tax Law."
§11-28-2. Legislative findings and declaration of purpose.
The Legislature finds and declares that all persons and entities, granted the privilege of engaging in business activities in this State, benefit from the functions of State Government regardless of how they are organized, and, as a result, in respect of that privilege they should provide some of the financial support for those functions through a single, simple, stable and predictable tax that fairly reflects the scale of their business activities in this State. The Legislature further finds that, until they reach a certain minimum scale of business activity, the operators of enterprises will be contributing their fair share of that support through the taxes imposed on them as individuals under other articles of this chapter.
The Legislature does therefore declare that the purpose of this article shall be to impose the business activities and profits tax which is based on, and shall be construed so as to give effect to, the foregoing findings.
§11-28-3. Definitions of terms; general rule and specific terms defined.

(a) General rule. -- Any term used in this article shall have the same meaning as when used in any comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required by the context or by specific definition in this article. For purposes of this article, terms specifically defined in this section shall have the meanings ascribed to them herein unless a different meaning is clearly required by either the context in which the term is used or by specific definition in another section of this article.
(b) Terms defined. --
(1) Adjusted profit. -- The term "adjusted profit" means a taxpayer's net income reportable for federal income tax purposes less the adjustments provided in this article.
(2) Affiliated group. -- The term "affiliated group" means one or more subsidiaries connected by a common parent taxpayer.
(3) Allowable depreciation. -- The term "allowable depreciation" means the amount of depreciation allowable to the taxpayer as a deduction for federal income tax purposes in a taxable year with respect to capital assets for which a qualified capital expenditure deduction was allowed under this article in the same or a prior taxable year.
(4) Apportionment factor. -- The term "apportionment factor" means, for a taxable year, a fraction the numerator of which is sum of the taxpayer's payroll factor, plus the property factor, plus two times the sales factor, and the denominator of which is four, reduced by the number of factors, if any, having no denominator, with the sales factor counting as two factors.
(5) Business activity or engaging in business activity. -- The term "business activity" and the phrase "engaging in business activity" are used interchangeably and mean any purposeful revenue generating activity, except casual transactions, by a person who or which enjoys the benefits and protection of the government and laws of this State.
(6) Casual transactions. -- The term "casual transactions" means transactions which are not conducted by the taxpayer in a repeated manner or in the ordinary course of repetitive and successive activities of like character.
(7) Commissioner or Tax Commissioner. -- The terms "Commissioner" or "Tax Commissioner" are used interchangeably herein and mean the Tax Commissioner of the State of West Virginia, or his or her delegate.
(8) Compensation. -- The term "compensation" means:
(A) Wages, salaries, commissions and any other form of remuneration paid or accrued in the taxable year on behalf of or for the benefit of employees, officers or directors for personal services rendered to the taxpayer which are subject to or specifically made exempt from withholding for federal income tax purposes;
(B) Amounts reportable by a partner as earned income from personal services rendered to a taxpayer that is a partnership, or by a member or another person as an owner of an interest in an entity treated as a partnership for federal income tax purposes; and
(C) Amounts reportable as net earnings from self-employment for federal income tax purposes to the extent not included in the preceding subparagraph (B).
(9) Corporation. -- The term "corporation" includes any corporation, S corporation, joint-stock company and any association or other organization which is treated as a corporation for federal income tax purposes.
(10) Delegate. -- The term "delegate" in the phrase "his or her delegate", when used in reference to the Tax Commissioner, means any officer or employee of the State Tax Division of the Department of Revenue duly authorized by the Tax Commissioner directly, or indirectly by one or more redelegations of authority, to perform functions mentioned or described in this article or regulations promulgated thereunder.
(11) Domicile. -- The term "domicile" means the principal place from which the business activity of the taxpayer is directed or managed: Provided, That the domicile of a financial organization, which is subject to regulation as such, shall be at the place designated as its principal office with its regulating authority.
(12) Fiduciary. -- The term "fiduciary" means, and includes, a guardian, trustee, executor, administrator, receiver, conservator or any other person acting in a fiduciary capacity for any other person.
(13) Financial organization. -- The term "financial organization" means:
(A) A holding company or subsidiary thereof. As used in this section, "holding company" means a corporation registered under the federal bank holding company act of 1956 or registered as a savings and loan holding company other than a diversified savings and loan holding company (as defined in Section 408(a)(1)(F) of the federal national housing act;
(B) A regulated financial corporation or a subsidiary thereof. As used in this section, "regulated financial corporation" means:
(1) An institution, the deposits, shares or accounts of which are insured under the federal deposit insurance act, or by the federal savings and loan insurance corporation;
(2) An institution that is a member of a federal home loan bank;
(3) Any other bank or thrift institution incorporated or organized under the laws of a State that is engaged in the business of receiving deposits;
(4) A credit union incorporated and organized under the laws of this State;
(5) A production credit association organized under 12 U.S.C. 2071;
(6) A corporation organized under 12 U.S.C. 611 through 631; or
(7) A federal or State agency or branch of a foreign bank; or
(C) A corporation which derives more than fifty percent of its gross receipts from business activity from one or more of the following activities:
(1) Making, acquiring, selling or servicing loans or extensions of credit. Loans and extensions of credit include:
(I) Secured or unsecured consumer loans;
(II) Installment obligations;
(III) Mortgages or other loans secured by real estate or tangible personal property;
(IV) Credit card loans;
(V) Secured and unsecured commercial loans of any type; and
(VI) Loans arising in factoring.
(2) Leasing or acting as an agent, broker or advisor in connection with leasing real and personal property that is the economic equivalent of an extension of credit.
(3) Operating a credit card business.
(4) Rendering estate or trust services.
(5) Receiving, maintaining or otherwise handling deposits.
(6) Engaging in any other activity with an economic effect comparable to those activities described in items (1), (2), (3), (4) and (5) of this subparagraph.
(14) Fiscal year. -- The term "fiscal year" means an accounting period of twelve months ending on any day other than the last day of December, and on the basis of which the taxpayer is required to report for federal income tax purposes.
(15) Gross receipts. -- The term "gross receipts" means the amount of money, credits, property or other consideration, without deduction for any expenses whatsoever, received by a person as a result of and with respect to his, her or its business activity.
(16) Includes and including. -- The terms "includes" and "including" when used in a definition in this article shall not be deemed to exclude other things otherwise within the meaning of the term being defined.
(17) Interest. -- The term "interest" when used in reference to an element of the tax base described in section four of this article means amounts paid or accrued by a taxpayer for the use or forbearance of money or property.
(18) Nexus. -- The term "nexus" means the extent of contacts that a person has with a State that is sufficient, under the laws and Constitution of the United States, to permit that State to exercise its jurisdiction to impose, on that person, taxes and obligations to report to it for tax purposes.
(19) Nonprofit organization. -- The term "nonprofit organization" means a corporation, partnership or other entity that is organized and functions in a manner consistent with the substantive requirements of the laws of the United States relating to organizations exempt from federal income taxes.
(20) Parent taxpayer. -- The term "parent taxpayer" means a corporation, partnership or other taxpayer which owns on average during the taxable year more than fifty percent of the stock, partnership or other equity ownership interest in another corporation, partnership or other entity, which interest is accompanied by the right to vote on matters of governance of the business affairs of the other corporation, partnership or other entity.
(21) Partnership and partner. -- The term "partnership" includes a syndicate, group, pool, joint venture, or other unincorporated organization through or by means of which any business, financial operation or venture is carried on, whether for profit or not, which is treated as a partnership for federal income tax purposes, but which is not a trust, estate or corporation. The term "partner" includes a member in such a syndicate, group, pool, joint venture or other unincorporated organization which is a partnership.
(22) Payroll factor. -- The term "payroll factor" means a fraction, the numerator of which is the total compensation paid in this State during the taxable year by the taxpayer, and the denominator of which is the total compensation paid by the taxpayer during the taxable year.
(23) Person. -- The term "person" means any individual, partnership, association, corporation, trust, estate or any other entity that has a separate identity under applicable law.
(24) Profit. -- The term "profit" means a person's net income from business activities as reported for federal income tax purposes.
(25) Pro forma return. -- The term "pro forma return" means the return a taxpayer would have filed with the Internal Revenue Service of the United States Department of the Treasury for the taxable year had it elected to file, or were it not exempt from filing, as a separate entity a return for federal income tax purposes.
(26) Property factor. -- The term "property factor" means a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used by it in this State during the taxable year, and the denominator of which is the average value of all real and tangible personal property owned or rented by the taxpayer and used by it during the taxable year.
(27) Qualified capital expenditure. -- The term "qualified capital expenditure" means the cost paid or accrued by a taxpayer in a taxable year for the purchase or lease of tangible assets, real or personal, located in this State and as to which the taxpayer is or will be allowed a deduction for depreciation for federal income tax purposes.
(28) Qualified investment company. -- The term "qualified investment company" means a regulated investment company as defined in the laws of the United States relating to federal income taxes, or an organization generally subject to the Investment Company Act of 1940 as amended and set forth in the United States code, without regard to whether it may be expressly excepted from compliance with the provisions of that said federal law.
(29) Sales. -- The term "sales" means all gross receipts generated by the taxpayer's business activity.
(30) Sales factor. -- The term "sales factor" means a fraction, the numerator of which is the gross receipts of the taxpayer derived from business activity in this State during the taxable year, less returns and allowances. The denominator of the fraction is the gross receipts derived by the taxpayer from business activity during the taxable year, less returns and allowances.
(31) State. -- The term "State" means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States, and any foreign country or political subdivision thereof.
(32) Stock. -- The term "stock" means shares in a corporation, association or joint-stock company. It shall not include nonvoting stock which is limited and preferred as to dividends, or treasury stock.
(33) Subsidiary. -- The term "subsidiary" means the corporation, partnership or other entity in which a parent taxpayer holds an ownership interest, and voting rights.
(34) Taxable year and short taxable year. -- The term "taxable year" means the calendar year, or the fiscal year ending in such calendar year, upon the basis of which tax liability is computed under this article. The term "short taxable year" means the period that is a fractional part of a taxable year for which a return is made under this article, or under regulations promulgated by the Tax Commissioner.
(35) Taxpayer. -- The term "taxpayer" means any person subject to the tax imposed by this article.
(36) Taxable in another State. -- The term "taxable in another State" means a taxpayer who is lawfully subject to tax on net income or measured by net income, or to a tax imposed on the privilege of engaging in business activity in a State that is not this State, or who would be subject to such a tax if such other State imposed it on the taxpayer.
(37) Transportation business. -- The term "transportation business" means the business activity of conveying passengers or goods from one geographical location to another geographical location.
(38) This code. -- The term "this code" means the code of West Virginia, 1931, as amended.
(39) This State. -- The term "this State" means the State of West Virginia.
(40) Unitary group. -- The term "unitary group" means the members of an affiliated group which are engaged in a single, integrated line of business activity.
§11-28-4. Base of tax; deductions and exceptions; apportionment.
(a) Tax Base. -- For the purposes of this article, but subject to the exceptions provided in this section, the tax base of a taxpayer shall consist of an amount equal to the sum of the taxpayer's payments during the taxable year for compensation, rents, royalties and interest, plus its allowable depreciation and adjusted profit for the taxable year, less qualified capital expenditures and less deductions provided in this section.
(b) Small business deduction. -- A taxpayer whose tax base amount in the taxable year, as determined under subsection (a) of this section without regard to this subsection, is not more than fifty thousand dollars, or whose gross receipts in the taxable year are not more than one hundred thousand dollars, shall be entitled to a deduction from his, her or its tax base equal to one hundred percent of that tax base amount; a taxpayer whose tax base amount in the taxable year, as determined under subsection (a) of this section without regard to this subsection, is more than fifty thousand dollars, but not more than one hundred thousand dollars, or whose gross receipts in the taxable year are more than one hundred thousand dollars, but not more than two hundred thousand dollars, shall be entitled to a deduction from his, her or its tax base equal to eighty percent of that tax base amount; a taxpayer whose tax base amount in the taxable year, as determined under subsection (a) of this section without regard to this subsection, is more than one hundred thousand dollars, but not more than one hundred fifty thousand dollars, or whose gross receipts in the taxable year are more than two hundred thousand dollars, but not more than three hundred thousand dollars, shall be entitled to a deduction from his, her or its tax base equal to sixty percent of that tax base amount; a taxpayer whose tax base amount in the taxable year, as determined under subsection (a) of this section without regard to this subsection, is more than one hundred fifty thousand dollars, but not more than two hundred thousand dollars, or whose gross receipts in the taxable year are more than three hundred thousand dollars but not more than four hundred thousand dollars, shall be entitled to a deduction from his, her or its tax base equal to forty percent of that tax base amount; a taxpayer whose tax base amount in the taxable year, as determined under subsection (a) of this section without regard to this subsection, is more than two hundred thousand dollars but not more than two hundred fifty thousand dollars, or whose gross receipts in the taxable year are more than four hundred thousand dollars, but not more than five hundred thousand dollars, shall be entitled to a deduction from his, her or its tax base equal to twenty percent of that tax base amount; and a taxpayer whose tax base amount in the taxable year, as determined under subsection (a) of this section without regard to this subsection, is more than two hundred fifty thousand dollars but not more than five hundred thousand dollars, or whose gross receipts in the taxable year are more than five hundred thousand dollars, but not more than one million dollars, shall be entitled to a deduction from his, her, or its tax base equal to ten percent of that tax base amount.
(c) Adjustment for dividends received. -- To avoid multiple taxation of the same taxpayer, a taxpayer which is a member of an affiliated group of entities may, in determining its adjusted profit for purposes of subsection (a) of this section, deduct from profit for the taxable year the amount of dividends received from another member of that same group and included in the payor's tax base.
(d) Tax base of financial organizations. -- Notwithstanding subsection (a) of this section, the tax base of a taxpayer which is a financial organization, and which is not taxable in another State for the taxable year, shall be the sum of the taxpayer's payments in the taxable year for compensation, rents and royalties, expenses directly attributable to the acquisition, holding and sale of federal and State obligations and interest incurred in nonfinancial intermediation activities, plus allowable depreciation and its adjusted profit for the tax year, less interest earned on federal and State obligations and qualified capital expenditures. A taxpayer that is a financial organization having nexus with this State, but that is also taxable in another State, shall, notwithstanding subsection (f) of this section, determine the adjusted profit element of its tax base under section six of this article.
(e) Multistate transportation businesses. -- taxpayers engaged in the transportation business in this State and taxable in another State or States, shall, notwithstanding subsection (f) of this section, determine the adjusted profit element of his, her or its tax base according to section seven of this article.
(f) Allocation and apportionment.
(1) Domiciled taxpayers. -- Except for taxpayers that are financial organizations, the tax base of a person who has its domicile in West Virginia but is also taxable in another State, shall be determined by applying the allocation and apportionment rules under section five of this article.
(2) Nondomiciled taxpayers. -- Except for taxpayers that are financial organizations, the tax base of a person not having its domicile in West Virginia but having nexus with West Virginia shall be determined by applying the allocation and apportionment rules under section five of this article.
§11-28-5. Allocation and apportionment of tax base.
A taxpayer whose tax base is to be determined under this section shall make the following allocations and apportionments of his, her or its tax base:
(a) Allocation of compensation paid. -- Compensation shall be allocated to this State and included in the compensation element of the tax base if the compensated person's base of operations for the performance of his or her services is in this State, or, if there is no base of operations for that person in any State, if the person's services are controlled or directed from this State, or, if no State can be identified from which the person's services are controlled or directed, if that person is a resident of this State.
(b) Allocation of rents and royalties paid. -- Rents and royalties paid shall be allocated to this State and included in the rents and royalties paid element of the tax base to the extent the property for which they are paid, real, personal, tangible or intangible, is used in this State by the taxpayer.
(c) Apportionment of interest paid. -- Interest paid shall be apportioned to this State and included in the interest paid element of the tax base based on the taxpayer's property factor.
(d) Apportionment of profits. -- Except for taxpayers engaged in the transportation business, a taxpayer's profit shall be apportioned to this State and included in the profit element of the tax base based on the taxpayer's apportionment factor.
(e) Use of allocated and apportioned elements to determine tax base. -- The taxpayer shall determine his, her or its tax base in a taxable year by:
(1) Adding:
(A) The allocated amount of compensation paid;
(B) The allocated amount of rents and royalties paid;
(C) The result of multiplying the amount of interest paid by the property factor;
(D) The result of multiplying his, her or its profit for the taxable year by the apportionment factor; and
(E) The amount of allowable depreciation; and
(2) By subtracting from the sum determined under subparagraph (1) the amount of the taxpayer's qualified capital expenditures for the taxable year.
(f) Other methods of allocation.
(1) General. -- If the allocation and apportionment provisions of subsections (a) through (e) of this section do not fairly represent the extent of the taxpayer's business activities in this State, the taxpayer may petition for or the tax Commissioner may require, in respect to all or any part of the taxpayer's business activities, if reasonable:
(A) Separate accounting;
(B) The modification of one of the factors used in the apportionment factor;
(C) The inclusion of one or more additional factors in the apportionment factor which will fairly represent the taxpayer's business activity in this State; or
(D) The employment of any other method to effectuate an equitable allocation or apportionment of the taxpayer's tax base. Such petition shall be filed no later than the due date of the annual return for the taxable year for which the alternative method is requested, determined without regard to any extension of time for filing such return, and the petition shall include a Statement of the petitioner's objections and of such alternative method of allocation or apportionment as it believes to be proper under the circumstances with such detail and proof as the Tax Commissioner may require.
(2) Burden of proof. -- In any proceeding before the Tax Commissioner or in any court in which employment of one of the methods of allocation or apportionment provided in subdivision (1) of this subsection is sought, on the grounds that the other allocation and apportionment provisions of this section do not fairly represent the extent of the taxpayer's business activities in this State, the burden of proof would:
(A) Be on the Tax Commissioner, if the Tax Commissioner seeks employment of one of such methods; or
(B) Be on the taxpayer, if the taxpayer seeks employment of one of such other methods.
(3) Notwithstanding any other provisions of this section, financial organizations shall use only the special apportionment rules set forth in section six of this article.
§11-28-6. Special allocation and apportionment rules for financial organizations.

(a) West Virginia financial organizations taxable in another State. -- A financial organization which has its domicile in this State and which is taxable in another State may not apportion its tax base under the general apportionment rule. Instead, those financial organizations would allocate their entire tax base to West Virginia without apportionment. Those financial organizations would then be allowed a credit against their business activities and profits tax for the amount of other similar tax lawfully paid to another State in respect of the taxable year on that portion of its tax base which was lawfully taxed in the other State.
(b) Out-of-State financial organizations with business activities in this State. -- A financial organization which does not have its domicile in this State and which regularly engages in business activities in this State would allocate compensation, rents and royalties paid and, to the extent includable, interest paid in the same manner as other taxpayers. The profit element of its tax base would be apportioned to this State by multiplying it by the special gross receipts factor calculated as provided in this section. The product of this multiplication is the portion of its profit that is attributable to its business activity in this State.
(c) Engaging in business, nexus presumptions and exclusions. -- A financial organization that has its domicile in another State is presumed to be regularly engaging in business in this State if during any year it obtains or solicits business with twenty or more persons within this State, or if the sum of the value of its gross receipts attributable to sources in this State equals or exceeds one million dollars. However, gross receipts from the following types of property (as well as those contacts with this State reasonably and exclusively required to evaluate and complete the acquisition or disposition of the property, the servicing of the property or the income from it, the collection of income from the property or the acquisition or liquidation of collateral relating to the property) would not be a factor in determining whether the owner is engaging in business in this State:
(1) An interest in a real estate mortgage investment conduit, a real estate investment trust or a regulated investment company;
(2) An interest in a loan backed security representing ownership or participation in a pool of promissory notes or certificates of interest that provide for payments in relation to payments or reasonable projections of payments on the notes or certificates;
(3) An interest in a loan or other asset from which the interest is attributed to a consumer loan, a commercial loan or a secured commercial loan and in which the payment obligations were solicited and entered into by a person that is independent and not acting on behalf of the owner;
(4) An interest in the right to service or collect income from a loan or other asset from which interest on the loan is attributed as a loan described in the previous paragraph and in which the payment obligations were solicited and entered into by a person that is independent and not acting on behalf of the owner; and
(5) Any amounts held in an escrow or trust account with respect to property described above.
(d) Definitions. -- Certain terms used in this special apportionment rule for banks and financial institutions would be defined as follows:
(1) For purposes of this section, the term "deposit" means:
(A) The unpaid balance of money or its equivalent received or held by a financial organization in the usual course of business and for which it has given or it is obligated to give credit, either conditionally or unconditionally, to a commercial checking, savings, time or thrift account, whether or not advance notice is required to withdraw the credit funds, or which is evidenced by a certificate of deposit, thrift certificate, investment certificate or certificate of indebtedness or other similar name, or a check or draft drawn against a deposit account and certified by the financial organization, or a letter of credit or a traveler's check on which the financial organization is primarily liable. However, without limiting the generality of the term "money or its equivalent," any such account or instrument must be regarded as evidencing the receipt of the equivalent of money when credited or issued in exchange for checks, drafts or for a promissory note upon which the person obtaining any such credit or instrument is primarily or secondarily liable or for a charge against a deposit account or in settlement of checks, drafts or other instruments forwarded to such bank for collection;
(B) Trust funds received or held by such financial organization, whether held in the trust department or held or deposited in any other department of such financial organization;
(C) Money received or held by a financial organization or the credit given for money or its equivalent received or held by a financial organization in the usual course of business for a special or specific purpose, regardless of the legal relationship thereby established, including without being limited to, escrow funds, funds held as security for an obligation due the financial organization or other (including funds held as dealers' reserves) or for securities loaned by the financial organization, funds deposited by a debtor to meet maturing obligations, funds deposited as advance payment on subscriptions to United States government securities, funds held for distribution or purchase of securities, funds held to meet its acceptances or letters of credit and withheld taxes. However, there would not be included funds which are received by the financial organization for immediate application to the reduction of an indebtedness to the receiving financial organization or under condition that the receipt thereof immediately reduces or extinguishes such an indebtedness.
(D) Outstanding drafts (including advice or authorization to charge a financial organization's balance in another such organization), cashier's check, money orders or other officer's checks issued in the usual course of business for any purpose, but not including those issued in payment for services, dividends or purchases or other costs or expenses of the financial organization itself; and
(E) Money or its equivalent held as a credit balance by a financial organization on behalf of its customer if such entity is engaged in soliciting and holding such balances in the regular course of its business.
(2) For purposes of this section, the term "sales" would mean the gross receipts of a financial organization included in the gross receipts factor described in the rule regardless of their source.
(e) Special gross receipts factor. -- The special gross receipts factor is a fraction, the numerator of which is the total gross receipts of the taxpayer from sources within this State during the taxable year and the denominator of which is the total gross receipts of the taxpayer wherever earned during the taxable year. However, neither the numerator nor the denominator of the gross receipts factor would include receipts from obligations of the United States government backed by the full faith and credit of the United States or obligations of this State or any of its political subdivisions.
(1) Numerator. -- The numerator of the gross receipts factor would include, in addition to items otherwise includable in the sales factor under the general apportionment factor applicable to most other taxpayers, the following:
(A) Gross receipts from the lease or rental of real or tangible personal property (whether as the economic equivalent of an extension of credit or otherwise) if the property is located in this State;
(B) Interest income and other receipts from assets in the nature of loans that are secured primarily by real estate or tangible personal property if the security property is located in the State. In the event the security property is also located in one or more other States, such receipts shall be presumed to be from sources within this State subject to rebuttal based upon factors described in rules to be promulgated by the Tax Commissioner, including the factor that the proceeds of any such loans were applied and used by the borrower entirely outside of this State;
(C) Interest income and other receipts from consumer loans which are unsecured or are secured by intangible property that are made to residents of this State, whether at a place of business, by traveling loan officer, by mail, by telephone or other electronic means or otherwise;
(D) Interest income and other receipts from commercial loans and installment obligations that are unsecured or are secured by intangible property, if and to the extent that the borrower or debtor is a resident of or is domiciled in this State. These receipts are presumed to be from sources in this State and such presumption may be overcome by reference to factors described in rules to be promulgated by the Tax Commissioner, including the factor that the proceeds of any such loans were applied and used by the borrower entirely outside of this State;
(E) Interest income and other receipts from a financial organization's syndication and participation in loans, under the rules set forth in subparagraphs (A) through (D) above;
(F) Interest income and other receipts, including service charges from financial institution credit card, travel and entertainment credit card receivables and credit card holders' fees, if the borrower or debtor is a resident of this State or if the billings for any such receipts are regularly sent to an address in this State;
(G) Merchant discount income derived from financial institution credit card holder transactions with a merchant located in this State. In the case of merchants located within and without this State, only receipts from merchant discounts attributable to sales made from locations within this State shall be attributed to this State. It shall be presumed, subject to rebuttal, that the location of a merchant is the address shown on the invoice submitted by the merchant to the taxpayer;
(H) Gross receipts from the performance of services are attributed to this State if:
(i) The service receipts are loan-related fees including loan servicing fees, and the borrower resides in this State except that, at the taxpayer's election, receipts from loan-related fees which are either:
(I) "Pooled" or aggregated for collective financial accounting treatment;
(II) Manually written as nonrecurring extraordinary charges to be processed directly to the general ledger may either be attributed to a State based upon the borrowers' residences or upon the ratio that total interest sourced to that State bears to total interest from all sources;
(ii) The service receipts are deposit-related fees and the depositor resides in this State except that, at the taxpayer's election, receipts from deposit-related fees which are either:
(I) "Pooled" or aggregated for collective financial accounting treatment;
(II) Manually written as nonrecurring extraordinary charges to be processed directly to the general ledger may either be attributed to a State based upon the depositors' residences or upon the ratio that total deposits sourced to that State bears to total deposits from all sources.
(iii) The service receipt is a brokerage fee and the account holder is a resident of this State;
(iv) The service receipts are fees related to estate or trust services and the State's decedent was a resident of this State immediately before death or the grantor who either funded or established the trust is a resident of this State; or
(v) The service receipt is associated with the performance of any other service not identified above and the service is performed for an individual resident of or for a corporation or other business domiciled in this State and the economic benefit of such service is received in this State;
(I) Gross receipts from the issuance of travelers' checks and money orders if such checks and money orders are purchased in this State; and
(J) All other receipts not attributed by this rule to a State in which the taxpayer is taxable shall be attributed pursuant to the laws of the State of the taxpayer's commercial domicile.
(2) Denominator. -- The denominator of the gross receipts factor would include all of the taxpayer's gross receipts from transactions of the kind included in the numerator, but without regard to their source or situs.
§11-28-7. Special apportionment formula for profits of transportation businesses.

(a) Barges. -- A barge company transporting property would apportion the profits component of its tax base by the ratio that revenue miles in this State bear to revenue miles everywhere during the taxable year.
(b) Motor carriers. -- An interstate motor carrier of property or passengers would apportion the profits component of its tax base to this State by the ratio that its total vehicle miles in this State during the taxable year bears to total vehicle miles of the motor carrier everywhere during the taxable year, except as otherwise provided in this subsection.
(1) Definitions. -- For purposes of the special apportionment rule for motor carriers:
(A) "Motor carrier" means any person engaging in the transportation business and in doing so employs motor propelled vehicles over roads in this State whether traveling on a scheduled route or otherwise.
(B) "Vehicle mile" means the operation of a motor propelled vehicle by a motor carrier over a distance of one mile in the pursuit of its transportation business.
(2) Exception. -- This special apportionment rule would not apply to a motor carrier:
(A) Which neither owns nor rents real or tangible personal property located in this State, which has made no pick-ups or deliveries within this State and which has traveled less than fifty thousand vehicle miles in this State during the taxable year; and
(B) Which neither owns nor rents any real or tangible personal property located in this State, except vehicles, and which makes no more than twelve trips into or through this State during a taxable year.
(C) The mileage traveled under fifty thousand vehicle miles or the mileage traveled in this State during the twelve trips into or through this State may not represent more than five percent of the total motor vehicle miles traveled in all States during the taxable year.
(c) Pipeline Companies. --
(1) When the tax base is derived from transportation of oil by pipeline, the apportionment of profits would be based on barrel-miles. Profits apportioned to this State would be total profits included in the tax base multiplied by the ratio that barrel miles transported in this State bears to the barrel miles transported by the taxpayer everywhere during the taxable year.
(2) When the tax base is derived from transportation of natural gas by pipeline, the apportionment of profits would be based on one thousand cubic-foot miles. Profits apportioned to this State would be total profits included in the tax base multiplied by the ratio that one thousand cubic-foot miles transported in this State bear to the one thousand cubic-foot miles transported by the taxpayer everywhere during the taxable year.
(d) Railroads. -- Railroads transporting passengers or property would apportion their profits based upon the ratio that revenue miles in this State bear to revenue miles everywhere during the taxable year.
§11-28-8. Imposition of tax; temporary initial rate of tax; short taxable years.

(a) General. -- An annual business activities and profits tax is hereby imposed on each person exercising the privilege of engaging in business activities in this State and in respect of the benefits and protection conferred. Such tax shall be collected from every taxpayer as that term is defined in section three of this article.
(b) Amount of tax and rate; effective date. -- On or about the first day of July, two thousand six, the amount of tax shall be two percent of the amount of the taxpayer's tax base, as determined under this article.
(c) Taxable years before July 1, 2005. -- For taxable years beginning before the first day of July, two thousand five, the amount of tax due under this article shall be two and two tenths percent of the taxpayer's tax base, as determined under this article.
(d) Short taxable years. -- When the taxpayer's taxable year for federal income tax purposes is a short taxable year, the tax due under this article shall be prorated based on the ratio which the number of months in such short taxable years 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 engaged in business activities in this State bears to twelve.
§11-28-9. Exemptions.
The following persons and entities are exempt from the tax imposed by this article to the extent provided in this section:
(a) Employees as defined in this article.
(b) Persons and entities only engaged in casual transactions as defined in this article.
(c) The United States, the State of West Virginia, the other States of the United States, their agencies, political subdivisions and instrumentalities.
(d) Persons and entities holding an ownership interest in a qualified investment company, as defined in this article, that confine their activities in this State to investment and other activities consistent with their organizational purposes and those incidental to or in support of those activities.
(e) Nonprofit organizations that do not regularly engage in business activities in this State as that term is defined in this article.
§11-28-10. Credits against tax.
(a) Credit for tax paid by subsidiary. -- A parent taxpayer that files a separate return under this article shall be allowed a credit against such taxpayer's liability for the tax under this article equal to the amount of taxes paid by its subsidiary for the taxable year under this article multiplied by the percentage of the parent taxpayer's ownership of the subsidiary. In the case of corporations, that percentage shall be equal to the percentage of stock of all classes owned by the parent taxpayer. In no case shall any credit allowable by this section, which is not used on an annual return, be carried forward or back, but instead the same shall be forfeited.
(b) Credit for unrealized investment incentive benefits. -- A taxpayer who became entitled to claim the benefit of the credits against other taxes imposed under this chapter pursuant to the provisions of articles thirteen-c, thirteen-d, thirteen-e, thirteen-f, thirteen-g, thirteen-h, thirteen-i, thirteen-j, thirteen-k, thirteen-l, thirteen-m, thirteen-n, thirteen-o, thirteen-p, thirteen-q, thirteen-r or thirteen-s of this chapter, but who would not receive the full economic benefit of such entitlement solely by virtue of the repeal in the year two thousand four of either one or more of the credit provisions, or of one or more of the taxes against which those credits were allowed or of the repeal of both, shall be entitled to a credit against the tax imposed by this article in an amount equal to the present economic value of the unused and unexpired credit the taxpayer had otherwise earned as provided in one or more of those other articles of this chapter. The entitlement to the credit allowed in this subsection, and the means and timing of asserting it, shall be in accordance with legislative regulations promulgated by the Tax Commissioner pursuant to the provisions of article three, chapter twenty-nine-a of this code.
§11-28-11. Accounting periods and methods of accounting.
(a) General rule. -- For purposes of the tax imposed by this article, a taxpayer's taxable year shall be the same as the taxpayer's taxable year for federal income tax purposes.
(b) Change of taxable year. -- If a taxpayer's taxable year is changed for federal income tax purposes, the taxpayer's taxable year for purposes of this article shall be similarly changed.
(c) Methods of accounting. --
(1) Same as federal. -- A taxpayer's method of accounting under this article shall be the same as the taxpayer's method of accounting for federal income tax purposes. In the absence of any method of accounting for federal income tax purposes, the accrual method of accounting shall be used unless the Tax Commissioner, in writing, consents to use of another method.
(2) Change of accounting methods. -- If a taxpayer's method of accounting is changed for federal income tax purposes, his, her or its method of accounting for purposes of this article shall be similarly changed.
§11-28-12. Annual returns; special rule for nonprofit organizations; extensions of time.

(a) In general. -- Every person subject to the tax imposed by this article shall make and file an annual return for its taxable year with the Tax Commissioner on or before the fifteenth day of the fourth month following the close of the taxable year. The annual return shall include such information as the Tax Commissioner may require for determining the amount of taxes due under this article for the taxable year.
(b) Special rule for nonprofit organizations. -- Notwithstanding the provisions of subsection (a) of this section, when a return is required from a nonprofit organization under this article, the annual return shall be filed on or before the fifteenth day of the fifth month following the close of the taxable year.
(c) Extensions of time for filing returns. -- The tax Commissioner may grant a reasonable extension of time for filing any returns or other document required by this article upon such terms as he or she may by regulations prescribe. An extension of time for an annual return for federal income tax purposes shall automatically extend the time for filing any return or other document required by this article for the same period as the extension for filing such federal return. An extension of time for filing a return shall not extend the time for payment of the tax.
§11-28-13. Method of filing.
(a) Privilege to file consolidated return. -- An affiliated group shall, subject to the provisions of this section and in accordance with any regulations prescribed by the Tax Commissioner, have the privilege of filing a consolidated return with respect to the tax imposed by this article for the taxable year in lieu of filing separate returns. The making of a consolidated return shall be upon the condition that all persons which at any time during the taxable year have been members of the affiliated group are included in such return and consent to the filing of such return. The filing of a consolidated return shall be considered as such consent. When a person is a member of an affiliated group for a fractional part of the year, the consolidated return shall include the tax base of such person for that part of the year during which it is a member of the affiliated group.
(b) Election binding. -- If an affiliated group elects to file a consolidated return under this article, such election once made shall not be revoked for any subsequent taxable year without the written approval of the Tax Commissioner consenting to the revocation.
(c) Consolidated return -- financial organizations. -- An affiliated group that includes one or more financial organizations may elect under this section to file a consolidated return when that affiliated group complies with all of the following rules:
(1) The affiliated group of which the financial organization is a member must file a federal consolidated income tax return for the taxable year;
(2) All members of the affiliated group included in the federal consolidated return must consent to being included in the consolidated return filed under this article. The filing of a consolidated return under this article is conclusive proof of such consent;
(3) The tax base of the affiliated group shall be the sum of:
(A) The pro forma tax base of all financial organizations having their domicile in this State that are included in the federal consolidated return, as shown on a combined pro forma West Virginia return prepared for such financial organizations; plus
(B) The pro forma West Virginia tax base of all financial organizations not having their domicile in this State that are included in the federal consolidated return, as shown on a combined pro forma West Virginia return prepared for such financial organization; plus
(C) The pro forma West Virginia tax base of all other members included in the federal consolidated income tax return, as shown on a combined pro forma West Virginia return prepared for all such nonfinancial organization members, except that the tax base apportionment factors and other items considered when determining tax liability shall not be included in the pro forma return prepared under this paragraph for a member that is totally exempt from tax under section nine of this article, or for a member that is subject to a different special industry apportionment rule provided in this article. When a different special industry apportionment rule applies, the tax base of a member(s) subject to that special industry apportionment rule shall be determined on a separate pro forma West Virginia return for the member(s) subject to that special industry rule and the tax base so determined shall be included in the consolidated return;
(4) The West Virginia consolidated return is prepared in accordance with regulations of the Tax Commissioner promulgated as provided in article three, chapter twenty-nine-a of this code; and
(5) The filing of a consolidated return does not distort the tax base of the affiliated group. In any proceeding, the burden of proof that the taxpayer's method of filing does not distort its tax base under this article shall be upon the taxpayer.
(d) Combined return. -- A combined return may be filed under this article by a unitary group, including a unitary group that includes one or more financial organizations, only pursuant to the prior written approval of the Tax Commissioner. A request for permission to file a combined return must be filed on or before the statutory due date of the return, determined without inclusion of any extension of time to file the return. Permission to file a combined return may be granted by the Tax Commissioner only when taxpayer submits evidence that conclusively establishes that failure to allow the filing of a combined return will result in an unconstitutional distortion of the measure of tax under this article. When permission to file a combined return is granted, combined filing will be allowed for the year(s) Stated in the Tax Commissioner's letter. The combined return must be filed in accordance with regulations of the Tax Commissioner promulgated under article three, chapter twenty-nine-a of this code.
(e) Rules. -- The Tax Commissioner shall prescribe such rules as he or she may deem necessary in order that the tax liability of any affiliated group filing a consolidated return, or of any unitary group filing a combined return, and of each member of an affiliated or unitary group, both during and after the period of affiliation, may be returned, determined, computed, assessed, collected and adjusted, in such manner as the Tax Commissioner deems necessary to clearly reflect tax liability under this article and the factors necessary for the determination of such liability, and in order to prevent avoidance of such tax liability.
(f) Computation and payment of tax. -- In any case in which a consolidated or combined return is filed, or required to be filed, the tax due under this article from the affiliated or unitary group shall be determined, computed, assessed, collected and adjusted in accordance with regulations prescribed by the Tax Commissioner, in effect on the last day prescribed by section twelve of this article for the filing of such return, and such affiliated or unitary group, as the case may be, shall be treated as the taxpayer. However, when any member of an affiliated or unitary group that files a consolidated or combined return under this article is allowed to claim credit against its tax liability under this article for payment of any other tax, the amount of credit allowed may not exceed that member's proportionate share of the affiliated or unitary group's precredit tax liability under this article, as shown on its pro forma return.
(g) Consolidated or combined return may be required. -- If any affiliated group has not elected to file a consolidated return, or if any unitary group has not applied for permission to file a combined return, the Tax Commissioner may require such taxpayers to make a consolidated or combined return, as the case may be, in order to clearly reflect their tax base under this article.
§11-28-14. Time and place for paying tax shown on returns.
(a) In general. -- The person required to make the annual return required by this article shall, without assessment or notice and demand from the Tax Commissioner, pay such tax at the time and place fixed for filing the return (determined without regard to any extension of time for filing the return).
(b) Date fixed for payment of tax. -- The date fixed for payment of the taxes imposed by this article shall be deemed to be a reference to the last day fixed for such payment (determined without regard to any extension of time for paying the tax).
§11-28-15. Extensions of time for paying tax.
(a) Amount determined on return. -- The Tax Commissioner may extend the time for payment of the amount of the tax shown, or required to be shown, on any return required by this article (or any periodic installment payments), for a reasonable period not to exceed six months from the date fixed for payment thereof.
(b) Amount determined as deficiency. -- Under regulations prescribed by the Tax Commissioner, he or she may extend the time for the payment of the amount determined as a deficiency of the taxes imposed by this article for a period not to exceed eighteen months from the date fixed for payment of the deficiency. In exceptional cases, a further period of time not to exceed twelve months may be granted. An extension under this subsection (b) may be granted only where it is shown to the satisfaction of the Tax Commissioner that payment of a deficiency upon the date fixed for the payment thereof will result in undue hardship to the taxpayer.
(c) No extension for certain deficiencies. -- No extension shall be granted under this section for any deficiency if the deficiency is due to negligence, to intentional disregard of rules, or to fraud with intent to evade tax.
§11-28-16. Declaration and payment of estimated tax.
(a) Requirement of declaration. -- Every taxpayer subject to tax under this article shall file a declaration of estimated tax for the taxable year if the taxpayer's liability for tax under this article can reasonably be expected to exceed twelve thousand dollars for the taxable year. A taxpayer not required by this section to file a declaration and pay estimated tax may elect to so file and pay.
(b) Definition of estimated tax. -- The term "estimated tax" means the amount which a taxpayer estimates to be his, her or its liability under this article for the taxable year.
(c) Contents of declaration. -- The declaration shall contain such information as the Tax Commissioner may, by rules or regulations, require, including, but not limited to, such detailed information as may be necessary to estimate the taxpayer's liability under section eight of this article.
(d) Time for filing declaration. -- A declaration of estimated tax shall be filed on or before the fifteenth day of the fourth month of the taxable year.
(e) Amendment of declaration. -- A taxpayer may amend his, her or its declaration at any time during the taxable year in accordance with regulations prescribed by the Tax Commissioner. If any amendment of a declaration is filed by a taxpayer, the remaining installments, if any, shall be rateably increased or decreased (as the case may be) to reflect any increase or decrease in the estimated tax by reason of such amendment. If any amendment is made after the fifteenth day of the ninth month of the taxable year, any increase in the estimated tax by reason thereof shall be paid at the time of making such amendment.
(f) Payment of estimated tax. -- The estimated tax shall be paid in four equal installments. At the time the declaration of estimated payment is filed, the taxpayer shall pay one fourth of the estimated tax liability for the taxable year. The second, third and fourth installments shall be paid on the following fifteenth day of the sixth, ninth and twelfth months of the taxable year, respectively.
(g) Application to short taxable year. -- This section shall apply to a taxable year of less than twelve months in accordance with regulations of the Tax Commissioner.
(h) Installment paid in advance. -- Any taxpayer may elect to pay any installment of his, her or its estimated tax prior to the date prescribed for its payment.
§11-28-17. Requirements concerning content and signing of returns; notices, records and Statements; criminal penalties; general procedure and administration.

(a) General. -- The Tax Commissioner may prescribe regulations as to the keeping of records, the content and form of returns and Statements, and the filing of copies of federal income tax returns and determinations. The Tax Commissioner may require any person, by regulation or notice served upon such person, to make such returns, render such Statement, or keep such records, as the Tax Commissioner may deem sufficient to show whether or not such person is liable for tax under this article.
(b) Notice of qualification as receiver, etc. -- Every receiver, trustee in bankruptcy, assignee for benefit of creditors, or other like fiduciary shall give notice of his, her or its qualification as such to the Tax Commissioner, as may be required by regulation.
(c) Signing of returns and other documents. -- Any return, Statement or other document required to be made under the provisions of this article shall be signed in accordance with instructions or regulations prescribed by the Tax Commissioner. The fact that an individual's name is signed on the return shall be prima facie evidence that such individual is authorized to sign the return on behalf of the taxpayer. The fact that an individual's name is signed to a return, Statement or other document shall be prima facie evidence for all purposes that the return, Statement or other document was actually signed by that individual. Except as otherwise provided by the Tax Commissioner, any return, declaration or other document required to be made under this article shall contain or be verified by a written declaration that it is made under the penalties of perjury.
(d) Records. -- Every taxpayer liable for reporting or paying taxes under this article shall keep such records, receipts, invoices, and other pertinent papers in such forms as the Tax Commissioner may require. Every taxpayer shall keep such records for not less than three years after the annual return is filed under this article, unless the Tax Commissioner in writing authorizes their earlier destruction. An extension of time for making an assessment shall automatically extend the time period for keeping the records for all years subject to audit covered in the agreement.
(e) Criminal penalties. -- Each and every provision of the "West Virginia tax Crimes and Penalties Act" set forth in article nine of this chapter shall apply to the tax imposed by this article with like effect as if said act were applicable only to the tax imposed by this article and were set forth in extenso in this article.
(f) General procedure and administration. -- Each and every provision of the "West Virginia Tax Procedure and Administration Act" set forth in articles ten and ten-a of this chapter, shall apply to the tax imposed by this article with like effect as if said act were applicable only to the tax imposed by this article and were set forth in extenso in this article.
§11-28-18. Place for filing returns or other documents.
Tax returns, Statements or other documents, or copies thereof, required by this article or by regulations shall be filed with the Tax Commissioner by delivering it, in person or by mail, to his or her office in Charleston, West Virginia: Provided, That the Tax Commissioner may, by regulation, prescribe the place for filing such returns, Statements or other documents, or copies thereof.
§11-28-19. Severability.
If any provision of this article or the application thereof shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder of said article, but shall be confined in its operation to the provision thereof directly involved in the controversy in which such judgment shall have been rendered, and, unless otherwise expressly ordered in such judgment, the applicability of such provision to other persons or circumstances shall not be affected thereby.
§11-28-20. Legislative rules.
The Tax Commissioner shall propose for promulgation pursuant to the provisions of article three, chapter twenty-nine-a of this code such legislative rules as may be necessary to carry out the purposes of this article, including, but not limited to, rules relating to definitions of terms and allocation and apportionment of elements of the tax base.
§11-28-21. Effective date.
The provisions of this article shall take effect on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.
CHAPTER 17A. MOTOR VEHICLE ADMINISTRATION, REGISTRATION,

CERTIFICATE OF TITLE, AND ANTITHEFT PROVISIONS.

ARTICLE 3. ORIGINAL AND RENEWAL OF REGISTRATION; ISSUANCE OF CERTIFICATES OF TITLE.

§17A-3-4a. Prospective termination of tax.
The tax imposed in section four of this article is repealed effective on the first day of January of the first year following the year in which the voters ratify the Fair Taxation Amendment to the Constitution of this State.



NOTE: The purpose of this bill is to rewrite the tax laws of the State to become effective upon the voters' ratification of the Fair Taxation Amendment to the Constitution of West Virginia.



§§11-1C-1c; 11-5-15; 11-6D-9; 11-8-1a, 2a, 3a and 23a; §11-10-11b; 11-13C-17; 11-13D-11; 11-13E-8; 11-13F-6;11-13G-6; 11-13J-13; 11-13K-7; 11-13N-13; 11-13Q-22; 11-13R-13; 11-13S-11; 11-15-34; 11-15A-30; 11-19-13; 11-21-8i; and 96; 11-23-29; 11-24-23h and 43; 11-27-37; and 17A-3-4a are new; therefore strike-throughs and underscoring have been omitted.

§11-12-75 has been completely rewritten; therefore, strike-throughs and underscoring have been omitted.

Article 5B, Chapter 7; Article 13C, Chapter 8; Articles 15C, 21A and 28, Chapter 11 are new; therefore, strike-throughs and underscoring have been omitted.
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