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Introduced Version Senate Bill 448 History

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Senate Bill No. 448

(By Senators Edgell, Beach and Barnes)

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[Introduced February 7, 2011; referred to the Committee on the Judiciary; and then to the Committee on Finance.]

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A BILL to amend and reenact §11-24-11b of the Code of West Virginia, 1931, as amended, relating to the corporation net income tax; credit for utility taxpayers with net operating loss carryovers; and providing a different procedure for determining the credit.

Be it enacted by the Legislature of West Virginia:

    That §11-24-11b of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:

ARTICLE 24. CORPORATION NET INCOME TAX.

§11-24-11b. Credit for utility taxpayers with net operating loss carryovers.

    (a) General. -- There shall be allowed to every eligible taxpayer a nonrefundable credit against its primary tax liability imposed under this article for any net operating loss carryovers that exist as of December 31, 2006.

    (b)(1) "Eligible taxpayer" means any person subject to the business and occupation taxes prescribed by article thirteen of this chapter and exercising any privilege taxable under section two-o of this article.

    (2) “Eligible taxpayer” also includes an affiliated group of taxpayers if:

    (A) For tax years beginning on or before December 31, 2008, the group elects to file a consolidated corporation net income tax return under this article if one or more affiliates included in the affiliated group would qualify as an eligible taxpayer under subdivision (1) of this subsection; or

    (B) For tax years beginning on or before January 1, 2009, the group is required to file a combined corporate net income tax return under this article if one or more affiliated included in the affiliated group would qualify as an eligible taxpayer under subdivision (1) of this subsection.

    (c) Amount of credit. -– The amount of credit allowed shall be equal to one-quarter percent of the remaining current balance of the eligible taxpayer’s West Virginia net operating loss carryovers allowed by subsection (d), section six of this article that exist existed as of December 31, 2006, decreased by the net operating loss used or applied in each tax year beginning on or after January 1, 2007. Effective for tax years beginning on or after January 1, 2009, the amount of credit allowed shall be equal to the difference between the current year tax rate as defined by section four of this article and nine percent of the remaining balance of the eligible taxpayer’s West Virginia net operating loss carryovers allowed by subsection (d), section six of this article that existed as of December 31, 2006, decreased by net operating loss used or applied in each tax year beginning on or after January 1, 2007.

    (d) Application of credit. -– The amount of credit allowed shall be taken against the tax liabilities of the eligible taxpayer under this article as shown on its annual return for the taxable tax year in which its net operating loss carryovers are utilized, as provided in subsection (d), section six of this article. Any credit remaining after application against the eligible taxpayer’s tax liabilities for the current year may be carried forward to subsequent tax years until used the tax year when the remaining current balance of the eligible taxpayer's West Virginia net operating loss carryovers allowed by subsection (d), section six of this article that existed as of December 3l, 2006, decreased by net operating loss used or applied in each tax year beginning on or after January 1, 2007, which is zero. For purposes of determining the remaining current balance of the eligible taxpayer’s West Virginia net operating loss allowed by subsection (d), section six of this article that existed as of December 31, 2006, decreased by net operating loss used or applied in each tax year beginning on or after January 1, 2007 under this section, a first in, first out, net operating loss usage computation shall apply.



    NOTE: The purpose of this bill is to provide a different procedure for determining the credit for utility taxpayers with net operating loss carryovers relating to the corporation net income tax.


    Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

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