H. B. 2719


(By Delegates Nesbitt and Vest)
[Introduced March 25, 1993; referred to the
Committee on Finance.]




A BILL to amend chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article designated article thirteen-i, relating to job tax credits for small businesses; providing a short title; defining certain terms; providing legislative findings; and providing for a credit against certain taxes for small businesses which employ new employees.

 Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article thirteen-i to read as follows:
ARTICLE 13I. JOB TAX CREDIT FOR SMALL BUSINESS.

§11-13I-1. Short title.

This article may be cited as the "Job Tax Credit for Small Businesses Act."
§11-13I-2. Legislative finding and purpose.

The Legislature finds that the encouragement of economic growth and development in this state is in the public interest and promotes the general welfare of the people of this state. In order to encourage job creation in businesses in this state and thereby increase employment and economic development, there is hereby provided a jobs tax credit for small businesses.
§11-13I-3. Definitions.

(a) General. -- When used in this article, or in the administration of this article, terms defined in subsection (b) shall have the meanings ascribed to them by this section, unless a different meaning is clearly required by either the context in which the term is used, or by specific definition, in this article.
(b) Terms defined.
(1) Business. -- The term "business" means any activity taxed under the provisions of article thirteen, thirteen-a, thirteen-b twenty-one, twenty-three and twenty-four of this chapter (or any one or combination of such articles of this chapter) and which is engaged in by any person in this state.
(2) Commissioner or tax commissioner. -- The terms "commissioner" and "tax commissioner" are used interchangeably herein and mean the tax commissioner of the state of West Virginia, or his or her designee.
(3) Compensation. -- The term "compensation" means wages, salaries, commissions and any other form of remuneration paid to employees for personal services.
(4) Corporation. -- The term "corporation" means any corporation, joint-stock company or association, and any business conducted by a trustee or trustees wherein interest or ownership is evidenced by a certificate of interest or ownership or similar written instrument.
(5) Eligible taxpayer. -- The term "eligible taxpayer" means any person subject to the taxes imposed by articles twenty-one and twenty-four of this chapter (or any one or combination of such articles of this chapter) with less than ninety-nine employees. "Eligible taxpayer" shall also include an affiliated group of taxpayers if such group elects to file a consolidated corporation net income tax return under article twenty-four of this chapter if the total number of employees of the consolidated corporation does not exceed ninety-nine.
(6) New employee. -- The term "new employee" means a person residing and domiciled in this state, hired by the taxpayer to fill a position for a job in this state, which has not existed in the business enterprise in this state at anytime during the previous twenty-four months. The number of new employees allowed for purposes of this credit may not exceed five. A person is a "new employee" if the person is employed a minimum of ninety days or completes two hundred forty hours of work for wages and the person's duties in connection with the operation of the business enterprise are on:
(A) A regular, full-time and permanent basis.
(i) "Full-time employment" means employment for at least onehundred twenty hours per month at a wage not less than the prevailing state or federal minimum wage, depending on which minimum wage provision is applicable to the business.
(ii) "Permanent employment" does not include employment that is temporary or seasonal.
(B) A part-time basis, provided such person is customarily performing such duties at least twenty hours per week for at least six months during the taxable year.
(7) New job. -- The term "new job" means a job which did not exist in the business of the taxpayer in this state at any time during the previous twenty-four months and which is filled by a new employee.
(8) 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, and which is not a trust or estate, a corporation or a sole proprietorship. The term "partner" includes a member in such a syndicate, group, pool, joint venture or organization.
(9) Person. -- The term "person" includes any natural person, corporation or partnership.
§11-13I-4. Amount of credit allowed.

(a) Credit allowed. -- Eligible taxpayers shall be allowed a credit against the portion of taxes imposed by this state that are attributable to and the consequence of the taxpayer's new or expanded business in this state, which results in the creation ofnew jobs. The amount of this credit shall be determined and applied as provided in subsection (b) of this section.
(b) Amount of credit. -- The amount of credit allowable is one dollar per hour of wages paid to not more than five new employees each year not to exceed two thousand dollars a year for each new employee.
The provisions of this article are not effective after the thirty-first day of December, one thousand nine hundred ninety- five.



NOTE: The purpose of this bill is to provide a tax credit for small business in this state. The tax credit is based on the number of new employees employed by the small business and it provides a credit of one dollar of wages per hour paid to not more than five new employees not to exceed a credit of two thousand dollars for each new employee in any one year. The provisions of this bill expire December 31, 1995.

This article is new; therefore, strike-throughs and underscoring have been omitted.