COMMITTEE SUBSTITUTE
FOR
H.
B.
4150
(By Delegate Kiss)
(Originating in the Committee on Finance.)
[February 25, 1994]
A BILL to amend article twenty-one, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new section, designated section fifteen-a; and to amend article twenty-four of said chapter by adding thereto a new section, designated section eleven-b, all relating to personal income and corporation net income tax credits and allowing a credit against a taxpayer's tax liability for contributions to community foundations and homeless shelters and services.
Be it enacted by the Legislature of West Virginia:
That article twenty-one, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new section, designated section fifteen-a; and that article twenty-four of said chapter be amended by adding thereto a new section, designated section eleven-b, all to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
§
11-21-15a. Credit for contribution to qualified community
foundation or homeless shelter.
(a)Commencing in the one thousand nine hundred ninety-five tax year and for each tax year thereafter, a taxpayer is allowed a credit, against the tax imposed by the provisions of this article, of fifty percent of the amount the taxpayer contributes during the taxable year to an endowment fund of a community foundation or fifty percent of the cash amount the taxpayer contributes during the taxable year to a shelter for homeless persons, food kitchen, food bank, or other entity, the primary purpose of which is to provide overnight accommodation, food or meals to persons who are indigent if a contribution to that entity is tax deductible for the donor under the Internal Revenue Code of 1986, as amended.
For a taxpayer other than a resident estate or trust, the credit allowed by this section for a contribution to a community foundation shall not exceed one hundred dollars, or two hundred dollars for a husband and wife filing a joint return. For a taxpayer other than a resident estate or trust, a credit not to exceed one hundred dollars, or two hundred dollars for a husband and wife filing a joint return, for total cash contributions made in the tax year to shelters for homeless persons, food kitchens and food banks is also allowed under this section.
For a resident estate or trust, the credit allowed by this section for a contribution to a community foundation shall not exceed ten percent of the taxpayer's tax liability for the tax year before claiming any credits allowed by this section or one thousand dollars, whichever is less. A resident estate or trust may claim an additional credit under this section not to exceed ten percent of the taxpayer's tax liability for the tax year before claiming any credits allowed by this section or one thousand dollars, whichever is less, for total cash contributions made in the tax year to shelters for homeless persons, food banks and food kitchens.
(b) The credits allowed by this section are nonrefundable so that a taxpayer shall not claim under this section a total credit amount that reduces the taxpayer's tax liability to less than zero.
(c) As used in this section, "community foundation" means an organization that applies for certification on or before the first day of April of the tax year for which the taxpayer is claiming the credit and that the department of tax and revenue certifies for that tax year as meeting all of the following requirements:
(1) Qualifies for exemption from federal income taxation under section 501(c)(3) of the Internal Revenue Code of 1986, as amended;
(2) Supports a broad range of charitable activities within a specific geographic area of this state that it serves, including a municipality or county;
(3) Maintains an ongoing program to attract new endowment funds by seeking gifts and bequests from a wide range of potential donors in the community or area served;
(4) Is publicly supported as defined by the regulations of the United States department of the treasury, 26 C.F.R. 1.170A-9(e)(10);
(5) Is not a supporting organization as defined under section 509(a)(3) of the Internal Revenue Code of 1986, as amended, and the regulations of the United States department of the treasury, 26 C.F.R. 1.509(a)-4 and 1.509d(a)-5;
(6) Meets the requirements for treatment as a single entity contained in the regulations of the United States department of the treasury, 26 C.F.R. 1.170A-9(e)(11); and
(7) Is incorporated or established as a trust before the first day of September of the year immediately preceding the tax year for which the credit is claimed.
(d) An entity other than a community foundation may request that the department determine if a contribution to that entity qualifies for the credit under this section. The department shall make a determination and respond to a request no later than thirty days after receipt of the request.
(e) On or before the first day of July of each year in which the credit is operative, the department shall provide the joint committee on government and finance with a report on the total amount of tax credits claimed under this section and shall make recommendations regarding the reform of tax laws that will stimulate charitable giving and be equitable to all community charities.
(f) The amount of any credit for which a taxpayer is eligible to receive under this section shall be reduced by the amount of the reduction in tax liability which is attributable to any deduction from adjusted gross income for the same contribution for which the credit is being applied.
ARTICLE 24. CORPORATION NET INCOME TAX.
§
11
-
24
-
11b. Credit for contributions to community foundations
and homeless shelters.
(a) Commencing in the one thousand nine hundred ninety-five tax year and for each tax year thereafter, a taxpayer who does not claim a credit under the provisions of section fifteen-a, article twenty-one, chapter eleven of this code is allowed a credit, against the tax imposed by the provisions of this article, of fifty percent of the amount the taxpayer contributes during the taxable year to an endowment fund of a community foundation or fifty percent of the cash amount the taxpayer contributes during the taxable year to a shelter for homeless persons, food kitchen, food bank, or other entity, the primary purpose of which is to provide overnight accommodation, food or meals to persons who are indigent if a contribution to that entity is tax deductible for the donor under the Internal Revenue Code of 1986, as amended.
The credit allowed by this section for a contribution to a community foundation shall not exceed five percent of the taxpayer's tax liability for the tax year before claiming any credits allowed by this section or one thousand dollars, whichever is less. A taxpayer may claim a credit under this section not to exceed five percent of the taxpayer's tax liability for the tax year before claiming any credits allowed by this section or one thousand dollars, whichever is less, for total cash contributions made in the tax year to shelters for homeless persons, food kitchens and food banks.
(b) The credits allowed by this section are nonrefundable so that a taxpayer shall not claim under this section a total credit amount that reduces the taxpayer's tax liability to less than zero.
(c) As used in this section, "community foundation" means an organization that applies for certification on or before the first day of April of the tax year for which the taxpayer is claiming the credit and that the department of tax and revenue certifies for that tax year as meeting all of the following requirements:
(1) Qualifies for exemption from federal income taxation under section 501(c)(3) of the Internal Revenue Code of 1986, as amended;
(2) Supports a broad range of charitable activities within a specific geographic area of this state that it serves, including a municipality or county;
(3) Maintains an ongoing program to attract new endowment funds by seeking gifts and bequests from a wide range of potential donors in the community or area served;
(4) Is publicly supported as defined by the regulations of the United States department of the treasury, 26 C.F.R. 1.170A-9(e)(10);
(5) Is not a supporting organization as defined under section 509(a)(3) of the Internal Revenue Code of 1986, as amended, and the regulations of the United States department of the treasury, 26 C.F.R. 1.509(a)-4 and 1.509d(a)-5;
(6) Meets the requirements for treatment as a single entity contained in the regulations of the United States department of the treasury, 26 C.F.R. 1.170A-9(e)(11); and
(7) Is incorporated or established as a trust before the first day of September of the year immediately preceding the tax year for which the credit is claimed.
(d) An entity other than a community foundation may request that the department determine if a contribution to that entity qualifies for the credit under this section. The department shall make a determination and respond to a request no later than thirty days after receipt of the request.
(e) On or before the first day of July of each year in which the credit is operative, the department shall provide the joint committee on government and finance with a report on the total amount of tax credits claimed under this section and shall make recommendations regarding the reform of tax laws that will stimulate charitable giving and be equitable to all community charities.
(f) The amount of any credit for which a taxpayer is eligible to receive under this section shall be reduced by the amount of the reduction in tax liability which is attributable to any deduction from taxable income for the same contribution for which the credit is being applied.