H. B. 4017
(By Delegates Walters, Harrison, Nesbitt and Henderson)
[Introduced January 10, 1996; referred to the
Committee on Finance.]
A BILL to amend and reenact section one, article twenty-one,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; and to further amend
said article by adding thereto two new sections, designated
sections four-g and four-h, all relating to legislative
findings; exempting persons from income tax who make ten
thousand dollars or less annually; and providing for a five
percent tax reduction to all other personal income and
corporate net income tax rates.
Be it enacted by the Legislature of West Virginia:
That section one, article twenty-one, chapter eleven of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted; and that said article be further amended by adding thereto two new sections, designated
sections four-g and four-h, all to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
PART I. GENERAL.
§11-21-1. Legislative findings.
(a) The Legislature hereby finds and declares that the
adoption by this state for its personal 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.
(b) The Legislature further finds and declares that tax
policy is a legitimate instrument for state government to utilize
in efforts to stimulate small business and that too often the tax
policies in force have had an opposite effect.
(c) The Legislature further recognizes that the level of
poverty in this state is among the highest in the country while
per capita income is among the lowest and that reducing the
personal income tax will serve to reverse these troubling statistical trends.
(d) The Legislature further finds and declares that in order
to provide tax relief to small businesses and individuals in this
state that any reduction in income taxes must be accompanied with
a commensurate reduction in the state budget.
(e) The Legislature further finds and declares that persons
who earn no more than ten thousand dollars a year should not be
required to pay income tax as the administrative costs involved
in collecting tax from these individuals far outweigh any
legitimate purpose or fiscal benefit achieved by the collection
(f) The Legislature further finds and declares that an
across the board income tax cut of five percent would
significantly stimulate the growth of small business, help toward
the creation of jobs and render relief to those citizens of this
state who are in need of financial relief.
The Legislature does, therefore, declare that this article
be construed so as to accomplish the foregoing purposes.
§11-21-4g. No tax to be levied on personal adjusted gross income
of ten thousand dollars or less; five percent
reduction in all other income levels.
For taxable years ending on and after the first day of
January, one thousand nine hundred ninety-five, any resident individual of this state whose adjusted gross income is ten
thousand dollars or less shall not be required to pay any amount
in personal income tax to the state notwithstanding any other
provision of law to the contrary.
There shall also be a five percent reduction in all other
personal income tax rates for taxable years ending on and after
the first day of January, one thousand nine hundred ninety-five.
§11-21-4h. Rate of tax -- Taxable years beginning on or after
January 1, 1995.
(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 $10,0000% of the taxable income
Over $10,000 but not$285.00 plus 3.8% of excess
over $25000over $10,000
Over $25,000 but not$855.00 plus 4.275% of excess
over $40,000over $25,000
Over $40,000 but not$1,496.25 plus 5.7% of excess
over $60,000over $40,000
Over $60,000$2,636.25 plus 6.175% of excess
(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
If the West Virginia
taxable income is:The tax is:
Not over $5,0000% of the taxable income
Over $5,000 but not4% of excess
over $12,500over $10,000
Over $12,500 but not$95.00 plus 4.275% of
over $20,000excess over $12,500
Over $20,000 but not$415.63 plus 5.7% of
over $30,000excess over $20,000
Over $30,000$985.63 plus 6.175% of
excess over $30,000
Applicability of this section.
-- The provisions of this section, as amended by this article, shall be applied to
determine the rate of tax imposed by this article for all taxable
periods or portions thereof beginning after the first day of
January, one thousand nine hundred ninety-five.
NOTE: The purpose of this bill is to exempt West Virginia
residents who have an adjusted gross income of ten thousand
dollars or less from paying state income tax. The bill also
provides that all other personal taxpayers receive a five percent
across the board tax reduction. It includes legislative findings
that support the tax reductions.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§§11-21-4g and 4h are new; therefore, strike-throughs and
underscoring are omitted.