Senate Bill No. 20

(By Senators Scott, Yoder and Minear)

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[Introduced January 10, 1996; referred to the Committee
on Finance.]
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A BILL to amend and reenact sections fourteen and fifteen,
article twenty-one, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended , all relating to personal income tax; reinstituting a West Virginia standard deduction of a resident individual; amount of standard deduction; standard deduction where husband and wife determine income separately; reinstituting the West Virginia itemized deduction of a resident individual; taxpayer's election; modifications reducing federal itemized deductions; modifications for partnerships; and effective date.

Be it enacted by the Legislature of West Virginia:
That sections fourteen and fifteen, article twenty-one, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.

§11-21-14. West Virginia standard deduction of a resident

individual.
(a) General. -- The West Virginia standard deduction of a resident individual, or of husband and wife whose West Virginia taxable income is determined jointly, shall be ten per centrum of West Virginia adjusted gross income or one thousand dollars, whichever is less.
(b) Husband and wife determining income separately. -- The West Virginia standard deductions of husband and wife whose West Virginia taxable incomes are determined separately (whether or not on a single form) shall not exceed ten per centrum of the aggregate of their separate West Virginia adjusted gross incomes or one thousand dollars, whichever is less, but may be taken by either or divided between them in such proportions as they may elect.
(c) Expiration Effective Date. -- The West Virginia standard deduction provided in this section shall not apply applies to taxable years beginning after the thirty-first day of December, one thousand nine hundred eighty-six ninety-five.
§11-21-15. West Virginia itemized deduction of a resident individual.

(a) General. -- If federal taxable income of a resident individual is determined by itemizing deductions from his federal adjusted gross income, he may elect to deduct his West Virginia itemized deduction in lieu of his West Virginia standard deduction. The West Virginia itemized deduction of a resident individual means the total amount of his deductions from federal adjusted gross income, other than federal deductions for personal exemptions, as provided in the laws of the United States for the taxable year with the modifications specified in this section.
(b) Husband and wife. -- (1) A husband and wife, both of whom are required to file returns under this article, shall be allowed West Virginia itemized deductions only if both elect to take West Virginia itemized deductions.
(2) The total of the West Virginia itemized deductions of a husband and wife whose federal taxable income is determined on a joint return, but whose West Virginia taxable incomes are determined separately, may be taken by either or divided between them in such proportions as they may elect.
(c) Modifications reducing federal itemized deductions. -- The total amount of deductions from federal adjusted gross income shall be reduced by the amount of such federal deductions for:
(1) Income taxes imposed by this state or any other taxing jurisdiction; and
(2) Interest on indebtedness incurred or continued to purchase or carry obligations or securities the income from which is exempt from tax under this article.
(d) Partners. -- The amounts of modifications under subsection (c) above required to be made by a partner with respect to items of deduction of a partnership shall be determined under section seventeen of this article.
(e) Expiration Effective Date. -- The West Virginia itemized deduction provided in this section shall not apply applies to taxable years beginning after the thirty-first day of December, one thousand nine hundred eighty-six ninety-five.




NOTE: The purpose of this bill is to reinstitute the standard and itemized deduction for personal income tax in West Virginia.

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