H. B. 2699
(By Delegates Collins, Davis,
Pettit and Thomas)
[Introduced March 24, 1997; referred to the
Committee on Finance.]
A BILL to amend and reenact section twelve, 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 a new section, designated
section twelve-c, all relating to creating an exemption from
gross income for volunteer fire, rescue or emergency medical
services personnel; providing for qualifications for
volunteer fire, rescue or emergency medical services
personnel; setting forth related requirements for volunteer
fire, rescue or emergency medical services organizations;
setting forth related requirements for volunteer fire,
rescue or emergency medical services members; requiring the
state fire commission to report participation in the point
system; prohibiting false statements; and imposing a penalty
for making a false statement.
Be it enacted by the Legislature of West Virginia:
That section twelve, 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
twenty-one be further amended by adding thereto a new section,
designated section twelve-c, to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-12. West Virginia adjusted gross income of resident
individual.
(a) General. -- The West Virginia adjusted gross income of
a resident individual means his federal adjusted gross income as
defined in the laws of the United States for the taxable year
with the modifications specified in this section.
(b) Modifications increasing federal adjusted gross income.
-- There shall be added to federal adjusted gross income unless
already included therein the following items:
(1) Interest income on obligations of any state other than
this state or of a political subdivision of any other state
unless created by compact or agreement to which this state is a
party;
(2) Interest or dividend income on obligations or securities
of any authority, commission or instrumentality of the United
States, which the laws of the United States exempt from federal income tax but not from state income taxes;
(3) Any deduction allowed when determining federal adjusted
gross income for federal income tax purposes for the taxable year
that is not allowed as a deduction under this article for the
taxable year;
(4) Interest on indebtedness incurred or continued to
purchase or carry obligations or securities the income from which
is exempt from tax under this article, to the extent deductible
in determining federal adjusted gross income;
(5) Interest on a depository institution tax-exempt savings
certificate which is allowed as an exclusion from federal gross
income under Section 128 of the Internal Revenue Code, for the
federal taxable year;
(6) The amount of a lump sum distribution for which the
taxpayer has elected under Section 402(e) of the Internal Revenue
Code of 1986, as amended, to be separately taxed for federal
income tax purposes; and
(7) Amounts withdrawn from a medical savings account
established by or for an individual under section twenty, article
fifteen or section fifteen, article sixteen, both of chapter
thirty-three of this code, that are used for a purpose other than
payment of medical expenses, as defined in those sections.
(c) Modifications reducing federal adjusted gross income. --
There shall be subtracted from federal adjusted gross income to the extent included therein:
(1) Interest income on obligations of the United States and
its possessions to the extent includable in gross income for
federal income tax purposes;
(2) Interest or dividend income on obligations or securities
of any authority, commission or instrumentality of the United
States or of the state of West Virginia to the extent includable
in gross income for federal income tax purposes but exempt from
state income taxes under the laws of the United States or of the
state of West Virginia, including federal interest or dividends
paid to shareholders of a regulated investment company, under
Section 852 of the Internal Revenue Code for taxable years ending
after the thirtieth day of June, one thousand nine hundred
eighty-seven;
(3) Any amount included in federal adjusted gross income for
federal income tax purposes for the taxable year that is not
included in federal adjusted gross income under this article for
the taxable year;
(4) The amount of any refund or credit for overpayment of
income taxes imposed by this state, or any other taxing
jurisdiction, to the extent properly included in gross income for
federal income tax purposes;
(5) Annuities, retirement allowances, returns of
contributions and any other benefit received under the West Virginia public employees retirement system, the West Virginia
state teachers retirement system and all forms of military
retirement, including regular armed forces, reserves and national
guard, including any survivorship annuities derived therefrom, to
the extent includable in gross income for federal income tax
purposes: Provided, That notwithstanding any provisions in this
code to the contrary this modification shall be limited to the
first two thousand dollars of benefits received under the West
Virginia public employees retirement system, the West Virginia
state teachers retirement system and all forms of military
retirement including regular armed forces, reserves and national
guard, including any survivorship annuities derived therefrom, to
the extent includable in gross income for federal income tax
purposes for taxable years beginning after the thirty-first day
of December, one thousand nine hundred eighty-six; and the first
two thousand dollars of benefits received under any federal
retirement system to which Title 4 U.S.C. §111 applies:
Provided, however, That the total modification under this
paragraph shall not exceed two thousand dollars per person
receiving retirement benefits and this limitation shall apply to
all returns or amended returns filed after the last day of
December, one thousand nine hundred eighty-eight;
(6) Retirement income received in the form of pensions and annuities after the thirty-first day of December, one thousand
nine hundred seventy-nine, under any West Virginia police, West
Virginia firemen's retirement system or the West Virginia
department of public safety death, disability and retirement
fund, including any survivorship annuities derived therefrom, to
the extent includable in gross income for federal income tax
purposes;
(7) Federal adjusted gross income in the amount of eight
thousand dollars received from any source after the thirty-first
day of December, one thousand nine hundred eighty-six, by any
person who has attained the age of sixty-five on or before the
last day of the taxable year, or by any person certified by
proper authority as permanently and totally disabled, regardless
of age, on or before the last day of the taxable year, to the
extent includable in federal adjusted gross income for federal
tax purposes: Provided, That if a person has a medical
certification from a prior year and he is still permanently and
totally disabled, a copy of the original certificate is
acceptable as proof of disability. A copy of the form filed for
the federal disability income tax exclusion is acceptable:
Provided, however, That:
(i) Where the total modification under subdivisions (1),
(2), (5) and (6) of this subsection is eight thousand dollars per person or more, no deduction shall be allowed under this
subdivision; and
(ii) Where the total modification under subdivisions (1),
(2), (5) and (6) of this subsection is less than eight thousand
dollars per person, the total modification allowed under this
subdivision for all gross income received by that person shall be
limited to the difference between eight thousand dollars and the
sum of modifications under subdivisions (1), (2), (5) and (6) of
this subsection;
(8) Federal adjusted gross income in the amount of eight
thousand dollars received from any source after the thirty-first
day of December, one thousand nine hundred eighty-six, by the
surviving spouse of any person who had attained the age of
sixty-five or who had been certified as permanently and totally
disabled, to the extent includable in federal adjusted gross
income for federal tax purposes: Provided, That:
(i) Where the total modification under subdivisions (1),
(2), (5), (6) and (7) of this subsection is eight thousand
dollars or more, no deduction shall be allowed under this
subdivision; and
(ii) Where the total modification under subdivisions (1),
(2), (5), (6) and (7) of this subsection is less than eight
thousand dollars per person, the total modification allowed under
this subdivision for all gross income received by that person shall be limited to the difference between eight thousand dollars
and the sum of subdivisions (1), (2), (5), (6) and (7) of this
subsection;
(9) Contributions from any source to a medical savings
account established by or for the individual pursuant to section
twenty, article fifteen or section fifteen, article sixteen,
chapter thirty-three of this code, plus interest earned on the
account, to the extent includable in federal adjusted gross
income for federal tax purposes: Provided, That the amount
subtracted pursuant to this subdivision for any one taxable year
may not exceed two thousand dollars plus interest earned on the
account. For married individuals filing a joint return, the
maximum deduction is computed separately for each individual; and
(10) An amount equal to three thousand dollars if an
individual is a qualifying volunteer fire, rescue or emergency
services member for the taxable year, as determined under section
twelve-c of this article; and
(10) (11) Any other income which this state is prohibited
from taxing under the laws of the United States.
(d) Modification for West Virginia fiduciary adjustment. --
There shall be added to or subtracted from federal adjusted gross
income, as the case may be, the taxpayer's share, as beneficiary
of an estate or trust, of the West Virginia fiduciary adjustment determined under section nineteen of this article.
(e) Partners and S corporation shareholders. -- The amounts
of modifications required to be made under this section by a
partner or an S corporation shareholder, which relate to items of
income, gain, loss or deduction of a partnership or an S
corporation, shall be determined under section seventeen of this
article.
(f) Husband and wife. -- If husband and wife determine their
federal income tax on a joint return but determine their West
Virginia income taxes separately, they shall determine their West
Virginia adjusted gross incomes separately as if their federal
adjusted gross incomes had been determined separately.
(g) Effective date. -- Changes in the language of this
section enacted in the year one thousand nine hundred ninety-six
shall apply to taxable years beginning after the thirty-first day
of December, one thousand nine hundred ninety-five.
§11-21-12c. Volunteer emergency service exemption.
(a) An individual shall subtract from gross income an amount
equal to three thousand dollars if an individual is a qualifying
volunteer fire, rescue or emergency medical services member for
the taxable year, as determined under subsection (b) of this
section.
(b) An individual is a qualifying volunteer fire, rescue or emergency medical services member for the taxable year eligible
for the subtraction modification under this subsection if the
individual:
(1) Is an active member of a bona fide West Virginia fire,
rescue or emergency medical services organization;
(2) Serves the organization in a volunteer capacity without
compensation, except nominal expenses or meals; and
(3) Qualifies for active status during the taxable year
under:
(A) A volunteer fire, rescue or emergency medical services
personnel length of service award program operated by a county or
municipal corporation of the state, if the length of service
award program requires for active status qualification a minimum
of fifty points per year and that points be earned in at least
two different categories; or
(B) A point system established by a county or municipal
corporation that does not operate a volunteer fire, rescue or
emergency medical services personnel length of service award
program, to identify active volunteer fire, rescue or emergency
medical services members, if the point system requires for active
status qualification a minimum of fifty points per year and that
points be earned in at least two different categories; or
(C) Has maintained active status for at least twenty-five
years under a volunteer fire, rescue or emergency medical services personnel length of service award program or a point
system established in lieu of a length of service award program;
and
(4) Will have been an active member of a bona fide West
Virginia fire, rescue or emergency medical services organization
for at least seventy-two months during the last ten calendar
years by the thirty-first day of December of the taxable year.
(c) Each fire, rescue or emergency medical services
organization shall:
(1) Maintain a record of the points earned by each
individual during each calendar year;
(2) Provide each member a report identifying the number of
points earned in each category by the fifteenth day of February
of the following year; and
(3) Provide a report that includes the names, social
security numbers, and points earned by those members qualifying
for the subtraction modification under this section to the West
Virginia state firemen's association by the first day of May of
the following year.
(d) To qualify for the subtraction modification under this
subsection, an individual shall attach to the individual's income
tax return a copy of the report provided by the organization
under subdivision (3) of subsection (c) of this section.
(e) On or before the first day of October of each year, state fire commission shall submit to the department of public
safety and correctional services and the office of the state
auditor a report stating the participation in the point system by
the various local subdivisions with the names and social security
numbers of individuals who qualified for the subtraction
modification under this subsection for the preceding taxable
year.
(f) A person may not knowingly make or cause any false
statement or report to be made in any application or in any
document required under this subsection. Any person who violates
or attempts to violate this provision shall be subject to a fine
of one thousand dollars.
NOTE: The purpose of this bill is to create an exemption of
$3,000 for voluntary fire, rescue or emergency medical services
personnel.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§11-21-12c is new; therefore, strike-throughs and
underscoring have been omitted.