H. B. 2824


(By Delegates Armstead and Harrison)
[Introduced February 18, 1999; referred to the
Committee on Education then Finance.]




A BILL to amend and reenact section eight, article twenty-one, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to providing for a tax credit for educational expenses incurred for school age children.

Be it enacted by the Legislature of West Virginia:
That section eight, article twenty-one, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-8. Credits against tax.
(a) Business and occupation tax credit. -- A credit shall be allowed against the tax imposed by section three of this article equal to the amount of the liability of the taxpayer for the taxable year for any tax imposed under article thirteen, chapter eleven of this code: Provided, That the amount of such business and occupation tax credit shall not exceed the portion of the tax imposed by this article which is attributable to the West Virginia taxable income derived by the taxpayer for the taxable year from the business or occupation with respect to which said tax under article thirteen was imposed. In case the West Virginia taxable income of a taxpayer includes income from a partnership, estate, trust or a corporation electing to be taxed under subchapter S of the Internal Revenue Code of 1954, as amended, a part of any tax liability of the partnership, estate, trust or corporation under said article thirteen shall be allowed to the taxpayer, in computing the credit provided for by this section, in an amount proportionate to the income of such partnership, estate, trust or corporation, which is included in the taxpayer's West Virginia taxable income.
For purposes of this section, the tax imposed under article thirteen, chapter eleven of this code shall be the amount of the liability of the taxpayer for such tax under said article thirteen computed without reduction for the tax credit for industrial expansion or revitalization allowed for such year.
(b) Severance tax credit. -- On and after the first day of July, one thousand nine hundred eighty-seven, a credit shall be allowed against the tax imposed by section three of this article equal to the amount of the liability of the taxpayer for the taxable year for any tax imposed under article thirteen-a, chapter eleven of this code: Provided, That the amount of such severance tax credit shall not exceed the portion of the tax imposed by this article which is attributable to the West Virginia taxable income derived by the taxpayer for the taxable year from the activities with respect to which said tax under article thirteen-a was imposed. In case the West Virginia taxable income of a taxpayer includes income from a partnership, estate, trust or a corporation electing to be taxed under subchapter S of the Internal Revenue Code of 1954, as amended, a part of any tax liability of the partnership, estate, trust or corporation under said article thirteen-a shall be allowed to the taxpayer, in computing the credit provided for by this section, in an amount proportionate to the income of such partnership, estate, trust or corporation, which is included in the taxpayer's West Virginia taxable income.
(c) Expiration of credit. -- The credit authorized in subsection (b) of this section shall expire and not be authorized or allowed for any taxable year beginning on or after the first day of October, one thousand nine hundred ninety.
(d) Educational expenses for school age children. -- A credit shall be allowed against the tax imposed by section three of this article for expenditures by individuals toward educational expenses for a child living in the household who is claimed by the individual taxpayer as a dependent, of fifty percent of the total amount expended for educational purposes up to one thousand dollars: Provided, That this subsection does not apply unless the tax paid in the applicable year is equal to or greater than the tax credit claimed under this section. The credit provided for hereunder applies to the following:
(1) Direct monetary contributions to a child's school, whether private or public;
(2) Funds expended for tutoring services;
(3) Funds expended for purchase or lease of a home computer: Provided, That the computer so purchased or leased must be shown to be primarily for the use of the student;
(4) Funds expended for uniforms the student is required to wear in public or private schools;
(5) Text books required for public, private, or home-based schooling;
(6) Tuition for the student to attend a private school; and
(7) Such other expenses allowed by the tax department: Provided, That the department shall propose legislative rules that further define expenditures that apply to the credit provided for herein.



NOTE: The purpose of this section is to provide a tax credit for expenditures made toward educational purposes for school children.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.