H. B. 4665
(By Delegates Modesitt, Azinger,
Border and Anderson)
[Introduced February 24, 2000; referred to the
Committee on Finance.]
A BILL to amend and reenact section six, article thirteen-j,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to credits
against personal income tax to persons receiving wage,
salary or other compensation or income from any source who
contribute to a neighborhood investment program.
Be it enacted by the Legislature of West Virginia:
That section six, article thirteen-j, 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 13J. NEIGHBORHOOD INVESTMENT PROGRAM.
§11-13J-6. Application of annual credit allowance.
(a) In general. -- The aggregate annual credit allowance for
a current tax year is an amount equal to the sum of the
(1) The portion allowed under section five of this article for an eligible contribution placed into service or use during a
prior tax year; plus
(2) The portion allowed under section five of this article
for an eligible contribution placed into service or use during
the current tax year.
(b) Application of credit allowance. -- The amount
determined under subsection (a) of this section shall be allowed
as a credit for tax years ending on and after the first day of
July, one thousand nine hundred ninety-six, as follows:
(1) Business franchise taxes. --
The amount determined under subsection (a) of this section
shall be applied to reduce up to fifty percent of the taxes
imposed by article twenty-three of this chapter for the tax year
(determined after application of the credits against tax provided
in section seventeen of said article, but before application of
any other allowable credits against tax).
(2) Corporation net income taxes. -- After application of
subdivision (1) of this subsection, any unused credit shall next
be applied to reduce up to fifty percent of the taxes imposed by
article twenty-four of this chapter, for the tax year (determined
before application of allowable credits against tax).
(3) Personal income taxes. --
(A) If the eligible taxpayer is an electing small business
corporation (as defined in Section 1361 of the United States Internal Revenue Code), a limited liability company treated as a
partnership for purposes of the federal income tax, a partnership
or a sole proprietorship, then any unused credit (after
application of subdivisions (1) and (2) of this subsection) shall
be allowed as a credit against up to fifty percent of the taxes
imposed by article twenty-one of this chapter on income of
proprietors, partners or shareholders, subject to the limitations
set forth in parts (B) and (C) of this subdivision.
(B) Electing small business corporations, partnerships and
other unincorporated organizations shall allocate the credit
allowed by this article among the members thereof in the same
manner as profits and losses are allocated for the tax year.
No credit may be allowed under this section against any
tax due under article twenty-one of this chapter on any wage,
salary or other compensation paid to any employee of any electing
small business corporation, limited liability company,
partnership, other unincorporated organization or sole
proprietorship or against any amount of tax due on any wage,
salary or other compensation reported on federal form W2, Any
taxpayer subject to the individual income tax under article
twenty-one of this chapter who makes an eligible contribution to
a qualified charitable organization and receives from that
organization a properly completed Form WV/NIPA-1, Neighborhood
Investment Program Tax Credit Voucher, is eligible to claim that credit. The credit shall be allowed without regard to the source
of the income, whether it is from wages, passive investment or
retirement income, income from a trade or business or any other
source. Any taxpayer who is eligible for this annual credit
allowance as a result of this amendment to this section may apply
for and be eligible for the tax credit provided for by this
article for all years to the inception of the program in the year
one thousand nine hundred ninety-six, subject only to the
applicable statute of limitations for claiming this tax credit.
(c) Unused credit forfeited. -- If any credit to an eligible
taxpayer remains after application of subsections (a) and (b) of
this section, the amount thereof may be carried forward no more
than four years from the tax year in which the contribution was
made. Unused credits of an eligible taxpayer may not be carried
forward beyond the time limits imposed under section five of this
article and the total maximum aggregate tax credits certified in
any state fiscal year may not exceed two million dollars.
(d) Addition of deductions, decreasing adjustments or
decreasing modifications taken in determining taxable income for
which credit is taken. -- Any deduction, decreasing adjustment or
decreasing modification taken by any taxpayer in determining
federal taxable income which affects West Virginia taxable income
or in determining West Virginia taxable income under article
twenty-one or twenty-four of this chapter for the taxable year for any charitable contribution, or payment or portion thereof,
which qualifies as an eligible contribution under this article
and for which credit is claimed, shall be added to West Virginia
taxable income in determining the tax liability of the taxpayer
under article twenty-one or twenty-four of this chapter, as
appropriate, before application of the credit allowed under this
article for the taxable year.
(e) Annual limit. -- The aggregate annual credit allowance
to any taxpayer may not exceed one hundred thousand dollars in
any tax year.
NOTE: The purpose of this bill is to permit credits against
personal income tax to persons, receiving wage, salary or other
compensation or income from any source and who contribute to a
neighborhood investment program.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.