hb3099 intr

H. B. 3099

(By Delegates Swartzmiller, Michael,

Varner, Ennis and Mezzatesta)

[Introduced March 29, 2001; referred to the

Committee on Finance.]

A BILL to amend chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article twenty-eight, relating to allowing a tobacco access control tax credit against the personal income tax, the corporate net income tax and the business franchise tax.

Be it enacted by the Legislature of West Virginia:

That chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article twenty-eight, to read as follows:
ARTICLE 28. TOBACCO ACCESS CONTROL TAX CREDIT.
§11-28-1. Short title.

This article may be known and cited as the "Tobacco Access Control Tax Credit Act."
§11-28-2. Definitions.

The following words and phrases when used in this article have the meanings given to them in this section unless the context clearly indicates otherwise:

(1) "Division" means the tax division of the department of tax and revenue.

(2) "Qualified tax liability" means the liability for taxes imposed under article twenty-one, twenty-three or twenty-four of this chapter.

(3) "Qualified tobacco access control expense" means that expense incurred by a taxpayer for the purchase and use of technology intended to control the access of minors to cigarettes and which is capable of:

(A) Capturing the information from a bar code or magnetic strip on a driver's license or identification card issued by the division of motor vehicles;

(B) Producing a declaration of age in print form and storing a record of the event in memory;

(D) Reporting a history of the events, including the ability to transfer the data for archiving and data base development purposes; and

(E) Storing at least one thousand events at any time before data is transferred.

(4) "Taxpayer" means an entity licensed by the division to sell cigarettes to a consumer.

(5) "Tobacco access control tax credit" means the credit provided under this article.
§11-28-3. Credit for tobacco access control expenses.

(a) Application for credit by taxpayer. -- A taxpayer who incurs a qualified tobacco access control expense in a taxable year may apply for a tobacco access control tax credit as provided in this article. In order to receive the credit, the taxpayer must submit an application to the division by the fifteenth day of September for a qualified tobacco access control expense incurred in the taxable year that ended in the prior calendar year.

(b) Amount of credit. -- A taxpayer that timely applies under subsection (a) of this section shall receive a tobacco access control tax credit for the taxable year up to the amount of nine hundred dollars per license per location.

(c) Notification of approval from division. -- By the fifteenth day of December of the calendar year following the close of the taxable year during which the qualified tobacco access control expense was incurred, the division shall notify the taxpayer of the amount of the taxpayer's tobacco access control tax credit approved by the division.
§11-28-4. Use of credit.

(a) Carryover. --

(1) The amount of the tobacco access control tax credit that a taxpayer may use against any one qualified tax liability during any year may not exceed fifty percent of the qualified tax liability for that taxable year.

(2) If the taxpayer cannot use the entire amount of the tobacco access control tax credit for the taxable year in which the tobacco access control tax credit is first approved, then the excess may be carried over to succeeding taxable years and used as a credit against the qualified tax liability of the taxpayer for those taxable years.

(3) Each time that the tobacco access control tax credit is carried over to a succeeding taxable year, it shall be reduced by the amount that was used as a credit during the immediately preceding taxable year.

(4) The tobacco access control tax credit provided by this article may be carried over and applied to succeeding taxable years for not more than four taxable years following the first taxable year for which the taxpayer was entitled to claim the credit.

(b) Taxable year to which applied. -- A tobacco access control tax credit approved by the division for qualified tobacco access control expense in a taxable year first shall be applied against the taxpayer's qualified tax liability for the current taxable year as of the date on which the credit was approved before the tobacco access control tax credit is applied against any tax liability under subsection (a) of this section.

(c) Limitations. -- A taxpayer may not carry back, obtain a refund of or assign an unused tobacco access control tax credit.

§11-28-5. Determination of qualified tobacco access control expenses.

In prescribing standards for determining which tobacco access control expense is a qualified tobacco access control expense for purposes of computing the credit provided by this article, the division shall require:

(1) A copy of the technology specifications demonstrating that the specifications meet the definition of a qualified tobacco access control expense;

(2) A copy of an invoice to the taxpayer for the technology purchased for qualification as a qualified tobacco access control expense; and

(3) A copy of the check or checks and paid receipts for technology purchased for qualifications as qualified tobacco access control expense.
§11-28-6. Time limitation.

A taxpayer is not entitled to a tobacco access control tax credit for qualified tobacco access control expenses incurred in taxable years ending after the thirty-first day of December, two thousand five.
§11-28-7. Limitation on credits.

The total amount of credits approved by the division may not exceed twenty million dollars.
§11-28-8. S Corporation shareholder pass-through.

(a) General rule. -- If a West Virginia S corporation does not have an eligible tax liability against which the tobacco access control tax credit may be applied, a shareholder of the West Virginia S corporation is entitled to a tobacco access control tax credit equal to the tobacco access control tax credit determined for the West Virginia S corporation for the taxable year multiplied by the percentage of the West Virginia S corporation's distributive income to which the shareholder is entitled.

(b) Double use of credit prohibited. -- A West Virginia S corporation and a shareholder of a West Virginia S corporation may not claim a credit under this article for the same qualified tobacco access control expense.
§11-28-9. Report to Legislature.

The commissioner shall submit an annual report to the joint committee government and finance, by filing it with the legislative librarian, indicating the effectiveness of the credit provided by this article not later than the fifteenth day of March following the year in which the credits are approved. The report shall include the number of taxpayers using the credit as of the date of the report and the amount of credits approved and used. The report may also include any recommendations for changes in the calculation or administration of the credit.
§11-28-10. Expiration.

The division may not approve a tobacco access control tax credit under this article for taxable years ending after the thirty-first day of December, two thousand five.
§11-28-11. Rules.

The commissioner shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code necessary for the implementation and administration of this article.

NOTE: The purpose of this bill is to allow a tobacco access control tax credit against the personal income tax, the corporate net income tax and the business franchise tax, to off-set expenses incurred by a taxpayer for the purchase and use of technology intended to control the access of minors to cigarettes.

This article is new; therefore, strike-throughs and underscoring have been omitted.