Senate Bill No. 287
(By Senator Sprouse, Oliverio and Minear)
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[Introduced January 23, 2002; referred to the Committee
on Economic Development; and then to the Committee on Finance
.]
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A BILL to amend and reenact section six, article twenty-three,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to the
business franchise tax generally; and providing for the
roll back of the business franchise tax until it is
eliminated.
Be it enacted by the Legislature of West Virginia:
That section six, article twenty-three, 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 23. BUSINESS FRANCHISE TAX.
§11-23-6. Imposition of tax; change in rate of tax.
(a) General. -- An annual business franchise tax is hereby imposed on the privilege of doing business in this state and in
respect of the benefits and protection conferred. Such tax
shall be collected from every domestic corporation, every
corporation having its commercial domicile in this state, every
foreign or domestic corporation owning or leasing real or
tangible personal property located in this state or doing
business in this state and from every partnership owning or
leasing real or tangible personal property located in this state
or doing business in this state, effective on and after the
first day of July, one thousand nine hundred eighty-seven.
(b) Amount of tax and rate; effective date. --
(1) On and after the first day of July, one thousand nine
hundred eighty-seven, the amount of tax shall be the greater of
fifty dollars or fifty-five one hundredths of one percent of the
value of the tax base, as determined under this article:
Provided, That when the taxpayer's first taxable year under this
article is a short taxable year, the taxpayer's liability shall
be prorated based upon the ratio which the number of months in
which such short taxable year bears to twelve: Provided,
however, That this subdivision shall not apply to taxable years
beginning on or after the first day of January, one thousand
nine hundred eighty-nine.
(2) Taxable years after December 31, 1988. -- For taxable years beginning on or after the first day of January, one
thousand nine hundred eighty-nine, the amount of tax due under
this article shall be the greater of fifty dollars or seventy-
five one hundredths of one percent of the value of the tax base
as determined under this article.
(3) Taxable years after June 30, 1997. -- For taxable years
beginning on or after the first day of July, one thousand nine
hundred ninety-seven, the amount of tax due under this article
shall be the greater of fifty dollars or seventy hundredths of
one percent of the value of the tax base as determined under
this article.
(c) Short taxable years. -- When the taxpayer's taxable year
for federal income tax purposes is a short taxable year, the tax
determined by application of the tax rate to the taxpayer's tax
base shall be prorated based upon the ratio which the number of
months in such short taxable year bears to twelve: Provided,
That when the taxpayer's first taxable year under this article
is less than twelve months, the taxpayer's liability shall be
prorated based upon the ratio which the number of months the
taxpayer was doing business in this state bears to twelve but in
no event shall the tax due be less than fifty dollars.
(d) Roll back of amount of tax and rate. -- Effective with
the tax year beginning the first day of January, two thousand three and on that date every year thereafter, the amount of the
business franchise tax or rate provided for in this article
shall be rolled back in increments of one tenth of the tax or
one tenth of the rate, whichever is higher, for that tax year
and for each succeeding tax year thereafter until the business
franchise tax is eliminated. The tax commissioner shall propose
rules for legislative approval in accordance with the provisions
of article three, chapter twenty-nine-a of this code to ensure
that the provisions of this subsection are made effective and
that the business franchise tax is eliminated effective the
thirty-first day of December, two thousand twelve.
NOTE: The purpose of this bill is to roll back the business
franchise tax over a ten year period until the tax is
eliminated.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.