Senate Bill No. 2005

(By Senators Tomblin, Mr. President, and Sprouse,

By Request of the Executive)

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[Introduced June 10, 2003; referred to the Committee on Finance.]

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A BILL to amend and reenact section three, article twenty-four, chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to updating the meaning of certain terms used in the West Virginia corporation net income tax act by bringing them into conformity with their meanings for federal income tax purposes; and specifying effective date.

Be it enacted by the Legislature of West Virginia:
That section three, article twenty-four, 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 24. CORPORATION NET INCOME TAX.
§11-24-3. Meaning of terms; general rule.
(a) Any term used in this article has the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes unless a different meaning is clearly required by the context or by definition in this article. Any reference in this article to the laws of the United States means the provisions of the Internal Revenue Code of 1986, as amended, and any other provisions of the laws of the United States that relate to the determination of income for federal income tax purposes. All amendments made to the laws of the United States on or after the fifteenth day of March, two thousand two, but prior to the first day of January, two thousand three, thirty-first day of December, two thousand two, but prior to the first day of June, two thousand three, shall be given effect in determining the taxes imposed by this article to the same extent those changes are allowed for federal income tax purposes, whether the changes are retroactive or prospective, but no amendment to the laws of the United States made on or after the first day of January June, two thousand three, shall be given any effect.
(b) The term "Internal Revenue Code of 1986" means the Internal Revenue Code of the United States enacted by the federal Tax Reform Act of 1986 and includes the provisions of law formerly known as the Internal Revenue Code of 1954, as amended, and in effect when the federal Tax Reform Act of 1986 was enacted that were not amended or repealed by the federal Tax Reform Act of 1986. Except when inappropriate, any reference in any law, executive order or other document:
(1) To the Internal Revenue Code of 1954 includes a reference to the Internal Revenue Code of 1986; and
(2) To the Internal Revenue Code of 1986 includes a reference to the provisions of law formerly known as the Internal Revenue Code of 1954.
(c) Effective date. -- The amendments to this section enacted in the year two thousand three are retroactive to the extent allowable under federal income tax law. With respect to taxable years that began prior to the fifteenth first day of March June, two thousand two three, the law in effect for each of those years shall be fully preserved as to that year, except as provided in this section.

NOTE: The purpose of this bill is to update the section of the West Virginia Corporation Net Income Tax Act which brings terms not defined in that Act into conformity with the meaning of those terms for federal income tax purposes. The bill will incorporate changes in federal income tax law made by the Jobs and Growth Tax Relief Reconciliation Act of 2003.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.