H. B. 2439
(By Delegate R. M. Thompson)
[Introduced January 20, 2003; referred to the
Committee on Industry and Labor, Economic Development and
Small Business then 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 thirteen-t, relating
to taxation; and providing a small business tax credit equal
to any guaranty fee paid to the small business administration
to obtain small business administration financing, or two
percent of the loan from any other lending institution for a
new business in this state.
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 thirteen-t, to read as follows:
ARTICLE 13T. SMALL BUSINESS TAX CREDIT.
§11-13T-1. Short title.
This article may be cited as the "West Virginia Small Business Tax Credit Act."
§11-13T-2. Small business tax credit.
For the purposes of this article, a "small business" is any
corporation, partnership, sole proprietorship or other business
entity which has an annual payroll of one million five thousand
dollars or less, or annual gross sales of not more than five
million dollars. Beginning the first day of January, two thousand
four, and each January thereafter, the tax commissioner shall
prescribe amounts which shall apply, in place of the amounts stated
in this section, during that calendar year. These amounts shall be
prescribed by increasing the amount of each by the cost-of-living
adjustment for that calendar year.
Each small business formed under the laws of the state of West
Virginia and operating within the state is entitled to claim as a
credit against the tax imposed by this chapter for businesses any
amount paid to the United States small business administration
(SBA) as a guaranty fee pursuant to the obtaining of SBA guaranteed
financing. This credit shall be applicable only to the tax year in
which the guaranty fee was paid. The credit may not reduce the tax
below the minimum tax where a minimum tax is provided under this
chapter and may only be claimed by the small business which is the
primary obligor in the financing transaction and which actually
paid the guaranty fee.
In the alternative, a small business is entitled to claim as a one time credit against the tax imposed by this chapter for
businesses two percent of the total loan received by the small
business from any lending or banking or financial institution
located in this state that is authorized by law to make such
business loans, if the proceeds from the loan are used solely for
the new business.
NOTE: The purpose of this bill is to give small businesses a
tax credit equal to any guaranty fee they pay to the Small Business
Administration in order to obtain SBA financing or, as an
alternative, a tax credit equal to 2% of any loan received by the
small business from any other financial institution authorized to
make business loans in this state. This is a one time credit.
This article is new; therefore, strike-throughs and
underscoring have been omitted.