HB4420 HFA White and Delong 3-16
Delegate White moves to amend the bill on page one, following
the enacting section and the article heading, by striking out
section three-a in its entirety and inserting in lieu thereof a new
section three-a to read as follows:
"§11-24-3a. Specific terms defined.
For purposes of this article:
(1) Business income. -- The term "business income" means
income arising from transactions and activity in the regular course
of the taxpayer's trade or business and includes income from
tangible and intangible property if the acquisition, management and
disposition of the property or the rendering of services in
connection therewith constitute integral parts of the taxpayer's
regular trade or business operations and includes all income which
is apportionable under the Constitution of the United States.
(2) "Combined group" means the group of all persons whose
income and apportionment factors are required to be taken into
account pursuant to subsection (a) or (b), section thirteen-a of
this article in determining the taxpayer's share of the net
business income or loss apportionable to this state.
(3) Commercial domicile. -- The term "commercial domicile"
means the principal place from which the trade or business of the
taxpayer is directed or managed: Provided, That the commercial
domicile of a financial organization, which is subject to regulation as such, shall be at the place designated as its
principal office with its regulating authority.
(4) Compensation. -- The term "compensation" means wages,
salaries, commissions and any other form of remuneration paid to
employees for personal services.
(5) Corporation. -- "Corporation" means any corporation as
defined by the laws of this state or organization of any kind
treated as a corporation for tax purposes under the laws of this
state, wherever located, which if it were doing business in this
state would be
a "taxpayer" subject to the tax imposed by this
article. The business conducted by a partnership which is directly
or indirectly held by a corporation shall be considered the
business of the corporation to the extent of the corporation's
distributive share of the partnership income, inclusive of
guaranteed payments to the extent prescribed by regulation. The
term "corporation" includes a joint-stock company and any
association or other organization which is taxable as a corporation
under the federal income tax law.
(6) Delegate. -- The term "delegate" in the phrase "or his or
her delegate", when used in reference to the Tax Commissioner,
means any officer or employee of the State Tax Department duly
authorized by the Tax Commissioner directly, or indirectly by one
or more redelegations of authority, to perform the functions
mentioned or described in this article or regulations promulgated thereunder.
(7) Domestic corporation. -- The term "domestic corporation"
means any corporation organized under the laws of West Virginia and
certain corporations organized under the laws of the State of
Virginia before the twentieth day of June, one thousand eight
hundred sixty-three. Every other corporation is a foreign
(8) Engaging in business. -- The term "engaging in business"
or "doing business" means any activity of a corporation which
enjoys the benefits and protection of government and laws in this
(9) Federal Form 1120. -- The term "Federal Form 1120" means
the annual federal income tax return of any corporation made
pursuant to the United States Internal Revenue Code of 1986, as
amended, or in successor provisions of the laws of the United
States, in respect to the federal taxable income of a corporation,
and filed with the federal Internal Revenue Service. In the case
of a corporation that elects to file a federal income tax return as
part of an affiliated group, but files as a separate corporation
under this article, then as to such corporation Federal Form 1120
means its pro forma Federal Form 1120.
(10) Fiduciary. -- The term "fiduciary" means, and includes,
a guardian, trustee, executor, administrator, receiver, conservator
or any person acting in any fiduciary capacity for any person.
(11) Financial organization. -- The term "financial
(A) A holding company or a subsidiary thereof. As used in
this section "holding company" means a corporation registered under
the federal Bank Holding Company Act of 1956 or registered as a
savings and loan holding company other than a diversified savings
and loan holding company as defined in Section 408(a)(1)(F) of the
federal National Housing Act, 12 U. S. C. §1730(a)(1)(F);
(B) A regulated financial corporation or a subsidiary thereof.
As used in this section "regulated financial corporation" means:
(i) An institution, the deposits, shares or accounts of which
are insured under the Federal Deposit Insurance Act or by the
federal Savings and Loan Insurance Corporation;
(ii) An institution that is a member of a federal home loan
(iii) Any other bank or thrift institution incorporated or
organized under the laws of a state that is engaged in the business
of receiving deposits;
(iv) A credit union incorporated and organized under the laws
of this state;
(v) A production credit association organized under 12 U. S.
(vi) A corporation organized under 12 U. S. C. §611 through
§631 (an Edge Act corporation); or
(vii) A federal or state agency or branch of a foreign bank as
defined in 12 U. S. C. §3101; or
(C) A corporation which derives more than fifty percent of its
gross business income from one or more of the following activities:
(i) Making, acquiring, selling or servicing loans or
extensions of credit. Loans and extensions of credit include:
(I) Secured or unsecured consumer loans;
(II) Installment obligations;
(III) Mortgages or other loans secured by real estate or
tangible personal property;
(IV) Credit card loans;
(V) Secured and unsecured commercial loans of any type; and
(VI) Loans arising in factoring.
(ii) Leasing or acting as an agent, broker or advisor in
connection with leasing real and personal property that is the
economic equivalent of an extension of credit as defined by the
Federal Reserve Board in 12 CFR 225.25(b)(5).
(iii) Operating a credit card business.
(iv) Rendering estate or trust services.
(v) Receiving, maintaining or otherwise handling deposits.
(vi) Engaging in any other activity with an economic effect
comparable to those activities described in subparagraph (i), (ii),
(iii), (iv) or (v) of this paragraph.
(12) Fiscal year. -- The term "fiscal year" means an accounting period of twelve months ending on any day other than the
last day of December and on the basis of which the taxpayer is
required to report for federal income tax purposes.
(13) Includes and including. -- The terms "includes" and
"including", when used in a definition contained in this article,
shall not be deemed to do not exclude other things otherwise within
the meaning of the term being defined.
(14) Insurance company. -- The term "insurance company" means
any corporation subject to taxation under section twenty-two,
article three, chapter twenty-nine of this code or chapter thirty-
three of this code or an insurance carrier subject to the surcharge
imposed by subdivision (1) or (3), subsection (f), section three,
article two-c, chapter twenty-three of this code or any corporation
that would be subject to taxation under any of those provisions
were its business transacted in this state.
(14) (15) "Internal Revenue Code" means Title 26 of the United
States Code, as amended, the Internal Revenue Code as defined in
section three of this article, without regard to application of
federal treaties unless expressly made applicable to states of the
(15) (16) Nonbusiness income. -- The term "nonbusiness income"
means all income other than business income.
(16) (17) "Partnership" means a general or limited partnership
or organization of any kind treated as a partnership for tax purposes under the laws of this state.
(17) (18) Person. -- The term "person" is to be deemed
considered interchangeable with the term "corporation" in this
section. The term "person" means any individual, firm,
partnership, general partner of a partnership, limited liability
company, registered limited liability partnership, foreign limited
liability partnership, association, corporation whether or not the
corporation is, or would be if doing business in this state,
subject to the tax imposed by this article, company, syndicate,
estate, trust, business trust, trustee, trustee in bankruptcy,
receiver, executor, administrator, assignee or organization of any
(18) (19) Pro forma return. -- The term "pro forma return"
when used in this article means the return which the taxpayer would
have filed with the Internal Revenue Service had it not elected to
file federally as part of an affiliated group.
(19) (20) Public utility. -- The term "public utility" means
any business activity to which the jurisdiction of the Public
Service Commission of West Virginia extends under section one,
article two, chapter twenty-four of this code.
(21) Qualified real estate investment trust. -- The term
"Qualified Real Estate Investment Trust" means any real estate
invest trust where no single entity owns or controls, directly or
indirectly, constructively or otherwise, fifty percent or more of the voting power or value of the beneficial interests or shares of
the trust, if the single entity is
(A) Subject to the provisions of subchapter C, chapter 1,
subtitle A, title 26 of the United States Code, as amended;
(B) Not exempt from federal income tax pursuant to the
provisions of section 501 of the Internal Revenue Code of 1986, as
(C) Not a real estate invest trust as defined in this section
or a qualified real estate invest trust subsidiary under section
856(i) of the Internal Revenue Code of 1986, as amended.
(22) Qualified regulated investment company. -- The term
"Qualified Regulated Investment Company" means any regulated
company where no single entity owns or controls, directly or
indirectly, constructively or otherwise, fifty percent or more of
the voting power or value of the beneficial interests or shares of
the company, if the single entity is:
(A) Subject to the provision of subchapter C, chapter 1,
subtitle A. title 26 of the United States Code, as amended;
(B) Not exempt from federal income tax pursuant to the
provision of section 501 of the Internal Revenue Code of 1986, as
(C) Not a regulated investment company as defined in section
3 of the Investment Company Act of 1940, as amended, 15 U.S.C.
(23) Real estate investment trust. -- The term "Real Estate
Investment Trust" has the meaning ascribed to such term in section
856 of the Internal Revenue Code of 1986, as amended.
(24) Regulated investment company. -- The term "Regulated
Investment Company" has the same meaning as ascribed to such term
in section 851 of the Internal Revenue Code of 1986, as amended.
(20) (25) Sales. -- The term "sales" means all gross receipts
of the taxpayer that are "business income" as defined in this
(21) (26) State. -- The term "state" means any state of the
United States, the District of Columbia, the Commonwealth of Puerto
Rico, any territory or possession of the United States and any
foreign country or political subdivision thereof.
(22) (27) Taxable year, tax year. -- The term "taxable year"
or "tax year" means the taxable year for which the taxable income
of the taxpayer is computed under the federal income tax law.
(23) (28) Tax. -- The term "tax" includes, within its meaning,
interest and additions to tax, unless the intention to give it a
more limited meaning is disclosed by the context.
(24) (29) Tax Commissioner. -- The term "Tax Commissioner"
means the Tax Commissioner of the State of West Virginia or his or
(25) (30) "Tax haven" means a jurisdiction that, for a
particular tax year in question: (A) Is identified by the Organization for Economic Cooperation and Development as a tax
haven or as having a harmful preferential tax regime; or (B) a
jurisdiction that has no, or nominal, effective tax on the relevant
income and: (i) That has laws or practices that prevent effective
exchange of information for tax purposes with other governments
regarding taxpayers subject to, or benefitting from, the tax
regime; (ii) that lacks transparency, for purposes of this
definition, a tax regime lacks transparency if the details of
legislative, legal or administrative provisions are not open to
public scrutiny and apparent or are not consistently applied among
similarly situated taxpayers; (iii) facilitates the establishment
of foreign-owned entities without the need for a local substantive
presence or prohibits these entities from having any commercial
impact on the local economy; (iv) explicitly or implicitly excludes
the jurisdiction's resident taxpayers from taking advantage of the
tax regime's benefits or prohibits enterprises that benefit from
the regime from operating in the jurisdiction's domestic market; or
(v) has created a tax regime which is favorable for tax avoidance,
based upon an overall assessment of relevant factors, including
whether the jurisdiction has a significant untaxed offshore
financial or other services sector relative to its overall economy.
For purposes of this definition, the phrase "tax regime" means a
set or system of rules, laws, regulations or practices by which
taxes are imposed on any person, corporation or entity, or on any income, property, incident, indicia or activity pursuant to
(26) (31) Taxpayer. -- The term "taxpayer" means any person
subject to the tax imposed by this article.
(27) (32) This code. -- The term "this code" means the Code of
West Virginia, one thousand nine hundred thirty-one, as amended.
(28) (33) This state. -- The term "this state" means the State
of West Virginia.
(29) (34) "United States" means the United States of America
and includes all of the states of the United States, the District
of Columbia and United States territories and possessions.
(30) (35) "Unitary business" means a single economic
enterprise that is made up either of separate parts of a single
business entity or of a commonly controlled group of business
entities that are sufficiently interdependent, integrated and
interrelated through their activities so as to provide a synergy
and mutual benefit that produces a sharing or exchange of value
among them and a significant flow of value to the separate parts.
For purposes of this article and article twenty-three of this
chapter, any business conducted by a partnership shall be treated
as conducted by its partners, whether directly held or indirectly
held through a series of partnerships, to the extent of the
partner's distributive share of the partnership's income,
regardless of the percentage of the partner's ownership interest or the percentage of its distributive or any other share of
partnership income. A business conducted directly or indirectly by
one corporation through its direct or indirect interest in a
partnership is unitary with that portion of a business conducted by
one or more other corporations through their direct or indirect
interest in a partnership if there is a synergy and mutual benefit
that produces a sharing or exchange of value among them and a
significant flow of value to the separate parts and the
corporations are members of the same commonly controlled group.
(31) (36) West Virginia taxable income. -- The term "West
Virginia taxable income" means the taxable income of a corporation
as defined by the laws of the United States for federal income tax
purposes, adjusted, as provided in this article: Provided, That in
the case of a corporation having income from business activity
which is taxable without this state, its "West Virginia taxable
income" shall be such the portion of its taxable income as so
defined and adjusted as is allocated or apportioned to this state
under the provisions of this article."