H. B. 4421
(By Delegates White and Kominar)
[Introduced February 5, 2008; referred to the
Committee on Finance.]
A BILL to repeal §11-12C-1, §11-12C-2, §11-12C-3, §11-12C-4,
§11-12C-5, §11-12C-6, §11-12C-7, §11-12C-8, §11-12C-9,
§11-12C-10 and §11-12C-12 of the Code of West Virginia, 1931,
as amended; to amend and reenact §11-12C-11 of said code; and
to amend said code by adding thereto a new article, designated
§11-12E-1, §11-12E-2, §11-12E-3, §11-12E-4, §11-12E-5,
§11-12E-6, §11-12E-7, §11-12E-8 and §11-12E-9, all relating
to the repeal of the corporate license tax; creating an
initial registration fee; and permitting the Secretary of
State to retain all of the attorney-in-fact fees collected.
Be it enacted by the Legislature of West Virginia:
That §11-12C-1, §11-12C-2, §11-12C-3, §11-12C-4, §11-12C-5,
§11-12C-6, §11-12C-7, §11-12C-8, §11-12C-9, §11-12C-10 and
§11-12C-12 of the Code of West Virginia, 1931, as amended, be
repealed; that §11-12C-11 of said code be amended and reenacted; and that said code be amended by adding thereto a new article,
designated §11-12E-1, §11-12E-2, §11-12E-3, §11-12E-4, §11-12E-5,
§11-12E-6, §11-12E-7, §11-12E-8 and §11-12E-9, all to read as
ARTICLE 12C. CORPORATE LICENSE TAX.
§11-12C-11. Effective date.
(a) The provisions of this article as enacted in one thousand
nine hundred ninety-two shall take effect on the first day of July,
one thousand nine hundred ninety-three, and apply to license tax
years beginning the first day of July, one thousand nine hundred
ninety-three and thereafter, but the license tax shall cease to
apply after the license tax year ending on the thirtieth day of
June, two thousand eight.
(b) Tax liabilities, if any, arising for taxable years ending
prior to the first day of July, one thousand nine hundred ninety-
three, shall be determined, administered, assessed and collected as
if sections seventy-six through eighty-four and eighty-six through
ninety-one, article twelve of this chapter had not been repealed;
and the rights and duties of the taxpayer and the State of West
Virginia thereunder shall be fully and completely preserved.
(c) The provisions of the other sections of this article as
enacted in one thousand nine hundred ninety-two, and to the extent
any of those sections were amended, are repealed effective the
first day of July, two thousand eight. However, any liability for the corporate license tax for any and all taxable years or portions
thereof ending before the first day of July, two thousand eight
shall be determined, administered, assessed, collected and enforced
as if the tax has not been terminated; and the rights and duties of
the taxpayer and the State of West Virginia with respect to that
tax shall be fully preserved. Such taxpayers shall file their
final annual corporate license tax return as provided by applicable
former sections of article twelve-c as they existed prior to their
ARTICLE 12E. CORPORATE LICENSE TAX REPLACEMENT FEES.
As used in this article:
(1) "Business activity" means all activities engaged in or
caused to be engaged in with the object of gain or economic
benefit, direct or indirect, but does not mean any of the
activities of foreign corporations enumerated in subsections (b),
section one thousand five hundred one, article fifteen, chapter
thirty-one-d of this code, except for the activity of conducting
affairs in interstate commerce when activity occurs in this state.
(2) "Corporate license tax replacement fees" or "replacement
fees" or "fees" means the annual fee payable to the Secretary of
State as attorney-in-fact and the one-time initial registration fee
for administering the annual report filing requirements of this
(3) "Corporation" means a "domestic corporation", a "foreign
corporation" or a "nonprofit corporation".
(4) "Domestic corporation" means a corporation for profit
which is not a foreign corporation incorporated under or subject to
the provisions of chapter thirty-one-d of this code.
(5) "Foreign corporation" means a for-profit corporation
incorporated under a law other than the laws of this state.
(6) "Initial registration fee" means a one hundred dollar fee
that is to be paid to the Secretary of State the first time an
entity pays the twenty-five dollar annual attorney-in-fact fee.
(7) "Limited partnership" means a partnership as defined by
section one, article nine, chapter forty-seven of this code.
(8) "Nonprofit corporation" means a nonprofit corporation as
defined by section one hundred fifty, article one, chapter thirty-
one-e of this code.
§11-12E-2. Payment of fee required.
On or after the first day of July, two thousand eight, no
domestic corporation or foreign corporation may engage in any
business activity in this state without paying the replacement fees
and filing the information return required by section three. No
nonprofit corporation may engage in any activity in this state
without paying those fees and filing that return.
§11-12E-3. Payment and collection of fees; deposit of money;
(a) Payment and collection of fees. -- When application is
made to the Secretary of State for a certificate of incorporation
or authority to do business in this state, the applicant shall pay
the replacement fees due under this article for the first year, and
the Secretary of State shall collect the fees before issuing the
certificate. Thereafter, on or before the first day of the next
fiscal year following the date of the certificate, and on or before
the first day of each succeeding fiscal year, the corporation shall
pay and the Secretary of State shall collect the annual fee for a
full year: Provided, That if the application is made on or after
the first day of the second month preceding the beginning of the
next fiscal year, and before the first day of the year, the
Secretary of State shall also collect the annual fee for the full
year beginning on the first day of the next fiscal year.
(b) Deposit of money. -- The fees received by the Secretary of
State pursuant to the provisions of this article shall be deposited
by the Secretary of State in the service fees and collections
account established by section two, article one, chapter fifty-nine
of this code, and such fees when deposited shall not thereunder be
expired or cause to be expired any moneys into the General Revenue
Fund of the State Treasury in the manner provided by law.
(c) Returns. -- Payment of the fees required under the
provisions of this section shall be accompanied by a return on
forms provided by the Secretary of State for that purpose. The return shall contain: (1) The address of the corporation's
principal office; (2) the names and mailing addresses of its
officers and directors; (3) the name and mailing address of the
person on whom notice of process may be served; (4) the name and
address of the corporation's parent corporation and of each
subsidiary of the corporation licensed to do business in this
state; (5) the county or county code in which the principal office
address or mailing address of the company is located; (6) business
class code; and (7) any other information the Secretary of State
Notwithstanding any other provision of law to the contrary,
the Secretary of State shall, upon request of any person, disclose:
(1) The address of the corporation's principal office; (2) the
names and addresses of its officers and directors; (3) the name and
mailing address of the person on whom notice of process may be
served; (4) the name and address of each subsidiary of the
corporation and the corporation's parent corporation; (5) the
county or county code in which the principal office address or
mailing address of the company is located; and (6) the business
§11-12E-4. Due date of return; payment of fees.
It shall be the duty of each corporation required to pay the
fees imposed under this article to remit them with a properly
completed return to the Secretary of State, and if it fails to do so it shall be subject to the penalties prescribed in section seven
of this article.
§11-12E-5. Monthly report by Secretary of State to Tax
Commissioner as to corporations.
The Secretary of State shall, within twenty days after the
close of each month, make a report to the Tax Commissioner for the
preceding month, in which he or she shall set out the name of every
corporation to which he or she issued a certificate of
incorporation during the month, as well as the name of each
corporation to which he or she issued a certificate of authority.
He or she shall set out in the report the names of all corporations
to which he or she issued certificates of change of name or of
change of location of principal office, dissolution, withdrawal or
merger; if he or she fails to do so, it shall be the duty of the
Tax Commissioner to report such failure to the Governor.
§11-12E-6. Administrative and criminal penalties.
The following penalties shall be in addition to any other
penalties and remedies available elsewhere in this code:
(a) Administrative penalty. -- The Secretary of State shall
impose upon each delinquent corporation a fine in the amount of one
hundred dollars per year for each year or portion thereof in which
the return which is due is not filed or the fees which are owed are
not paid. This penalty shall be assessed and collected in the same
manner as the fees imposed under this article.
(b) Criminal penalty. -- It shall be a misdemeanor for a
corporation to conduct business for more than thirty consecutive
calendar days without paying in full the amount of fees which are
due and filing the return which is due. The penalty for any
officer, agent or employee convicted of such offense shall be a
fine of not more than one thousand dollars per conviction.
(c) Revocation of certificate of incorporation or certificate
of authority. -- Upon the establishment of a finalized liability
for any fees due and owing, not subject to further administrative
or judicial review, the certificate of incorporation in the case of
a domestic corporation, or the certificate of authority in the case
of a foreign corporation, shall be revoked. Any corporation whose
certificate of incorporation or certificate or authority has been
revoked due to nonpayment of its fees shall be reinstated to its
former rights as if it had not been delinquent upon payment to the
Secretary of State of all delinquent fees, plus any penalties
(d) All penalties collected under this section shall be
deposited into the General Revenue Fund of the State Treasury in
the manner provided by law.
§11-12E-7. Disposition of fees collected.
All fees collected under the provisions of this article shall
be paid into the State Treasury in the manner provided by law.
If any provision of this article or the application thereof to
any person or circumstance is for any reason adjudged by any court
of competent jurisdiction to be unconstitutional or otherwise
invalid, such judgment may not affect, impair or invalidate the
remainder of the article, but shall be confined in its operation to
the provision thereof directly involved in the controversy in which
such judgment has been rendered, and the applicability of other
provisions may not be affected thereby.
The Secretary of State shall promulgate rules, including
emergency rules, as he or she considers necessary to implement the
provisions of this article.
NOTE: The purpose of this bill is to repeal the complicated
and confusing corporate license tax, and to replace the resulting
loss of revenues by the Office of the Secretary of State by
creating a new one-time $100 filing fee, and by permitting the
Secretary of State to keep all of the $25 annual attorney-in-fact
fees paid by corporations and limited partnerships.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
Article 12E is new; therefore, strike-throughs and
underscoring have been omitted.