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Introduced Version Senate Bill 142 History

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sb142 intr
Senate Bill No. 142

(By Senators White and Foster)

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[Introduced February 11, 2009; referred to the Committee on Economic Development; and then to the Committee on Finance.]

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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §11-13Z-1, §11-13Z-2, §11-13Z-3, §11-13Z-4, §11-13Z-5, §11-13Z-6, §11-13Z-7, §11-13Z-8, §11-13Z-9, §11-13Z-10, §11-13Z-11, §11-13Z-12, §11-13Z-13, §11-13Z-14, §11-13Z-15, §11-13Z-16, §11-13Z-17, §11-13Z-18, §11-13Z-19, §11-13Z-20 and §11-13Z-21, all relating to taxation generally; setting forth short title; setting forth legislative findings; defining terms; specifying method for determining tax attributable to qualified investment; specifying eligibility for tax credit; specifying procedures for application for certification and for certification of project plans; specifying limitations on certification and criteria for certification; specifying applications for certification are public information; specifying procedures and criteria for decertification of projects or withdrawal or suspension of certification of projects or decrease of amounts of credit or qualified investment for which a project is certified; requiring audits and investigations; specifying confidentiality of certain information; requiring a project administration allowance to be deposited in a revolving fund for use by the Division of Tourism; establishing the Small Tourism Business Fund as a revolving fund; providing a tax administration allowance to be deposited in a revolving fund for use by the Tax Division; establishing the General Tax Administration Fund as a revolving fund; specifying method for determining qualified investment; specifying amount of tax credit allowed; setting forth application of credit; specifying method for assertion of credit and filings; specifying requirements for reporting of credit; setting forth total maximum aggregate tax credit limitation; specifying forfeiture of unused tax credits; specifying redetermination of credit; specifying recapture of credit; specifying treatment for premature disposition of qualified property; specifying treatment for premature cessation of use of qualified property; specifying recapture tax; specifying imposition of recapture tax; specifying application of the West Virginia Tax Procedure and Administration Act to the recapture tax; setting forth rules for transfer of qualified property to successors; specifying treatment of successor businesses where predecessor is entitled to the credit; specifying treatment of a mere change in the form of doing business; requiring and specifying identification of qualified tourism development property; specifying rules for failure to keep adequate records; specifying certain credit information to be published as public information; authorizing audits and joint audits or examinations of taxpayers claiming the credit and certain other persons; requiring program evaluation; setting forth expiration date for the tax credit program; specifying preservation of vested entitlements; specifying general procedure and administration and adoption of the West Virginia Tax Procedure and Administration Act as applying to the tax credit; and authorizing promulgation of regulations.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §11-13Z-1, §11-13Z-2, §11-13Z-3, §11-13Z-4, §11-13Z-5, §11-13Z-6, §11-13Z-7, §11-13Z-8, §11-13Z-9, §11-13Z-10, §11-13Z-11, §11-13Z-12, §11-13Z-13, §11-13Z-14, §11-13Z-15, §11-13Z-16, §11-13Z-17, §11-13Z-18, §11-13Z-19, §11-13Z-20 and §11-13Z-21, all to read as follows:

ARTICLE 13Z. SMALL TOURISM BUSINESS DEVELOPMENT ACT.

§11-13Z-1. Short title.

This article may be known and cited as the "Small Tourism
Business Development Act."
§11-13Z-2. Legislative findings.

The Legislature finds and declares that the general welfare and material well-being of the people of West Virginia will be improved and increased by the development of tourism attractions and amenities in the less developed counties of this state with high unemployment. It is in the best interests of this state to induce the creation, expansion and improvement of tourism attractions and amenities within those counties of this state. Development of tourism attractions and amenities serves the public purposes of relieving unemployment, preserving and creating jobs, and creating tax revenues for the support of essential public services. The Legislature finds and declares that the purposes to be accomplished by this article are proper governmental and public services for which public moneys can be expended.

§11-13Z-3. Definitions.

(a) General. -- When used in this article, or in the administration of this article, terms defined in subsection (b) of this section have the meanings ascribed to them by this section, unless a different meaning is clearly required by either the context in which the term is used, or by specific definition in this article.

(b) Terms defined. --

(1) Affiliate. -- The terms "affiliate" or "affiliates"
include all concerns which are affiliates of each other when either directly or indirectly:
(A) One concern controls or has the power to control the other; or

(B) A third party or third parties control or have the power to control both. In determining whether concerns are independently owned and operated and whether or not affiliation exists, consideration will be given to all appropriate factors, including common ownership, common management and contractual relationships.

(2) Bed and breakfast facility. -- Bed and breakfast facility means:

(A) An architecturally interesting or historic structure, facility, complex or set of facilities consisting of one or more buildings, cottages, carriage houses, cabins, homesteads or structures, operated as a lodging facility or complex which contains not more than eight bedrooms in total for the commercial accommodation of paying overnight lodgers. In order to qualify as a bed and breakfast facility under this article, the facility or complex, if located in an area subject to zoning laws, must be located in an area legally zoned for such operation, and must comply with all applicable tax, fire, building and health requirements applicable to the property given its size and use.

(B) Exclusions. -- The term bed and breakfast facility does not include:

(i) Any facility or complex having more than eight bedrooms for commercial accommodation of paying overnight lodgers;

(ii) Rental condominiums, time sharing housing units and similar accommodations;

(iii) Any bed and breakfast facility which, even though the facility may have once qualified as a bed and breakfast facility under this section, is enlarged to the point that the facility or complex includes more than eight bedrooms for commercial accommodation of paying overnight lodgers;

(iv) Hotels, motels, hostels and resort lodging facilities.

(3) Corporation. -- The term "corporation" means any corporation, joint-stock company or association and any business conducted by a trustee or trustees wherein interest or ownership is evidenced by a certificate of interest or ownership or similar written instrument, or any entity treated as a corporation for federal income tax purposes.

(4) 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 Department of Revenue, 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.

(5) Eligible taxpayer. --

(A) The term "eligible taxpayer" means any person subject to
the taxes imposed by article twenty-one, twenty-three or twenty-four of this chapter that makes qualified investment pursuant to the terms of a certified project plan in qualified tourism development property.
(B) The term "eligible taxpayer" also includes an affiliated group of taxpayers if the group elects to file a consolidated corporation net income tax return under article twenty-four of this chapter and if one or more affiliates included in the affiliated group would qualify as an eligible taxpayer under paragraph (A) of this subdivision.

(C) The term "eligible taxpayer" does not include this state, any state, territory or district of the United States, the United States or, any agency, governmental subdivision, authority, commission, department, division, office, bureau, branch, board, district or other unit, or instrumentality of federal, state, county or local government or any public corporation, or governmental instrumentality or quasi-governmental instrumentality or entity created by statute or ordinance.

(6) Includes and including. -- The terms "includes" and "including", when used in a definition contained in this article, do not exclude other things otherwise within the meaning of the term defined.

(7) Natural person or individual. -- The term "natural person" and the term "individual" mean a human being. The terms "natural
person" and "individual" do not mean, and specifically exclude any corporation, limited liability company, partnership, joint venture, trust, organization, association, agency, governmental subdivision, syndicate, affiliate or affiliation, group or unit or any entity other than a human being.
(8) Partnership and partner. -- The term "partnership" includes a syndicate, group, pool, joint venture or other unincorporated organization through or by means of which any business, financial operation or venture is carried on, and which is not a trust or estate, a corporation or a sole proprietorship. The term "partner" includes a member in a syndicate, group, pool, joint venture or organization.

(9) Person. -- The term "person" includes any natural person, corporation, limited liability company or partnership.

(10) Qualified investment. -- The term "qualified investment" means qualified investment as determined under section five of this article.

(11) Qualified tourism development area. -- The term "qualified tourism development area" means any of those counties of this state that have, for the calendar year immediately preceding the calendar year when qualified tourism investment property is to be placed in service or use in the county, a county average annual unemployment rate that is at least one percentage point greater than the statewide unemployment average percentage, as determined
by Workforce West Virginia: Provided, That the Commissioner of the Division of Tourism may propose legislative rules for legislative approval further restricting inclusion of counties in any qualified tourism development area and describing those counties of this state that qualify as qualified tourism development areas or parts thereof, but in no case may any county be designated a qualified tourism development area that has a county average annual unemployment rate that is less than one percentage point greater than the statewide unemployment average percentage, as determined under this subdivision.
(12) Qualified tourism development property. --

(A) The term "qualified tourism development property" means property purchased or leased pursuant to the terms of a certified project plan for the purpose of expanding, improving, enlarging, constructing or creating in a qualified tourism development area:

(i) A site, area or facility which will constitute a tourism attraction, as defined in this section, or part of a tourism attraction; or

(ii) A bed and breakfast facility located in this state, which primarily serves individuals who participate in, patronize or attend a tour or trip constituting a tourism attraction, or who visit an area, site or facility constituting a tourism attraction, primarily for the purpose of personal entertainment, recreation or amusement. The term "lodging facility" means a temporary place to
stay or a place where overnight accommodations for sleeping and shelter are available.
For purposes of this section, the terms expanding, improving and enlarging mean:

If a bed and breakfast facility: Expansion, improvement or enlargement such as to create additional lodging capacity at least ten percent greater than such capacity, measured at the maximum, of the lodging facility as it existed immediately prior to the expansion, improvement or enlargement: Provided, That any bed and breakfast facility which is enlarged to the point that the facility or complex includes more than eight bedrooms for commercial accommodation of paying overnight lodgers does not constitute qualified tourism development property, even though the facility may have once qualified as a bed and breakfast facility under this article prior to the expansion.

If an area, site or facility constituting a tourism attraction, expansion, improvement or enlargement as to create additional daily visitor or daily customer capacity at least ten percent greater than that capacity, measured at the maximum, of the area, site or facility as it existed immediately prior to the expansion, improvement or enlargement: Provided, That where there is replacement property, only betterments resulting in expansions of fifty percent or more, as specified in this section constitute qualified tourism development property.

(B) Excluded property. -- The term "qualified tourism development property" does not include:

(i) Property purchased or leased before July 1, 2007;

(ii) Property owned or leased by the taxpayer, investment in which qualifies for the business investment and jobs expansion tax credit under article thirteen-c of this chapter, without regard to whether the taxpayer actually takes or applies the business investment and jobs expansion tax credit against tax liabilities. Investment for which the business investment and jobs expansion tax credit is or would be allowed is not eligible for the credit allowed under this article, and no credit may be allowed or taken under this article for any such investment;

(iii) Property owned or leased by the taxpayer and for which the taxpayer was previously allowed tax credit under article thirteen-d of this chapter or tax credit under article thirteen-c of this chapter, the historic buildings and structures preservation tax credit under sections eight-a through eight-f, article twenty-one of this chapter or sections twenty-three-a through twenty-three-g, article twenty-four of this chapter or the tax credits allowed by this article;

(iv) Property owned or leased by the taxpayer and for which the seller, lessor or other transferor, was previously allowed tax credit under article thirteen-d of this chapter or tax credit under article thirteen-c of this chapter, the historic buildings and
structures preservation tax credit under sections eight-a through eight-f, article twenty-one of this chapter or sections twenty-three-a through twenty-three-g, article twenty-four of this chapter or the tax credits allowed by this article. However, successors in business are entitled to this credit to the extent of the predecessor's entitlement in accordance with section twelve of this article;
(v) Repair costs, including materials used in the repair;

(vi) Airplanes;

(vii) Property which is primarily used outside this state, with use being determined based upon the amount of time the property is actually used both within and without this state;

(viii) Property which is acquired incident to the purchase of the stock or capital assets of the seller, unless for good cause shown, the Tax Commissioner consents to waiving this requirement;

(ix) Natural resources in place;

(x) Property, either leased or purchased, the cost or consideration for which cannot be quantified with any reasonable degree of accuracy at the time the property is placed in service or use: Provided, That when the contract of purchase or lease specifies a minimum purchase price or minimum annual rent, the amount thereof shall be used to determine the qualified investment in the property under section five of this article if the property otherwise qualifies as qualified tourism development property;

(xi) Property purchased for ongoing maintenance and upkeep, repairs, facility maintenance or other maintenance, airplanes, motor vehicles licensed by the Division of Motor Vehicles, inventories, noncapitalized property and property that does not create additional lodging capacity or visitor or customer capacity. For purposes of this section, the term "noncapitalized property" means property, the cost of which is not required to be capitalized for federal income tax purposes under the Internal Revenue Code or the rules, regulations or policies implemented or promulgated by the United States Internal Revenue Service;

(xii) Property owned or leased, as lessee, by this state, any state, territory or district of the United States, the United States or, any agency, governmental subdivision, authority, commission, department, division, office, bureau, branch, board, district or other unit, or instrumentality of federal, state, county or local government or any public corporation, or governmental instrumentality or quasi-governmental instrumentality or entity created by statute or ordinance and located in a state park or elsewhere in this state. However, investment made by a qualified taxpayer in a facility or property located in a state park may constitute qualified tourism development property if investment therein would otherwise qualify for credit under this article;

(xiii) Replacement property, except certain replacement
property that will qualify as specified in this article. For purposes of this section, the term "replacement property" means property acquired by purchase or lease for the purpose of replacing other property in a facility, the investment in which replacement property would not have been made but for the loss of service, destruction, removal or other loss of the property which the replacement property is intended to replace: Provided, That significant betterments will be recognized as qualified tourism development property. The term "betterment" means and is limited to:
(I) Replacement property which enlarges the lodging capacity of a bed and breakfast facility in which the replacement property stalled or replaced by at least fifty percent; and

(II) Replacement property which enlarges the daily visitor or customer capacity of an area, site or facility that constitutes a tourism attraction by at least fifty percent. A betterment will be treated as significant if it enlarges capacity by at least fifty percent over the capacity, measured at the maximum, of the bed and breakfast facility or area, site or facility constituting a tourism attraction at the time the property which the replacement property is intended to replace was in operation. Replacement property which is installed or constructed to replace property that was destroyed by flood, storm or other casualty will constitute qualified tourism development property if the property would
otherwise qualify as such under this section if newly constructed, but the measure of the cost of the replacement property for purposes of this article will be reduced by any insurance proceeds or other proceeds received in compensation for the casualty loss;
(xiv) The term "qualified tourism development property," does not mean or include investment, by purchase or lease, in any property acquired from or between related entities. The Tax Commissioner can waive this prohibition against related entity acquisitions if the property was acquired from a related entity for the fair market value and there is no manipulation of the cost of, or amount of, investment in property for the purpose of gaining entitlement to the credit allowed under this article;

(xv) Any hotel, motel, resort lodging facility or other lodging facility other than a bed and breakfast facility;

(xvi) Any restaurant: Provided, That a bed and breakfast facility which offers only breakfast to its guests does not constitute a restaurant for purposes of this exclusion: Provided, however, That investment in a tourism attraction facility which contains or incorporates a restaurant into the otherwise qualified tourism attraction constitutes qualified tourism development property to the extent of investment in those parts or portions of the facility, other than the restaurant, that are not otherwise disqualified under this article.

(13) Related person. -- The term "related person" or "person
related to" a stated taxpayer means:
(A) An individual, corporation, partnership, affiliate, association or trust or any combination or group thereof controlled by the taxpayer; or

(B) An individual, corporation, partnership, affiliate, association or trust or any combination or group thereof that is in control of the taxpayer; or

(C) An individual, corporation, partnership, affiliate, association or trust or any combination or group thereof controlled by an individual, corporation, partnership, affiliate, association or trust or any combination or group thereof that is in control of the taxpayer; or

(D) A member of the same controlled group as the taxpayer. For purposes of this article, "control", with respect to a corporation means ownership, directly or indirectly, of stock possessing fifty percent or more of the total combined voting power of all classes of the stock of the corporation which entitles its owner to vote. "Control", with respect to a trust, means ownership, directly or indirectly, of fifty percent or more of the beneficial interest in the principal or income of the trust. The ownership of stock in a corporation, of a capital or profits interest in a partnership or association or of a beneficial interest in a trust shall be determined in accordance with the rules for constructive ownership of stock provided in Section
267(c), other than paragraph (3) of such section, of the United States Internal Revenue Code, as amended.
(14) State fiscal year. -- "State fiscal year" means a twelve-month period beginning on July 1 and ending on June 30.

(15) Tax attributable to qualified investment. -- "Tax attributable to qualified investment" means that amount of the consumers sales and service tax determined under section three-a of this article as tax attributable to qualified investment.

(16) Taxpayer. -- The term "taxpayer" means any person subject to the tax imposed by article twenty-one, twenty-three or twenty-four of this chapter, or any one or combination of those articles of this chapter.

(17) Tax year. -- "Tax year" means the tax year of a taxpayer as determined for federal income tax purposes.

(18) Tourism attraction. -- "Tourism attraction" means:

(A) Any of the following facilities, sites or areas occurring or present in this state:

(i)A cultural or historical site certified for those purposes of this article by the Division of Culture and History of the Department of Education and the Arts;

(ii) A recreational or entertainment facility;

(iii) An area of scenic beauty or a phenomenon of natural or scientific significance;

(iv) A theme park;

(v) An amusement park;

(vi) An indoor or outdoor theater or amphitheater for the exhibition of plays or live shows, but not theaters exclusively for the exhibition of moving pictures or video presentations;

(vii) Botanical gardens;

(viii) Cultural or educational centers other than primary and secondary schools and institutions of higher education;

(ix) Whitewater rafting trips, tours, areas or facilities or other water float trips, tours, areas or facilities;

(x) West Virginia state parks;

(xi) Rail excursion tours or facilities;

(xii) River boat tours or facilities;

(xiii) Excursions and tours over pathways, roads and trails established pursuant to the West Virginia Rails to Trails Program.

(xiv) Water sports facilities;

(xv) Boating or canoeing trips, tours, areas or facilities;

(xvi) Mountain biking trips, tours, areas and facilities;

(xvii) Cycling trips, tours, areas and facilities;

(xviii) Hunting areas and facilities;

(xix) Snow skiing, snow boarding and snow sport or snow recreation areas and facilities;

(xx) Fishing areas and facilities;

(xxi) Golf courses;

(xxii) Hiking trails, areas or facilities;

(xxiii) Bird watching areas or facilities;

(xxiv) Camping areas or facilities;

(xxv) Industrial tourism sites;

(xxvi) Sports arenas and sports centers;

(xxvii) Race tracks for automobile or motorcycle racing;

(B) The term "tourism attraction" does not mean or include:

(i) Any facility, site or area not wholly occurring in this state or not wholly located in this state;

(ii) Facilities, areas or sites that are primarily devoted to the retail sale of goods, unless the goods are created at the site of the tourism attraction or unless the sale of the goods is incidental to the tourism attraction;

(iii) Facilities, tours, trips, areas or sites that are not open to the public;

(iv) Facilities, sites or areas established, wholly or in part, for the purpose of conducting legalized or illegal gambling, or facilities, sites or areas where gambling occurs. For purposes of this definition the term "gambling" does not include charitable bingo gaming sponsored and operated by an organization licensed by this state to hold charitable bingo occasions. For purposes of this definition the term "gambling" does not include charitable raffle gaming sponsored and operated by an organization licensed by this state to hold charitable raffle occasions.

§11-13Z-4. Tax attributable to qualified investment.

(a) Annual determination of tax attributable to qualified investment. --

(1) Tax attributable to qualified investment is the excess of:

(A) The allowable portion of the consumers sales and service tax imposed by article fifteen of this chapter and collected by the eligible taxpayer from its patrons and vendees during the tax year over;

(B) The amount of the consumers sales and service tax imposed by article fifteen of this chapter and collected by the eligible taxpayer from its patrons and vendees in the base year.

(2) In any tax year when the amount described in paragraph (A), subdivision (1) of this subsection exceeds the amount described in paragraph (B), subdivision (1) of this subsection, tax attributable to qualified investment is zero.

(b) Allowable portion. -- The allowable portion of the consumers sales and service tax imposed by article fifteen of this chapter and collected by the eligible taxpayer from its patrons and vendees during the tax year is the total amount of consumers sales and service tax imposed by article fifteen of this chapter and collected by the eligible taxpayer from its patrons and vendees during the tax year less: Consumers sales and service tax collected as a result of the making of sales, or the providing of taxable services by the eligible taxpayer or the operation or use of any facility or business, or the result of any other activity
taxable under article fifteen of this chapter which is pursued, undertaken, engaged in or otherwise done subsequent to the placement of the qualified investment into service or use, but which is not:
(1) Directly attributable to and the direct result of the qualified investment; or

(2) Directly attributable to and the direct result of investment in place and owned or leased by the eligible taxpayer and in operation in the base year; or

(3) Directly attributable to or derived from the operation of any restaurant, hotel, motel or other lodging facility excluded from the definition of qualified tourism development property.

(c) Base year. -- The base year is the eligible taxpayer's tax year, for federal income tax purposes, immediately preceding the tax year during which any qualified investment is first placed into service or use.

(d) Multiple entitlements to credit. -- If there are multiple entitlements to the credit allowed under this article which arise under separate certified projects, the tax attributable to qualified investment, the allowable portion of the consumers sales and service tax imposed by article fifteen of this chapter and collected by the eligible taxpayer from its patrons and vendees during the tax year, and the base year shall be determined separately for each certified project.

(e) Tax attributable to qualified investment for purposes of the monthly or quarterly remittance of tax and assertion of credit. --

(1) For purposes of the monthly or quarterly filing and remittance of the consumers sales and service tax and the assertion of credit on the monthly or quarterly consumers sales and service tax return against tax attributable to qualified investment, the monthly or quarterly tax attributable to qualified investment is the excess of:

(A) The allowable portion, determined on a monthly or quarterly basis, of the consumers sales and service tax imposed by article fifteen of this chapter and collected by the eligible taxpayer from its patrons and vendees during the taxable month or taxable quarter over;

(B) The amount of the consumers sales and service tax imposed by article fifteen of this chapter and collected by the eligible taxpayer from its patrons and vendees in the corresponding taxable month or taxable quarter of the base year.

(2) In any taxable month or taxable quarter when the amount described in paragraph (B), subdivision (1) of this subsection exceeds the amount described in paragraph (A), subdivision (1) of this subsection, tax attributable to qualified investment for that taxable month or taxable quarter is zero.

(f) Annual reconciliation. --

(1) Eligible taxpayers who apply the credit allowed under this article on a monthly or quarterly basis shall make a reconciliation at the end of each tax year to determine the amount of annual tax credit allowable under this article for the tax year, based on annual tax attributable to qualified investment, and on the limitations set forth in section seven of this article;

(2) Within thirty days of the close of the tax year, the eligible taxpayer shall file an annual credit reconciliation statement on a form prescribed by the Tax Commissioner, and for those eligible taxpayers who have underpayments of tax or overpayments of tax shown on the reconciliation shall:

(A) P ay to the Tax Commissioner the amount of any credit taken in excess of the annual limitations, as shown on the annual credit reconciliation statement; or

(B) Apply to the Tax Commissioner for a refund of any tax overpayment resulting from the eligible taxpayer's failure to apply annual credit to which the eligible taxpayer was entitled.

§11-13Z-5. Eligibility for tax credits; certification of project plans by the Division of Tourism.

(a) A taxpayer who seeks to have a project certified pursuant to this article shall
submit to the Commissioner of the Division of Tourism an application for certification of a project plan, in the form prescribed by the Commissioner of the Division of Tourism, setting forth the project to be implemented, the amount of projected qualified investment to be made, the nature and location of the proposed project, the amount of total tax credits to be created by the proposed project under this article, an estimate of the number of new jobs to be created by the project and the schedule for implementing the project.
Every applicant for certification shall
pay to the Division of Tourism an application fee with each application for project certification filed with the Division of Tourism. The application fee shall be set by the Division of Tourism by legislative rule, but may in no case exceed the amount of $50 per project application. The application fee shall be deposited by the Division of Tourism in the Small Tourism Business Development Fund created under this article, and is nonrefundable to the applicant. The division may not certify or consider for certification any project until the application fee for that project has been paid.
(b) Receipt of applications for certification in the first and third quarters. -- The Commissioner of the Division of Tourism shall receive applications for certification of proposed projects during the first quarter and the third quarter of each state fiscal year. These quarters being held open for receipt of applications, the Commissioner of the Division of Tourism may not issue certification of any project during the first and third quarters of each state fiscal year.
(c) Issuance of certification in the second and fourth quarters. -- The Commissioner of the Division of Tourism shall, in the second quarter of the state fiscal year, certify, or deny certification of, those proposed projects for which applications for certification have been filed during the first quarter of the state fiscal year. The Commissioner of the Division of Tourism shall, in the fourth quarter of the state fiscal year certify, or deny certification of, those proposed projects for which applications for certification have been filed during the third quarter of the state fiscal year. No applications for certification may be accepted by the Commissioner of the Division of Tourism during the second and fourth quarters of the state fiscal year: Provided, That the Commissioner of the Division of Tourism may during any quarter accept information, documents or other material necessary to complete an application lawfully filed in a prior quarter, but found to be incomplete by the Commissioner of the Division of Tourism.
(d) No certification may be issued for any proposed project that is not in conformance with the requirements of this article.
(e) Applications for which the Commissioner of the Division of Tourism requires additional information do not constitute completed applications until the information has been received by the Commissioner of the Division of Tourism.
(f) Those projects for which certification is not issued by the Commissioner of the Division of Tourism within the next succeeding second or fourth quarter subsequent to the quarter during which the completed application for certification was received by the Division of Tourism are considered disapproved by operation of law.
(g) The Division of Tourism shall promptly notify an applicant as to whether an application for certification of a project plan has been approved or disapproved.
(h) Those applicants who receive certification of a project plan, and which otherwise comply with the requirements of this article, may place qualified tourism development property into service or use. Eligible taxpayers may begin taking the credit allowed under this article in the tax year when qualified investment is placed in service or use.
(i) Eligible taxpayers who make qualified investment in qualified tourism development property in a project certified under this article shall receive a tax credit as provided in section six of this article:
(1) No tax credit may be granted under this article for any investment except qualified investment in qualified tourism development property, as defined in this article, placed in service in a project which has been certified in accordance with the requirements of this article prior to the placement of the qualified investment into service or use;
(2) No tax credit may be granted under this article for any investment which, if allowed, would cause the amount of tax credit generated by the project to exceed the maximum amount of tax credit for which the project was certified as stated in the application for project certification filed with the Division of Tourism;
(3) No project may be certified, in whole or in part, for which the amount of the proposed investment exceeds $4 million. However, certification may not be negated or withdrawn for a project having a legitimate projected cost at the time of certification of $4 million
or less, solely by reason of cost overruns or unforseen circumstances which cause the ultimate cost of the certified project to exceed $4 million : Provided, That no tax credit may be allowed or taken for that portion of the investment which exceeds the amount for which the project was originally certified.
(j) All applications for certification of a project filed with the Division of Tourism, whether the project is certified or denied certification, are public information which may be viewed and copied by the public and, at the discretion of the Division of Tourism, published by the Division of Tourism.
(1) Decertification, withdrawal of certification suspension of certification. --
(A) The Commissioner of the Division of Tourism may, at the discretion of the Commissioner of the Division of Tourism, impose sanctions in circumstances where:
(i) The taxpayer has failed, in whole or in part, to place qualified investment into service or use as delineated in the application for project certification;
(ii) The taxpayer has obtained certification of a project under this article fraudulently; or
(B) A taxpayer has failed to remit to the tax department that portion of the consumers sales and service tax attributable to qualified investment, after withholding by the taxpayer of the credit allowed under this article.
(2) Sanctions. -- Upon determining the existence of one or more of the conditions set forth in subdivision (1) of this subsection, the Commissioner of the Division of Tourism may impose the following sanctions:
(A) Prospective revocation of the project certification. -- No tax credit may be allowed for any project for which certification has been revoked for periods subsequent to the effective date of revocation. Tax credit taken by any taxpayer or person in accordance with this article pursuant to the making of qualified investment in a certified project prior to the effective date of revocation of project certification is not subject to recapture by reason of revocation of the certification. However, the credit is otherwise subject to audit and adjustment or recapture in accordance with the requirements of this article and article ten of this chapter;
(B) Retroactive withdrawal of the project certification. -- No tax credit may be allowed for any project for which certification has been withdrawn. Tax credit taken by any taxpayer or person in accordance with this article pursuant to the making of qualified investment in a certified project for which certification is later withdrawn pursuant to the provisions of this section is not subject to recapture upon withdrawal of the certification;
(C) Suspension of the project certification for a stated period of time. -- No tax credit may be allowed for investment made during the suspension period for a project. Tax credit taken by any taxpayer or person in accordance with this article pursuant to the making of a qualified investment in a certified project prior to or subsequent to the suspension period is not subject to recapture by reason of the suspension. However, the credit is otherwise subject to audit and adjustment or recapture in accordance with the requirements of this article and article ten of this chapter;
(D) Decreasing the amount of tax credit or qualified investment for which the taxpayer or person is certified. -- The Commissioner of the Division of Tourism may decrease the amount of qualified investment or the amount of tax credit for which a given project is certified, so that the eligible taxpayer may continue to take the credit, but the amounts of total credit and annual tax credit allowed to be taken by the eligible taxpayer are decreased;
(E) Any combination of the aforementioned sanctions may be imposed at the discretion of the Commissioner of the Division of Tourism.
(k) Audits and investigations. --
(1) The Division of Tourism or the tax department, or both the Division of Tourism or the tax department, may initiate and carry out investigations or audits of any taxpayer or person or eligible taxpayer, applicant for project certification or recipient of project certification to determine whether:
(A) The taxpayer or person has failed, in whole or in part, to place qualified investment into service or use as delineated in the application for project certification;
(B) The taxpayer or person has obtained certification of a project under this article fraudulently; or
(C) A taxpayer or person has failed to remit to the tax department that portion of the consumers sales and service tax attributable to qualified investment, after withholding by the taxpayer or person of the credit allowed under this article.
(2) This article does not limit, impede or abrogate the powers of the Tax Commissioner to initiate and carry out investigations or audits of any taxpayer or person for the purpose of determining any amount of tax due, the correctness of any remittance of tax or withholding of tax, entitlement to any tax credit, and the amount of tax credit asserted or allowed, or any other matter relating to the administration and enforcement of the tax laws of this state.
(l) Procedures. --
(1) Notice of pending sanctions. -- Upon the making of a determination by the Commissioner of the Division of Tourism that sanctions be applied under this section, the Commissioner of the Division of Tourism shall serve upon the taxpayer or person against whom sanctions are to be applied a notice of pending sanctions.
(2) Service of notice, content of notice. -- The notice of pending sanctions shall be served upon the taxpayer or person in the same manner as an assessment of tax in accordance with article ten of this chapter. The notice of pending sanctions shall state the sanctions to be applied in accordance with this section, the effective date or dates of the sanctions, with specific statements of whether any sanction is to be applied retroactively or in part retroactively, and the commencement and termination dates for any suspensions of certification or temporary disqualifications of any taxpayer or person to be disqualified under this section from participation in certified projects. The notice of pending sanctions shall state that sanctions will be imposed sixty days after service of the notice of pending sanctions upon the taxpayer or person, unless the taxpayer or person effects a remedy of the cause for the sanction, satisfactory to the Commissioner of the Division of Tourism such as to allow the Commissioner of the Division of Tourism to waive, withdraw, modify or not impose the sanction.
(3) Appeals. -- The taxpayer or person may file an appeal of pending sanctions as if the notice of pending sanctions were an assessment of tax under article ten of this chapter, and the matter on appeal is subject to the procedures set forth in article ten of this chapter. On appeal, the burden of proof is on the taxpayer or person against whom sanctions are to be imposed to prove that the conditions for applying sanctions have not been met.
(4) Statutory confidentiality. -- Any proceeding relating to any amount of tax due or the recapture of tax credit taken under this article or any adjustment of the amount of tax credit taken under this article is subject to the provisions of article ten of this chapter, including all statutory confidentiality provisions, and is subject to all other applicable statutory tax confidentiality provisions of this code.
(m) Effect of a final determination, waiver of penalties or sanctions. -- The notice of pending sanctions becomes final sixty days after service unless an appeal is filed under this section, and is not subject to further appeal by the recipient. When a determination has become final that a taxpayer or person is subject to sanctions under this section, the sanctions described in the notice of pending sanctions apply, effective as of the date set forth in that notice, unless the taxpayer or person effects a remedy of the cause for the sanction, satisfactory to the Commissioner of the Division of Tourism such as to allow the Commissioner of the Division of Tourism to waive, withdraw, modify or not impose the sanction. The sanctions authorized under this section may be imposed, adjusted, withdrawn or waived, in whole or in part, at the discretion of the Commissioner of the Division of Tourism.
§11-13Z-6. Allowances and deposits; revolving funds.
(a) Project administration allowance. -- Out of consumers sales and service tax attributable to qualified investment remitted to the Tax Commissioner, the Tax Commissioner shall deposit in the Small Tourism Development Fund created under this article the lesser of:
(1) Two percent of the amount of the remaining tax attributable to qualified investment that is remitted to the tax department, after withholding by the eligible taxpayer of the credit allowed under this article; or
(2) Four-tenths percent of total tax attributable to qualified investment.
(b) Small Tourism Business Development Fund. --
(1) For the purpose of permitting payments to be made and costs to be met for operation of the program established by this article, there is hereby created a revolving fund for the Division of Tourism, which shall be known as the Small Business Tourism Development Fund. Moneys in the Small Tourism Business Development Fund shall be expended by the Division of Tourism for purposes of defraying the costs incurred by the Division of Tourism in administering the program established pursuant to this article, and for general administrative costs of the Division of Tourism.
(2) The Small Tourism Business Development Fund shall be accumulated and administered as follows:
(A) Portions of the consumers sales and service tax attributable to qualified investment remitted to the Tax Commissioner shall be deposited into the Small Tourism Business Development Fund by the Tax Commissioner as specified in this article;
(B) Any appropriations made to the Small Tourism Business Development Fund and all moneys therein are not considered to have expired at the end of any fiscal period;
(c) Tax administration allowance. -- Out of consumers sales and service tax attributable to qualified investment remitted to the Tax Commissioner, the Tax Commissioner shall deposit in the general tax administration fund created under this article the lesser of:
(1) Two percent of the remaining tax attributable to qualified investment that is remitted to the Tax Commissioner after withholding by the eligible taxpayer of the credit allowed under this article; or
(2) Four-tenths percent of total tax attributable to qualified investment.
(d) General Tax Administration Fund. --
(1) There is hereby created a revolving fund for the tax department which shall be known as the General Tax Administration Fund. The tax department administration fee paid under this article shall be paid by the Tax Commissioner into the State Treasury and deposited to the credit of the Tax Department General Tax Administration Fund. Moneys in the Tax Department General Tax Administration Fund must be expended by the tax department for the purpose of defraying costs incurred by the tax department for handling remittances and deposits for the program established pursuant to this article and for costs of general tax administration.
(2) The Tax Department General Tax Administration Fund shall be accumulated and administered as follows:
(A) Portions of the consumers sales and service tax attributable to qualified investment shall be deposited into the Small Tourism Business Development Fund by the Tax Commissioner as specified in this article;
(B) Any appropriations made to the Tax Department General Tax Administration Fund and all moneys therein are not considered to have expired at the end of any fiscal period.
§11-13Z-7. Qualified investment.
(a) General. -- Qualified investment in qualified tourism development property is the applicable percentage of the cost of property purchased or leased and constituting qualified tourism development property as defined in this article which is placed in service or use in this state by the taxpayer during the taxable year.
(b) Applicable percentage. -- For the purpose of subsection (a) of this section, the applicable percentage of any property shall be determined under the following table:
If useful life is:
The applicable

percentage is:
Four years or more but less than six years .......33-%
Six years or more but less than eight years ......66|%

Eight years or more ..............................100%
The useful life of any property, for purposes of this section, shall be determined as of the date the property is first placed in service or use in this state by the taxpayer, determined in accordance with federal income tax law.
(c) Cost. -- For purposes of subsection (a) of this section, the cost of each property purchased for business expansion shall be determined under the following rules:
(1) Trade-ins. -- Cost does not include the value of property given in trade or exchange for the property purchased for business expansion;
(2) Damaged, destroyed or stolen property. -- If property is damaged or destroyed by fire, flood, storm or other casualty, or is stolen, then the cost of replacement property does not include any insurance proceeds received in compensation for the loss;
(3) Rental property. --
(A) The cost of real property acquired by written lease for a primary term of ten years or longer is one hundred percent of the rent reserved for the primary term of the lease, not to exceed twenty years. Real property leased for a primary term of less than ten years does not constitute qualified tourism development property.
(B) The cost of tangible personal property acquired by written lease for a primary term of:
(i) Four years, or longer, is one third of the rent reserved for the primary term of the lease;
(ii) Six years, or longer, is two thirds of the rent reserved for the primary term of the lease; or
(iii) Eight years, or longer, is one hundred percent of the rent reserved for the primary term of the lease, not to exceed twenty years: Provided, That in no event may rent reserved include rent for any year subsequent to expiration of the book life of the equipment, determined using the straight-line method of depreciation.
(4) Self-constructed property. -- For self-constructed property, the cost thereof is the amount properly charged to the capital account for depreciation in accordance with federal income tax law.
(5) Transferred property. -- The cost of property used by the taxpayer out-of-state and then brought into this state, is determined based on the remaining useful life of the property at the time it is placed in service or use in this state, and the cost is the original cost of the property to the taxpayer less straight line depreciation allowable for the tax years or portions thereof taxpayer used the property outside this state. For leased tangible personal property, cost is to be based on the period remaining in the primary term of the lease after the property is brought into this state for use in a new or expanded business facility of the taxpayer, and is the rent reserved for the remaining period of the primary term of the lease, not to exceed twenty years, or the remaining useful life of the property, whichever is less.
§11-13Z-8. Amount of credit allowed.
(a) Credit allowed. --
Eligible taxpayers are allowed a credit, the application of which and the amount of which are determined as provided in this article.
(b) Amount of credit. -- The amount of credit allowable is twenty-five percent of the amount of the taxpayer's qualified investment, as defined in this article: Provided, That for a qualified investment in a bed and breakfast facility, as defined in this article, the amount of credit allowable is fifty percent
of the amount of the taxpayer's qualified investment, as defined in this article.
(c) Application of credit over either five years or ten years at the election of the taxpayer, limitations. --
At the election of the taxpayer, the amount of credit allowable under this article must be taken over either a five-year period or over a ten-year period. The election to take the credit over a ten-year period or a five-year period must be made in the application for certification of the project filed with the Commissioner of the Division of Tourism under this article. The election is irrevocable for the life of the credit. The amount of credit allowed under this article must be taken as follows:
(1) If over a ten-year period, at the rate of one tenth of the amount thereof per tax year, beginning with the tax year in which the taxpayer places the qualified tourism development property into service or use, unless the taxpayer elected to delay the beginning of the ten-year period until the next succeeding tax year. This election must be made in the annual income tax return filed for the tax year in which credit is first taken on the qualified investment placed into service or use by the taxpayer. Once made, the election cannot be revoked. A tax credit is allowable under this article only for the tax year of the eligible taxpayer in which the qualified tourism development property is placed in service or use, or at the election of the eligible taxpayer, the next succeeding tax year, and for the next succeeding nine tax years.
(2) If over a five-year period, at the rate of one fifth of the amount thereof per tax year, beginning with the tax year in which the taxpayer places the qualified tourism development property into service or use, unless the taxpayer elected to delay the beginning of the five-year period until the next succeeding tax year. This election must be made in the annual income tax return filed for the tax year in which credit is first taken on the qualified investment placed into service or use by the taxpayer. Once made, the election cannot be revoked. A tax credit is allowable under this article only for the tax year of the eligible taxpayer in which the qualified tourism development property is placed in service or use, or at the election of the eligible taxpayer, the next succeeding tax year, and for the next succeeding four tax years.
(d) Placed in service or use. -- For purposes of the credit allowed by this article, property is considered placed in service or use in the earlier of the following taxable years:
(1) The taxable year in which, under the taxpayer's depreciation practice, the period for depreciation with respect to the property begins; or
(2) The taxable year in which the property is placed in a condition or state of readiness and availability for a specifically assigned function.
§11-13Z-9. Application of annual credit allowance.
(a) In general. -- The aggregate annual credit allowance for a current tax year is an amount equal to the sum of the following:
(1) If taken over a ten-year period;
(A) The one-tenth part allowed under section six of this article for qualified tourism development property placed into service or use during a prior tax year; plus
(B) The one-tenth part allowed under section six of this article for qualified tourism development property placed into service or use during the current tax year;
(2) If taken over a five-year period:
(A) The one-fifth part allowed under section six of this article for qualified tourism development property placed into service or use during a prior tax year; plus
(B) The one-fifth part allowed under section six of this article for qualified tourism development property placed into service or use during the current tax year.
(b) Application of current year annual credit allowance. -- The amount determined under subsection (a) of this section is allowed as a credit out of the consumers sales and service tax imposed by article fifteen of this chapter and collected by the vendor from its patrons and vendees on and after the date qualified investment is placed in service or use, which amount would otherwise be remitted periodically by the eligible taxpayer to the Tax Commissioner, the eligible taxpayer shall withhold the lesser of:
(1) The annual credit determined under subsection (a) of this section; or
(2) Up to eighty percent of tax attributable to qualified investment;
(3) The amount so withheld by the eligible taxpayer out of each monthly or quarterly periodic remittance may not exceed eighty percent of the total periodic remittance of tax attributable to qualified investment which would otherwise be forwarded to the Tax Commissioner;
(4) Amounts of consumers sales and service tax withheld by the eligible taxpayer in accordance with this subsection become the property of the eligible taxpayer in satisfaction of the credit allowed under this article.
(c) The credit allowed under this article does not apply against any other tax remittance or against any tax other than as specified in this section.
(d) Unused credit forfeited. -- If any annual credit allowable for the taxable year, as determined under subsection (a) of this section, remains after application of subsection (b) of this section, the amount thereof shall be forfeited. No carryover to a subsequent taxable year or carryback to a prior taxable year may be allowed for the amount of any unused portion of any annual credit allowance.
§11-13Z-10. Assertion of the tax credit, reporting.
(a) Any eligible taxpayer who claims a tax credit as provided in this article shall file with the monthly or quarterly periodic remittance to the Tax Commissioner of the consumers sales and service tax collected, a statement, in a form prescribed by the Tax Commissioner, of the amount of the consumers sales and service tax withheld by the eligible taxpayer out of the periodic remittance, along with any other information as the Tax Commissioner requires.
(b) Any eligible taxpayer who claims a tax credit as provided in this article shall file with the West Virginia Tax Commissioner, in a form prescribed by the Tax Commissioner, an annual tax credit reporting schedule stating the amount of the qualified tourism development property which the taxpayer has placed into service or use. The eligible taxpayer shall
file with the tax credit reporting schedule a certificate, issued by the Commissioner of the Division of Tourism, evidencing certification of the project plan by the Commissioner of the Division of Tourism, pursuant to which the qualified tourism development property was placed into service or use.
(c) In the tax credit reporting schedule required under this section, the taxpayer must provide all information required by the Tax Commissioner's prescribed form.
(d) The tax credit reporting schedule shall
be filed with the annual return for the taxes imposed by article twenty-four of this chapter for the tax year in which the qualified investment was first placed into service or use pursuant to a certified project plan: Provided, That if the eligible taxpayer is not required to file a tax return under article twenty-four of this chapter, then the tax credit reporting schedule shall be filed with the annual return for the taxes imposed by article twenty-three of this chapter for the year: Provided, however, That if the eligible taxpayer is not required to file a tax return under article twenty-three or twenty-four of this chapter, then the tax credit reporting schedule shall be filed with the annual return for the taxes imposed by article twenty-one of this chapter for the year.
(e) The Tax Commissioner may disallow any credit claimed under this article for which a properly completed tax credit reporting schedule or other required documentation, statements or proofs are not timely filed.
§11-13Z-11. Total maximum aggregate tax credit amount; certification of projects.

(a) The total amount of tax credits allowed under this article may not exceed $10 million in any state fiscal year.
(b) Applications for project certification must be filed with the Division of Tourism. The Division of Tourism shall record the date each application is filed. All complete and valid applications shall
be considered for approval or disapproval in a timely manner by the Division of Tourism.
(c) When the total amount of tax credits certified under this article equals the maximum amount of tax credits allowed, as specified in subsection (a) of this section, in any state fiscal year, no further certifications may be issued in that same fiscal year.
(d) All applications filed in any state fiscal year and not certified during the state fiscal year in which they are filed are void by operation of law on the last day of the state fiscal year in which they are filed, and all applicants which elect to seek certification of a project plan must file anew on and after the first day of the succeeding state fiscal year.
(e) A project may not be certified under this article if the amount of qualified investment exceeds $4 million
.
(f) A series of projects or group or number of projects may not be certified under this article for any person or group of related persons if the amount of aggregate qualified investment exceeds $4 million
.
§11-13Z-12. Forfeiture of unused tax credits; redetermination of credit allowed; credit recapture.

(a) Disposition of property or cessation of use. -- If during any taxable year, property with respect to which a tax credit has been allowed under this article:
(1) Is disposed of prior to the end of its useful life; or
(2) Ceases to be used in an eligible business of the taxpayer in this state prior to the end of its useful life, then the unused portion of the credit allowed for the property will be forfeited for the taxable year and all ensuing years. Additionally, except when the property is damaged or destroyed by fire, flood, storm or other casualty, or is stolen, the taxpayer shall
redetermine the amount of credit allowed in all earlier years by reducing the applicable percentage of cost of the property allowed under section seven of this article, to correspond with the percentage of cost allowable for the period of time that the property was actually used in this state in the new or expanded business of the taxpayer. The taxpayer shall then file a reconciliation statement with the tax credit reporting schedule filed under section ten of this article, for the year in which the forfeiture occurs. If the amount of credit taken exceeds the amount of credit allowed as redetermined, the taxpayer shall pay the recapture tax as specified in this article.
(b) Cessation of operation of business facility. -- If during any taxable year the taxpayer ceases operation of qualified tourism development property in this state for which credit was allowed under this article, before expiration of the useful life of the property with respect to which tax credit has been allowed under this article, then the unused portion of the allowed credit is forfeited for the taxable year and all ensuing years. Additionally, except when the cessation is due to fire, flood, storm or other casualty, the taxpayer must redetermine the amount of credit allowed in earlier years by reducing the applicable percentage of cost of the property allowed under section five of this article, to correspond with the percentage of cost allowable for the period of time that the qualified tourism development property was actually used in this state in the business of the taxpayer. The taxpayer shall
then file a reconciliation statement with the annual tax credit reporting schedule filed under section eight of this article, for the year in which the forfeiture occurs. If the amount of credit taken exceeds the amount of credit allowed as redetermined, the taxpayer shall pay the recapture tax as specified in this article.
§11-13Z-13. Recapture of credit; recapture tax imposed.
(a) When recapture tax applies. --
(1) If it appears upon audit or otherwise that a taxpayer has not placed qualified tourism development property into service or use as represented but has nevertheless taken the credit allowed by this article, the taxpayer shall
pay the recapture tax as specified in this section.
(2) Any person who places qualified tourism development property in service or use in this state, and who fails to use the qualified tourism development property for at least the period of its useful life, determined as of the time the property was placed in service or use under section seven of this article, or the period of time over which tax credits allowed under this article with respect to such property are applied under this article, whichever period is less, that person shall
pay the recapture tax imposed by subsection (b) of this section.
(3) This section does not apply when section twelve of this article applies. However, the successor, or the successors, and the person, or persons, who previously claimed credit under this article with respect to the qualified tourism development property and the new jobs attributable thereto, are jointly and severally liable for payment of any recapture tax subsequently imposed under this section with respect to the qualified tourism development property and new jobs.
(b) Recapture tax imposed. -- The recapture tax imposed by this section is the amount determined as follows:
The taxpayer shall
recapture an amount of credit equal to the difference between:
(1) The amount of credit claimed under section nine of this article for the taxable year, and all preceding taxable years; and
(2) The amount of credit:
(A) That would have been claimed in those years if the amount of credit allowable under section seven of this article had been determined based on the qualified tourism development property which remains in service, plus;
(B) An amount equal to the amount of interest that would have been imposed on the difference between the amount that was claimed and the amount that should have been claimed over the period of time outstanding, in accordance with the interest provisions of article ten of this chapter, as if that amount were tax underpaid. In addition, the recapture tax may, at the discretion of the Tax Commissioner include an amount equal to the statutory penalties that can be imposed under article ten of this chapter if it appears that the taxpayer has engaged in conduct that would have resulted in the imposition of the penalties in accordance with article ten of this chapter.
(c) Payment of recapture tax. -- The recapture tax imposed under this section is due and payable on the day the person's annual return is due for the taxable year in which this section applies, under article twenty-one or twenty-four of this chapter. When the employer is a partnership, or S corporation, for federal income tax purposes, the recapture tax is a joint and several liability of and shall
be paid by those persons who are partners in the partnership, or shareholders in the S corporation, in the taxable year in which recapture occurs under this section.
(d) Imposition of the recapture tax under this article does not limit or abrogate the authority of the Tax Commissioner to audit and assess tax and to administer and audit the application and entitlement to, and calculation of, the credit allowed under this article in accordance with the provisions of article ten of this chapter.
(e) The provisions of the "West Virginia Tax Procedure and Administration Act" set forth in article ten of this chapter, apply to the recapture tax imposed by this article with like effect as if that act were set forth in extenso in this article, except where it is expressly and specifically provided in this article that a particular provision of this article governs and controls.
§11-13Z-14. Transfer of qualified investment to successors.
(a) Mere change in form of business. -- Qualified tourism development property may not be treated as disposed of under section twelve of this article by reason of a mere change in the form of conducting the business as long as the qualified investment property is retained in a business in this state, and the eligible taxpayer retains a controlling interest in the successor business. In that event, the successor business is allowed to claim the amount of credit still available with respect to the business facility or facilities transferred, and the transferor
taxpayer is not required to redetermine the amount of credit allowed in earlier years.
(b) Transfer or sale to successor. -- Qualified tourism development property may not be treated as disposed of under section twelve of this article by reason of any transfer or sale to a successor business which continues to operate the business facility in this state. Upon transfer or sale, the transferee successor acquires the amount of credit that remains available under this article for each subsequent taxable year for which the credit would have been available to the transferor, and the transferor is not required to redetermine the amount of credit allowed in earlier years.
§11-13Z-15. Identification of qualified tourism development property.

Every taxpayer who claims credit under this article shall maintain sufficient records to establish the following facts for each item of qualified tourism development property:
(1) Its identity;
(2) Its actual or reasonably determined cost;
(3) Its straight-line depreciation life;
(4) The month and taxable year in which it was placed in service;
(5) The amount of credit taken; and
(6) The date it was disposed of or otherwise ceased to be qualified property.
§11-13Z-16. Failure to keep records of qualified tourism development property.

A taxpayer who does not keep the records required for identification of qualified tourism development property is subject to the following rules:
(1) A taxpayer will be treated as having disposed of, during the taxable year, any qualified tourism development property which the taxpayer cannot establish was still on hand, in this state, at the end of that taxable year.
(2) If a taxpayer cannot establish when qualified tourism development property reported during the taxable year for purposes of claiming this credit was placed in service, the taxpayer will be treated as having placed it in service in the most recent prior year in which similar property was placed in service, unless the taxpayer can establish that the property placed in service in the most recent year is still on hand. If that occurs, the taxpayer will be treated as having placed the returned property in service in the next most recent year.
§11-13Z-17. Public information relating to tax credit.
The Tax Commissioner shall annually publish in the State Register the name and address of every taxpayer asserting this credit, and the amount of any credit asserted under this article by each taxpayer; and the confidentiality provisions of section four-a, article one, or section five-d, article ten of this chapter, or of any other provision of this code, do not apply to that information.
§11-13Z-18. Audits and examinations; information sharing.
(a) The Tax Commissioner may, at his or her discretion, perform joint audits or examinations with the Division of Tourism or independently audit or examine the books, records and other information, as appropriate, of any taxpayer or of any person, organization or entity which has filed an application for certification of a project plan under this article, or of any taxpayer which has asserted this credit, or of any person, organization or entity believed to have relevant information relating to this credit, its application, or the taxes against which the credit may apply.
(b) For purposes of joint audits, or any administrative or judicial proceeding or procedure relating to any tax credit taken, asserted or sought under this article, the Tax Commissioner may share that tax information as the Tax Commissioner considers appropriate with the Division of Tourism, notwithstanding the provisions of section four-a, article one of this chapter or section five-d, article ten of that chapter, or any other provision of this code to the contrary.
§11-13Z-19. Program evaluation; expiration of credit; preservation of entitlements.

(a) On or before September 30, 2001, the Division of Tourism shall secure an independent review of the Small Business Tourism Development Act Program as created by this article and present the findings to the Legislature. The review shall focus upon:
(1) The cost effectiveness of the program;
(2) A calculation of the cost of the program per net job created (net of any jobs lost due to the nonretention of businesses competing with businesses entitled to the credit allowed under this article);
(3) The jobs creation effectiveness of the program;
(4) The value of the program with regard to fostering economic development, particularly showing any increases in out-of-state money flowing into West Virginia through tourism and resulting from the program;
(5) The effect of the program on the retention of businesses that existed in West Virginia prior to the implementation of the program, and the competitive effect of the credit upon those businesses.
(b) Pursuant to this report, and any independent evaluation that the Legislature or the Joint Committee on Government Operations may wish to initiate, the Joint Committee on Government Operations shall issue a recommendation to the Legislature, not later than February 1, 2012, as to whether the program should continue.
(c) Unless continued by Act of the Legislature, the Small Business Tourism Development Act terminates on July 1, 2012
unless sooner terminated.
(d) Unless continued by Act of the Legislature, no entitlement to the tax credit under this article may result from any investment in qualified tourism development property placed in service or use after July 1, 2012
, and no credit may be available to any taxpayer for any property placed into service or use after that date. Taxpayers which have gained entitlement to the credit pursuant to qualified investment in qualified tourism development property placed in service or use in certified projects prior to July 1, 2012 , may retain that entitlement and apply the credit in due course, provided the requirements and limitations of this article are otherwise met.
§11-13Z-20. General procedure and administration.
Except for the specific exceptions set forth in this article, from the tax information and tax return information confidentiality provisions of article ten of this chapter, every provision of the "West Virginia Tax Procedure and Administration Act" set forth in article ten of this chapter applies to the credit allowed by this article with like effect as if the act were applicable only to the credit and were set forth with respect thereto in extenso in this article.
§11-13Z-21. Rules.
The Tax Commissioner shall propose legislative rules as may be necessary to carry out the purpose of this article and to implement the intent of the Legislature. The rules shall be promulgated in accordance with the provisions of article three, chapter twenty-nine-a of this code.



NOTE: The purpose of this bill is to create a tax incentive for the creation, construction or enlargement of tourism attractions or amenities. The credit operates to allow the taxpayer to recover up to twenty-five percent or, in the case of bed and breakfast facilities, fifty percent, of qualified eighty percent investment in a tourism attraction or amenity by offsetting up to eighty percent of consumers sales and service tax collected by the taxpayer from customers over a period of either five or ten years at the election of the taxpayer.

This article is new; therefore, strike-throughs and underscoring have been omitted.

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