HB 2760 — Relating to economic development incentive tax credits

HB2760 SFASFAT #1 Weld 4-8 BaileyBailey  7853   Senator Weld moved to amend the bill onby pagestriking eighteen,out afterthe linetitle sixty-six,and bysubstituting addingtherefor twoa new sections,title, designated sections eight-a and twenty-three-a, to read as follows:

ARTICLEEng. 21.

PERSONALCom. INCOME TAX.

§11-21-8a.Sub.

Credit for qualifiedHouse rehabilitatedBill buildings2760—A investment.Bill to amend and reenact §11-13Q-9, §11-13Q-10, §11-13Q-10a, and §11-13Q-22 of the Code of West Virginia, 1931, as amended;

Ato creditamend againstand thereenact tax§11-21-8a imposed by the provisions of thissaid articlecode; is allowed as follows:

(a)and Certifiedto historicamend structures.and reenact §11-24-23a of said code, all relating to economic development incentive tax credits;

—modifying For certified historic structures, the crediteconomic isopportunity equaltax tocredit; 10 percent of qualified rehabilitation expenditures as defined in §47(c)(2), Title 26 of the United States Code, as amended:

Provided,authorizing That for qualified rehabilitation expenditures made after December 31, 2017, pursuant to an historic preservation certification application, Part 2 – Description of Rehabilitation, received by the stateeconomic historicopportunity preservationtax office after December 31, 2017, the credit allowedfor by this section is equal to 25 percent of the qualifiedcreation rehabilitation expenditure, subject to the limitations and other provisions of §11-24-23a10 ofjobs thisunder code:certain circumstances;

Provided,eliminating however, That the credit authorized by this section for qualified rehabilitation expenditures made after December 31, 2017, may not be used to offsetbusiness taxfranchise liabilitiestax; of the taxpayer prior to the tax year beginning on or after January 1, 2020:

Providedterminating further,small Thatbusiness the taxpayer is not entitled to this credit if,after whena thecertain applicantdate; begins to claim the credit and throughout the time period within which the credit is claimed, the taxpayer is in arrears in the payment of any tax administered by the Tax Division or the taxpayer is delinquent in the payment of any local or municipal tax, or the taxpayer is delinquent in the payment of property taxes on the property containing the certified historic tax structure when the applicant begins to claim the credit and throughout the time period within which the credit is claimed.

Theauthorizing Taxcertain Commissionermanufacturing shallactivities promulgateto proceduralqualify rulesfor inhigh accordancetechnology withmanufacturing §29A-3-1tax etcredit; seq.

ofdefining thisterms; code that provide what information must accompany any claim for the tax credit for the determination that the taxpayer is not in arrears in the payment of any tax administered by the Tax Division, is not delinquent in the payment of any local or municipal tax, nor is the taxpayer delinquent in the payment of property taxes on the property containing the certified historic tax structure, and such other administrative requirements as the Tax Commissioner may specify.

Thislimiting creditcertain ismultiple availabletax credits for both residential and nonresidential buildings located in this state, that are reviewed by the Westsame Virginiaqualified Divisioninvestment; of Culture and History and designated by the National Park Service, United States Department of the Interior as “certified historic structures”, and further defined as a “qualified rehabilitated building”, as defined under §47(c)(1), Title 26 of the United States Code, as amended.

 (b)striking Theobsolete taxreference creditto allowedprevailing bywage thisrequirement; section is eliminated after December 31, 2022:

Provided,providing Thateffective anydates; tax credits authorized by the state historic preservation officer and eligible to be claimed prior to January 1, 2023, shall continue to be eligible to be claimed subject to the provisions of law governing those tax credits that were in effect prior to January 1, 2023 (a) Any unused portion of the credit for qualified rehabilitated buildings investment authorized by this section which may not be taken in the taxable year to which the credit applies does not qualify for carryback and carryforward treatment subject to the identical general provisions under § 39, Title 26 of the United States Code, as amended:

Provided,modifying That the amount of the credit taken in a taxable year shall in no event exceed the tax liability due for thequalified taxablerehabilitated year:buildings investment;

Provided,eliminating however,the Thattermination fordate tax years beginning on and after January 1, 2020, any unused portion of the creditcredit; authorized by this section may not be carried back to any prior taxable year:

Providedproviding further, That for taxcarryback years beginning on and aftercarryforward Januaryprovisions 1,for 2020, any unused portion of the credit authorized by this section may be carried over to each of the next 10 tax yearscredit; following the first tax year for which the credit entitlement is authorized under this article for a specific qualified rehabilitation buildings investment until used to exhaustion or forfeited due to lapse of time.

(b) Effective for taxable years beginning on and aftereliminating Januarythe 1,maximum 2021,allowable creditsamount granted to an electing small business corporation (S corporation), limited partnership, general partnership, limited liability company, or multiple owners of property shall be passed through to the shareholders,tax partners,credit. members, or owners, either pro-rata or pursuant to an agreement among the shareholders, partners, members, or owners, documenting an alternative distribution method.

The  Tax  Commissioner  shall  promulgateAdopted proceduralRejected rules  in  accordance with §29A-3-1 et seq.

of this code that provide the method of reporting the alternative method of distribution authorized by this section.

ARTICLE 24.

CORPORATION NET INCOME TAX.

§11-24-23a.

Credit for qualified rehabilitated buildings investment.

(a) A credit against the tax imposed by the provisions of this article shall be allowed as follows:

Certified historic structures.

— For certified historic structures, the credit is equal to 10 percent of qualified rehabilitation expenditures as defined in §47(c)(2), Title 26 of the United States Code, as amended:

Provided, That for qualified rehabilitation expenditures made after December 31, 2017, pursuant to an historic preservation certification application, Part 2 – Description of Rehabilitation, received by the state historic preservation office after December 31, 2017, the credit allowed by this section is equal to 25 percent of the qualified rehabilitation expenditure:

Provided, however, That the credit authorized by this section for qualified rehabilitation expenditures made after December 31, 2017, may not be used to offset tax liabilities of the taxpayer prior to the tax year beginning on or after January 1, 2020:

Provided further, That the taxpayer is not entitled to this credit if, when the applicant begins to claim the credit and throughout the time period within which the credit is claimed, the taxpayer is in arrears in the payment of any tax administered by the Tax Division or the taxpayer is delinquent in the payment of any local or municipal tax, or the taxpayer is delinquent in the payment of property taxes on the property containing the certified historic tax structure when the applicant begins to claim the credit and throughout the time period within which the credit is claimed.

The Tax Commissioner shall promulgate procedural rules in accordance with §29A-3-1 et seq.

of this code that provide what information must accompany any claim for the tax credit for the determination that the taxpayer is not in arrears in the payment of any tax administered by the Tax Division, is not delinquent in the payment of any local or municipal tax, nor is the taxpayer delinquent in the payment of property taxes on the property containing the certified historic tax structure, and such other administrative requirements as the Tax Commissioner may specify.

This credit is available for both residential and nonresidential buildings located in this state that are reviewed by the West Virginia Division of Culture and History and designated by the National Park Service, United States Department of the Interior as “certified historic building”, and further defined as a “qualified rehabilitated building”, as defined under §47(c)(1), Title 26, of the United States Code, as amended.

(b) Allocations and maximum amounts of tax credits per project and per fiscal year (1) No more than $10 million of the tax credits authorized by this section and section eight-a, article twenty-one of this chapter may be allocated, reserved or issued by the state historic preservation officer to any single certified rehabilitation.

(2) No more than $30 million of the tax credits authorized by this section and section eight-a, article twenty-one of this chapter cumulatively may be issued by the state historic preservation officer for use in any given West Virginia state fiscal year, and any amount remaining up to $30 million may not be carried over to a subsequent West Virginia state fiscal year.

(3) At the beginning of each fiscal year, no less than $5 million of the tax credits authorized by this section and §11-21-8a of this code shall be set aside for reservation and the issuance of tax credits for certified rehabilitation projects with proposed tax credits of $500,000.  The balance of any amount set aside for these projects that has not been reserved pursuant to the procedures in subsection (c) of this section by the end of the fiscal year shall be allocated by the state historic preservation officer for the projects in any amount of other pending applicants otherwise eligible for the issuance of tax credits under this section and section eight-a, article twenty-one of this chapter in the order that the applications for those projects were received.

(c) (b) Procedure for issuance of tax credits reservations and certificates by the state historic preservation officer.

— (1) Any claim for the tax credits authorized pursuant to this section and §11-21-8a of this code shall be accompanied by a tax credit certificate issued by the state historic preservation officer.