SB 601 — Relating to personal income tax

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Red = new code to be enacted WEST virginia legislature regular session IntroducedCommittee Substitute for Senate Bill 601 By Senator Facemire [Introduced[Originating Februaryin 19,the 2018;Committee on Finance;

Referredreported toon theFebruary Committee23, on2018] Finance]    A BILL to amend and reenact §11-21-20 of the Code of West Virginia, 1931, as amended, relating to personal income tax;

and alleviating double taxation on foreign income at the state level.level;

and sunsetting the credit for income tax paid on foreign income in 2068.

Credit for income tax of another state.state and foreign country.

--– A resident shall be is allowed a credit against the tax otherwise due under this article for any income tax imposed for the taxable year by another state of the United States, or by the District of Columbia, or by a foreign country upon income both derived therefrom and subject to tax under this article.

--– (1) The credit under this section shall may not exceed the percentage of the tax otherwise due under this article determined by dividing the portion of the taxpayer'staxpayer’s West Virginia income subject to taxation by such the other jurisdiction by the total amount of the taxpayer'staxpayer’s West Virginia income.

(2) The credit under this section shall may not reduce the tax otherwise due under this article to an amount less than would have been due if the income subject to taxation by such the other jurisdiction were excluded from the taxpayer'staxpayer’s West Virginia income.

--– No credit shall be is allowed under this section for a tax of a jurisdiction which allows residents of this state a credit against the taxes imposed by such the other jurisdiction for the tax under this article, if such the other credit is substantially similar to the credit granted by §11-21-40 of this code.

(d) Definition.Sunset provision.

--– ForThe purposescredit allowed against the tax otherwise due under this article for any income tax imposed for the taxable year by a foreign country upon income both derived therefrom and subject to tax under this article shall be effective from the amendment and reenactment of this section Westduring Virginiathe incomeregular means:session of the Legislature in 2018 through July 1, 2068.

(1)(e) TheDefinition. West Virginia adjusted gross income of an individual, or (2) The amount of the income of an estate or trust, determined as if the estate or trust were an individual computing his or her West Virginia adjusted gross income under §11-21-12 of this code.

– For purposes of this section, West Virginia income means:

(1) The West Virginia adjusted gross income of an individual;

or (2) The amount of the income of an estate or trust, determined as if the estate or trust were an individual computing his or her West Virginia adjusted gross income under §11-21-12 of this code.

The section sunsets the credit for foreign income in 2068.

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