SB 63 — Creating five-year tax credits for hemp manufacturing

NEWS RELEASES HELPFUL LINKS IntroducedSB63 VersionSUB1 « Senate Bill 63 History OTHER VERSIONS  —  CommitteeIntroduced SubstituteVersion (1)  |   |  Email Key:

Red = new code to be enacted WEST virginia legislature regular session IntroducedCommittee Substitute for Senate Bill 63 By Senators Beach, Romano, and FacemireFacemire, [Introducedoriginal Januarysponsors 8,[Originating 2020;in the Committee on Agriculture and Rural Development;

referredreported on February 13, 2020]     A BILL to amend the CommitteeCode onof AgricultureWest Virginia, 1931, as amended, by adding thereto a new article, designated §11-29-1 and Rural§11-29-2, Development;all relating to creating five-year tax credits for eligible taxpayers primarily engaged in industrial hemp manufacturing;

anddefining thenterms; to the Committee on Finance] A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §11-29-1, §11-29-2, and §11-29-3, all relating to creating five-year tax credits for persons engaged in industrial hemp manufacturing;

setting eligibility forth requirements for application of credit for tax credit;years beginning on or after January 1, 2021;

establishing amount of tax credit allowed;

establishing how the credit may be applied;

ARTICLE 28.29.

“Industrial“Eligible hemp”taxpayer” means alla partsperson andsubject varietiesto any of the planttaxes cannabisimposed sativaby L.§11-21-1 et seq.

containingor no§11-24-1 greateret thanseq., oneof percentthis tetrahydrocannabinol.code, or any combination of those articles, who is primarily engaged in industrial hemp manufacturing.

“Industrial hemphemp” manufacturing” means usingall industrialparts hempand grownvarieties inof thisthe stateplant toCannabis manufacturesativa consumerL. products.   §11-29-2.

Eligibilityand any part of the plant, including the seeds of the plant and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with no greater than 0.3% tetrahydrocannabinol, or the THC concentration for credit.hemp defined in 7 U.S.C.

For§ those5940, taxwhichever years beginning on or after January 1, 2021, a person engaged in industrial hemp manufacturing is allowedgreater. a credit against certain taxes imposed by this chapter, as described in §11-29-3 of this code, if the person engaged in industrial hemp manufacturing meets the following requirements:

(1)“Industrial Thehemp entitymanufacturing” ismeans aany corporation, small business corporation,activity limitedthat liabilityuses company,industrial partnership,hemp orgrown unincorporatedby businesspersons entitylicensed withby athe principalCommissioner place of businessAgriculture inpursuant theto state;§19-12E-1 et seq.

andof (2)this Manufacturescode, consumerand productsthat fromis industrialclassified hempas grownhaving bya personssector licensedidentifier, byconsisting of the Commissionfirst two digits of Agriculturethe pursuantsix-digit toNorth §19-12E-1American etIndustry seq.Classification System code number, of 31, 32, or 33:

ofProvided, That this code;term does not include manufacturing cannabidiol (CBD) products.

§11-29-3.§11-29-2.

— For those tax years beginning on or after January 1, 2021, an eligible persontaxpayer engaged in industrial hemp manufacturing is allowed a tax credit in the amount of 50 percent of the person’seligible taxpayer’s capital expenditures (as defined in Section26 263U.S.C. of the United States Internal Revenue Code of 1986, as amended) for the first five taxable years.

The§ dollar263) amountfor of the creditfirst claimedfive bytaxable anyears. eligible person engaged in industrial hemp manufacturing may not exceed the amount of 50 percent of the entity’s state income tax for a single year.

The dollar amount of the credit claimed by an eligible taxpayer may not exceed the amount of 50 percent of the eligible taxpayer’s state income tax liability for a single year.

— The The credit created byunder this article isshall allowedreduce as a credit against the taxpayer’scorporate statenet income tax liabilityimposed appliedunder as§11-24-1 providedet inseq. subdivisions (1) and (2) of this subsection, and in that order.

of this code and the personal income tax imposed under §11-21-1 et seq.

of this code, in that order, subject to the following conditions and limitations:

— Any The credit isshall first be applied to reduce the taxescorporation net income tax imposed byunder §11-24-1 et seq.

of this code for(determined thebefore taxableapplication year.of any other allowable credits against tax).

  (2) Personal income taxes.

— After application of subdivision (1) of this subsection, any unused credit isshall be next applied as follows:

(A)  If the person making the qualified investment is an electing small business corporation (as defined in Section 26 1361U.S.C. of the United States Internal Revenue Code of 1986, as amended), a partnership or a limited liability company that is treated as a partnership for federal income tax purposes, then any unused credit is allowed as a credit against the taxes imposed by §11-21-1 et seq.

of§ this1361), codea onpartnership, theor incomea fromlimited businessliability orcompany otherthat activityis subjecttreated toas a partnership for federal income tax underpurposes, §11-23-1then any unused credit is allowed as a credit against the taxes imposed by §11-21-1 et seq.

(d) EligibilityA requirements.tax credit is subject to recapture, elimination, or reduction if it is determined by the Commissioner that a taxpayer was not entitled to the credit, in whole or in part, in the tax year in which it was claimed by the taxpayer.

—The Thoseamount businessesof credit that benefitflows fromthrough otherto stateequity economicowners developmentof programsa orpass-through incentivesentity thatmay resultbe inrecaptured aor reductionrecovered offrom theireither incomethe taxtaxpayer liabilityor duethe areequity notowners eligiblein forthe thisdiscretion taxof credit.the Commissioner.

(e) Rule-makingThose authority.businesses that benefit from other state economic development programs or incentives that result in a reduction of their income tax liability due are not eligible for this tax credit.

—(f) The StateCommissioner Tax Division may propose rules for promulgation by the Legislature in accordance with §29A-3-1 et seq.

The purpose of this bill is to create a five-year tax creditscredit for persons primarily engaged in industrial hemp manufacturing.

The bill establishes eligibility requirements for the tax credit and the amount of tax credit allowed.

    Bill Status  |  Bill Tracking  |  Legacy WV Code  |  Bulletin Board  |  District Maps  |  Senate Roster  |  House Roster  |  Live  |  Blog  |  Jobs  |  Links  |  Home This Web site is maintained by the West Virginia Legislature's Office of Reference & Information.