2020 Legislative update
The 2020 Regular Session of the West Virginia Legislature ended on Saturday, March 7, 2020. During the Regular Session a number of tax and tax related bills were enacted affecting various taxes and tax programs. This document briefly describes each bill.
Copies of the bills enacted by the Legislature, called enrolled bills, are available at the Legislature’s website:
http://www.wvlegislature.gov/Bill_Status/bill_status.cfm.
The following bill numbers are linked to the current location of the enrolled bills at the Legislature’s website. When the Legislature’s website is updated for the next legislative session, the user can find these bills by making sure they selected “Bills 2020” at the above-referenced location.
SB 232 Charitable Gaming
This bill amends W. Va. Code §47-21-2, §47-21-20, and §47-21-26 relating to charitable raffles by removing outdated prohibitions against electronic or mechanical ticket dispensers and readers.
This bill took effect May 31, 2020.
SB 300 Corporate Income Tax
This bill updates the meaning of “federal taxable income” and certain other terms used in the West Virginia Corporation Net Income Tax Act to incorporate federal changes made before January 1, 2020.
This bill took effect February 14, 2020 but is retroactive to January 1, 2020.
SB 307 Property Tax – Sale of delinquent real property
This bill amends W. Va. Code §11A-3-23(b) by correcting an internal code reference. The bill took effect May 29, 2020.
SB 310 Personal Income Tax
This bill updates the meaning of “federal adjusted gross income” and certain other terms used in the West Virginia Personal Income Tax Act to incorporate federal changes made before January 1, 2020.
This bill took effect February 17, 2020 but is retroactive to January 1, 2020.
SB 321 Tax Administration
This bill amends W. Va. Code §11-10-11 and §11-15-18a relating to collection of tax and priority of distribution of estate or property in receivership.
The bill took effect May 12, 2020.
SB 357 Legislative Rules Promulgations
This bill authorizes the State Tax Department and certain other agencies in the Department of Revenue to promulgate legislative rules.
This bill took effect February 5, 2020.
SB 530 Consumer Sales and Use Taxes
This bill amends W. Va. Code §11-15-9 to exempt from the Consumers Sales and Service Tax and Use Tax the sale of aircraft sold in West Virginia on or after July 1, 2020 and are registered outside this State, so long as the aircraft is removed from the State within 60 days of the date of purchase.
This bill took effect July 1, 2020.
SB 578 Business and Occupation Tax
This bill amends W. Va. Code §11-13-2o to provide a method for determining the business and occupation tax on the privilege of generating, producing, or selling electricity generated by solar energy facilities.
This bill took effect July 1, 2020 but applies to taxable periods beginning on or after January 1, 2020.
SB 719 Health Care Provider Tax
This bill amends and reenacts W. Va. Code §11-27-10a, which imposes a health care-related tax on health maintenance organizations. Tier I and II rates of tax were increased; the Tier III rate was reduced; and the Tier IV and V rates were not changed by the bill.
This bill took effect July 1, 2020, for tax periods beginning on and after that date. However, imposition and collection of the tax was contingent on the tax being approved by the Centers for Medicare and Medicaid Services. The bill also provides that the tax is repealed as of June 30, 2023.
SB 793 Business and Occupation Tax
This bill amends W. Va. Code §11-13-2q and adds new §11-13-2r, relating to business and occupation taxes imposed on certain coal-fired electric generating units.
This bill took effect July 1, 2020 However, some changes are retroactive to January 1, 2020.
SB 816 Property Tax
This bill amends W. Va. Code §11-6F-1, et seq., relating to the Special Method for Appraising Qualified Additions to Manufacturing Facilities. The bill amends the definition of “manufacturing” in W. Va. Code §11-6F-2 by updating the North American Industry Classification system code reference for natural gas processing plants. This change is effective July 1, 2020.
SB 816 Tax Credits
SB 816 also amends W. Va. Code §11-13S-1 et seq., relating to the Manufacturing Investment Credit. The bill amends the definition of “manufacturing” in W. Va. Code §11-13S-2 by updating the North American Industry Classification system code reference for natural gas processing plants. This change is effective July 1, 2020.
HB 2149 Tax Credits
This bill amends W. Va. Code §11-13DD-3, relating to the Farm-To-Food Bank Tax Credit, by increasing the credit percentage from 10% to 30% of the value of the donated agricultural product, not to exceed $2,500 during a taxable year. This credit may be applied against personal or corporation net income taxes.
This bill took effect May 29, 2020.
HB 2967 Property Transfer Tax
This bill amends W. Va. Code §11-22-2 to permit a county to retain a portion of the state excise taxes imposed on the privilege of transferring title to real property in the county. For the fiscal year beginning July 1, 2021, 10% of the state tax is retained by the county. An additional 10% of the state excise tax may be retained for each fiscal year thereafter until July 1, 2030, when the state tax rate becomes zero.
This bill took effect June 5, 2020.
HB 4019 Tax Credits
This bill creates the Downstream Natural Gas Manufacturing Investment Tax Credit Act of 2020 in new article W. Va. Code §11-13GG-1 et seq.
The purpose of the credit is to incentivize downstream manufacturing using natural gas liquids such as ethane. The amount of credit allowable depends upon the cost of the qualified investment property and the number of new jobs created. The allowable credit is taken over a 10-year period at the rate of one-tenth per year. Unused credit may be carried forward for another 10 years.
Property that qualifies for another tax credit in chapter 11 of the West Virginia Code is not eligible for credit under this bill. Similarly, qualified investment property under this bill is not eligible for another credit under chapter 11 of the Code. The bill includes rules for administration and enforcement of the credit. The credit applies to qualified investment property placed in service or use at a downstream natural gas manufacturing facility in this state.
This bill took effect June 3, 2020.
HB 4090 Severance Tax
This bill amends W. Va. Code §11-13A-3a and adds a new §22-6-29a to the Code.
The purpose of the bill is to reduce the severance tax on marginal oil and natural gas wells, excluding wells utilizing horizontal drilling techniques targeting shale formations, to 2.5% from 5% and to provide that the 2.5% tax paid on such wells is to be used by the Secretary of the Department of Environmental Protection to plug abandoned oil and gas wells without a responsible operator through the use of a new fund called the Oil and Gas Abandoned Well Plugging Fund established in §22-6-29a.
The vertical oil and gas wells which are affected by the severance tax reduction produce on average more than 5,000 cubic feet of natural gas, or one-half barrel of oil, per day but less than 60,000 cubic feet of natural gas, or 10 barrels of oil, per day. However, if on June 1, 2023, or on June 1 of any year thereafter, there exists in the Oil and Gas Abandoned Well Plugging Fund an amount equal to or exceeding the sum of $6 million then the 2.5% rate of tax imposed is reduced to zero for the taxable year beginning on and after the next succeeding January 1.
The Tax Commissioner is required to issue an Administrative Notice by July 1 of each year indicating the balance in the fund as of the immediately preceding June 1 and the rate of tax on wells beginning the next January 1.
This bill took effect June 1, 2020 but applies to taxable periods beginning on or after January 1, 2020.
HB 4113 Motor Fuel Excise Tax
This bill amends W. Va. Code §11-14C-9 and §11-14C-30, relating to motor fuel excise taxes to exempt certain purchases of fuel for use in a power take-off unit of a fuel delivery truck from the variable rate of the motor fuel excise tax; and changes the method of calculating refund for motor fuel casualty losses.
This bill took effect July 1, 2020.
HB 4421 Tax Credits
This bill creates the Natural Gas Liquids Economic Development Act, see W. Va. Code § 5B-2J-1 et seq., and the West Virginia Natural Gas Liquids Property Tax Adjustment Act, see W. Va. Code § 11-13HH-1 et seq.
The purpose of this bill is to encourage development, transportation, and use of natural gas liquids in the state by providing certain tax credits related to the transportation and storage of natural gas liquids.
This bill took effect June 3, 2020.
HB 4439 Severance Tax
This bill amends W. Va. Code §11-13EE-1 et seq. relating generally to Coal Severance Tax Rebate. It provides for rebate of severance tax when capital investment made in new machinery and equipment directly used in severance of coal, or in coal preparation and processing plants results in increased coal production.
This bill took effect June 5, 2020. However, it applies to certain capital investment in new machinery and equipment placed in service or use in this state on or after July 1, 2019.
HB 4452 Delinquent Property
This bill amends W. Va. Code §11A-3-18, §11A-3-22, §11A-3-52, and §11A-3-55 relating to sales of delinquent real property for property tax purposes.
The purpose of this bill is to modify the notice requirements for the redemption of delinquent properties. The bill took effect June 5, 2020.
Note: These sections are administered by the State Auditor.
HB 4558 Tax Credits
This bill amends W. Va. Code §11-10-14a by adding a personal income tax refund checkoff that allows a person to donate a portion or all of his or her tax refund to the Donel C. Kinnard Memorial State Veterans Cemetery for purposes of operating and maintaining the cemetery.
This bill also adds the High-Wage Growth Business Tax Credit Act, in W. Va. Code §11-13II-1 et seq.; and the West Virginia Volunteer Firefighter Tax Credit Act in W. Va. Code §11-13JJ-1 et seq.
While this bill took effect June 5, 2020, the volunteer firefighter tax credit first applies to taxable years beginning after December 31, 2022.
Applications for the High-Wage Growth Business Tax Credit are filed with, and approved by, the West Virginia Development Office. No more than $5 million of tax credits may be authorized during any fiscal year of the State. The amount of allowable credits may be used to offset personal and corporation net income taxes.
West Virginia Volunteer Firefighter Tax Credit is allowed against the first $1,000 ($2,000 when a joint return is file) of the volunteer firefighter’s West Virginia personal income tax liability for taxable years beginning after December 31, 2022.
HB 4958 Personal Income Tax
This bill amends W. Va. Code §§8-10-2a, §8-10-2b, §17B-3-3a, §17B-3-3c, §50-3-2a, and §62-4-17, all relating generally to eliminating suspension of a person’s driver license for failure to pay court fines and costs. The bill eliminates language allowing personal income tax refunds to be offset for failure to pay municipal court fines.
This bill took effect July 1, 2020.
HB 4969 Tax Credits
This bill provides a credit of up to $2,000 against personal income tax or corporate net income tax for the donation or sale of a vehicle to a charitable organization for low-income workers after December 31, 2020.
This bill took effect May 31, 2020.