ARTICLE 1A. APPRAISAL OF PROPERTY.
ARTICLE 1B. ADDITIONAL REVIEW OF PROPERTY APPRAISALS; IMPLEMENTATION.
ARTICLE 1C. FAIR AND EQUITABLE PROPERTY VALUATION.
ARTICLE 4. ASSESSMENT OF REAL PROPERTY.
ARTICLE 5. ASSESSMENT OF PERSONAL PROPERTY.
ARTICLE 6. ASSESSMENT OF PUBLIC SERVICE BUSINESSES.
ARTICLE 6A. POLLUTION CONTROL FACILITIES TAX TREATMENT.
ARTICLE 6B. HOMESTEAD PROPERTY TAX EXEMPTION.
ARTICLE 6C. SPECIAL METHOD FOR APPRAISING DEALER VEHICLE INVENTORY.
ARTICLE 6D. ALTERNATIVE-FUEL MOTOR VEHICLES TAX CREDIT.
ARTICLE 6E. SPECIAL METHOD FOR VALUATION OF CERTAIN MANUFACTURING PRODUCTION PROPERTY.
ARTICLE 6F. SPECIAL METHOD FOR APPRAISING QUALIFIED CAPITAL ADDITIONS TO MANUFACTURING FACILITIES.
ARTICLE 6G. ASSESSMENT OF INTERSTATE PUBLIC SERVICE CORPORATION MOTOR VEHICLE BUSINESSES REGISTERED UNDER A PROPORTIONAL REGISTRATION AGREEMENT.
ARTICLE 6H. VALUATION OF SPECIAL AIRCRAFT PROPERTY.
ARTICLE 6I. SENIOR CITIZEN PROPERTY TAX PAYMENT DEFERMENT ACT.
ARTICLE 6J. SPECIAL METHOD FOR VALUATION OF CERTAIN HIGH-TECHNOLOGY PROPERTY.
ARTICLE 6K. ASSESSMENT OF INDUSTRIAL PROPERTY AND NATURAL RESOURCES PROPERTY.
ARTICLE 8A. COUNTY-WIDE LEVY FOR DISTRICT DEBT SERVICE.
ARTICLE 9. CRIMES AND PENALTIES.
ARTICLE 10A. WEST VIRGINIA OFFICE OF TAX APPEALS.
ARTICLE 10B. TAX PENALTY AND ADDITIONS TO TAX AMNESTY.
ARTICLE 10D. TAX AMNESTY PROGRAM.
ARTICLE 10E. TAX SHELTER VOLUNTARY COMPLIANCE PROGRAM.
ARTICLE 11A. INTERSTATE COMPROMISE OF INHERITANCE AND DEATH TAXES.
ARTICLE 11B. INTERSTATE ARBITRATION OF INHERITANCE AND DEATH TAXES.
ARTICLE 12. BUSINESS REGISTRATION TAX.
ARTICLE 12A. ANNUAL TAX ON INCOMES OF CERTAIN CARRIERS.
ARTICLE 12B. MINIMUM SEVERANCE TAX ON COAL.
ARTICLE 12C. CORPORATE LICENSE TAX.
ARTICLE 12D. ESTABLISHMENT OF OFFICE OF BUSINESS REGISTRATION; CREATION OF CENTRALIZED RECORDS.
ARTICLE 13. BUSINESS AND OCCUPATION TAX.
ARTICLE 13A. SEVERANCE AND BUSINESS PRIVILEGE TAX ACT.
ARTICLE 13AA. COMMERCIAL PATENT INCENTIVES TAX ACT.
ARTICLE 13BB. WEST VIRGINIA INNOVATIVE MINE SAFETY TECHNOLOGY TAX CREDIT ACT.
ARTICLE 13C. BUSINESS INVESTMENT AND JOBS EXPANSION TAX CREDIT.
ARTICLE 13CC. ENERGY INTENSIVE INDUSTRIAL CONSUMERS REVITALIZATION TAX CREDIT.
ARTICLE 13D. TAX CREDITS FOR INDUSTRIAL EXPANSION AND REVITALIZATION, RESEARCH AND DEVELOPMENT PROJECTS, CERTAIN HOUSING DEVELOPMENT PROJECTS, MANAGEMENT INFORMATION SERVICES FACILITIES, INDUSTRIAL FACILITIES PRODUCING COAL-BASED LIQUIDS USED TO PRODUCE SYNTHETIC FUELS, AND AEROSPACE INDUSTRIAL FACILITY INVESTMENTS.
ARTICLE 13DD. WEST VIRGINIA FARM-TO-FOOD BANK TAX CREDIT.
ARTICLE 13E. BUSINESS AND OCCUPATION TAX CREDIT FOR COAL LOADING FACILITIES.
ARTICLE 13F. BUSINESS AND OCCUPATION TAX CREDIT FOR REDUCING ELECTRIC AND NATURAL GAS UTILITY RATES FOR LOW-INCOME RESIDENTIAL CUSTOMERS.
ARTICLE 13G. TAX CREDIT FOR REDUCING TELEPHONE UTILITY RATES FOR CERTAIN LOW-INCOME RESIDENTIAL CUSTOMERS.
ARTICLE 13H. BUSINESS AND OCCUPATION TAX CREDIT FOR INCREASED GENERATION OF ELECTRICITY.
ARTICLE 13I. TAX CREDIT FOR EMPLOYING FORMER EMPLOYEES OF COLIN ANDERSON CENTER WHO LOST THEIR JOBS DUE TO THE CLOSURE OF COLIN ANDERSON CENTER.
ARTICLE 13J. NEIGHBORHOOD INVESTMENT PROGRAM.
ARTICLE 13K. TAX CREDIT FOR AGRICULTURAL EQUIPMENT.
ARTICLE 13L. THE NATURAL GAS INDUSTRY JOBS RETENTION ACT.
ARTICLE 13M. TAX CREDIT FOR NEW VALUE-ADDED WOOD MANUFACTURING OPERATIONS.
ARTICLE 13N. TAX CREDIT FOR NEW STEEL MANUFACTURING OPERATIONS AFTER JULY 1, 1998.
ARTICLE 13O. TAX CREDIT FOR NEW ALUMINUM OR POLYMER MANUFACTURING OPERATIONS AFTER JULY 1, 1998.
ARTICLE 13P. TAX CREDIT FOR MEDICAL LIABILITY INSURANCE PREMIUMS.
ARTICLE 13Q. ECONOMIC OPPORTUNITY TAX CREDIT.
ARTICLE 13R. STRATEGIC RESEARCH AND DEVELOPMENT TAX CREDIT.
ARTICLE 13S. MANUFACTURING INVESTMENT TAX CREDIT.
ARTICLE 13T. TAX CREDIT FOR COMBINED CLAIMS MADE MEDICAL MALPRACTICE PREMIUMS AND MEDICAL MALPRACTICE LIABILITY TAIL INSURANCE PREMIUMS PAID.
ARTICLE 13U. HIGH-GROWTH BUSINESS INVESTMENT TAX CREDIT.
ARTICLE 13V. WORKERS\' COMPENSATION DEBT REDUCTION ACT.
ARTICLE 13W. APPRENTICESHIP TRAINING TAX CREDITS.
ARTICLE 13X. WEST VIRGINIA FILM INDUSTRY INVESTMENT ACT.
ARTICLE 13Y. THE WEST VIRGINIA MANUFACTURING PROPERTY TAX ADJUSTMENT ACT.
ARTICLE 13Z. RESIDENTIAL SOLAR ENERGY TAX CREDIT.
ARTICLE 14. GASOLINE AND SPECIAL FUEL EXCISE TAX.
ARTICLE 14A. MOTOR CARRIER ROAD TAX.
ARTICLE 14B. INTERSTATE FUEL TAX AGREEMENT.
ARTICLE 14C. MOTOR FUEL EXCISE TAX.
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
ARTICLE 15B. STREAMLINED SALES AND USE TAXES.
ARTICLE 17. TOBACCO PRODUCTS EXCISE TAX ACT.
ARTICLE 18. EXCISE TAX ON USE, CONSUMPTION OR STORAGE OF CIGARETTES.
ARTICLE 19. SOFT DRINKS TAX.
ARTICLE 21. PERSONAL INCOME TAX.
ARTICLE 22. EXCISE TAX ON PRIVILEGE OF TRANSFERRING REAL PROPERTY.
ARTICLE 23. BUSINESS FRANCHISE TAX.
§11-23-2. Short title; arrangement of sections or portions thereof.
§11-23-3. Meaning of terms; specific terms defined.
§11-23-3a. Meaning of terms; general rule.
§11-23-5. Apportionment of tax base.
§11-23-5a. Special apportionment rules - financial organizations.
§11-23-6. Imposition of tax; change in rate of tax.
§11-23-7. Persons and other organizations exempt from tax.
§11-23-8. Accounting periods and methods of accounting.
§11-23-9a. Method of filing for business taxes.
§11-23-10. Extension of time for filing returns.
§11-23-11. Time and place for paying tax shown on returns.
§11-23-12. Extensions of time for paying tax.
§11-23-13. Declaration and payment of estimated tax.
§11-23-14. Requirements concerning returns, notices, records and statements.
§11-23-15. Signing of returns and other documents.
§11-23-16. Place for filing returns or other documents.
§11-23-17. Credits against tax; expiration of credits.
§11-23-17a. (Effective July 1, 1987) Tax credit for business investment and jobs expansion; industrial expansion and revitalization; eligible research and development projects; coal loading facilities.
§11-23-17b. Application of tax credits.
§11-23-18. Tax under this article in addition to all other taxes.
§11-23-21. General procedure and administration.
§11-23-23. Information return and due date thereof; penalty for failure to file, waiver thereof; short taxable year provisions.
§11-23-24a. Tax credit for value-added products from raw agricultural products; regulations; termination of credit.
§11-23-25. Credit for consumers sales and service tax and use tax paid.
§11-23-27. Credit for franchise tax paid to another state.
§11-23-28. Notice of business activities report.
ARTICLE 24. CORPORATION NET INCOME TAX.
ARTICLE 25. TAX RELIEF FOR ELDERLY HOMEOWNERS AND RENTERS.
ARTICLE 26. HEALTH CARE PROVIDER MEDICAID TAX.
ARTICLE 27. HEALTH CARE PROVIDER TAXES.
This business franchise tax on corporations and partnerships is enacted pursuant to the provision of article X, section one of the Constitution of this state, granting to the Legislature the authority to tax privileges, franchises and incomes of persons and corporations. The Legislature finds and declares that this franchise tax is imposed on the privilege of doing business in this state, and that this tax is not an ad valorem property tax imposed on the property of corporations and partnerships doing business in this state.
This article shall be known and may be cited as the "Business Franchise Tax Act." No inference, implication or presumption of legislative construction or intent shall be drawn or made by reason of the location or grouping of any particular section, provision or portion of this article; and no legal effect shall be given to any descriptive matter or heading relating to any part, section, subsection or paragraph of this article.
(a) General. -- When used in this article, or in the administration of this article, terms defined in this section shall have the meanings ascribed to them herein unless a different meaning is clearly required by either the context in which the term is used, or by specific definition in this article.
(1) Business income. -- The term "business income" means income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management and disposition of the property or the rendering of services in connection therewith constitute integral parts of the taxpayer's regular trade or business operations.
(iv) Less the cost of treasury stock.
(vii) Less the cost of treasury stock.
(C) Partnerships. -- In the case of a partnership, the average of the beginning and ending year balances of the value of partner's capital accounts from Schedule L of Federal Form 1065, prepared following accepted accounting principles and as filed by the taxpayer with the Internal Revenue Service for the taxable year.
(D) Additional items in capital. -- The term "capital" for purposes of this article shall include such adjustments thereto as the Tax Commissioner deems necessary to properly reflect capital and such additional items from the accounts of the taxpayer as the Tax Commissioner may by regulation prescribe, which fairly represent the net equity of the taxpayer as defined in accordance with generally accepted accounting principles.
(IV) Loans primarily secured by a lien or security agreement on residential property in the form of a mobile home, modular home or double-wide, located in this state and occupied by nontransients.
(ii) The denominator of which is the average of the monthly beginning and ending account balances of the total assets of the taxpayer as shown on Schedule L of Federal Form 1120, as filed by the taxpayer with the Internal Revenue Service or, in the case of partnerships, Schedule L of Federal Form 1065, as filed by the taxpayer with the Internal Revenue Service.
(3) Commercial domicile. -- The term "commercial domicile" means the principal place from which the trade or business of the taxpayer is directed or managed: Provided, That the commercial domicile of a financial organization, which is subject to regulation as such, shall be at the place designated as its principal office with its regulating authority.
(4) Commissioner or Tax Commissioner. -- The terms "commissioner" or "Tax Commissioner" are used interchangeably herein and mean the Tax Commissioner of the State of West Virginia, or his delegate.
(5) Compensation. -- The term "compensation" means wages, salaries, commissions and any other form of remuneration paid to employees for personal services.
(6) Corporation. -- The term "corporation" includes any corporations, S corporation, joint-stock company and any association or other organization which is taxable as a corporation under federal income tax laws or the income tax laws of this state.
(7) Delegate. -- The term "delegate" in the phrase "or his delegate", when used in reference to the Tax Commissioner, means any officer or employee of the State Tax Department 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 or regulations promulgated thereunder.
(8) Doing business. -- The term "doing business" means any activity of a corporation or partnership which enjoys the benefits and protection of the government and laws of this state, except the activity of agriculture and farming, which shall mean the production of food, fiber and woodland products (but not timbering activity) by means of cultivation, tillage of the soil and by the conduct of animal, livestock, dairy, apiary, equine or poultry husbandry, horticulture, or any other plant or animal production and all farm practices related, usual or incidental thereto, including the storage, packing, shipping and marketing, but not including any manufacturing, milling or processing of such products by persons other than the producer thereof.
The activity of agriculture and farming shall mean such activity, as above defined, occurring on not less than five acres of land and the improvements thereon, used in the production of the aforementioned activities, and shall mean the production of at least $1,000 of products per annum through the conduct of such principal business activities as set forth in section ten, article one-a, chapter eleven of this code.
(9) Domestic corporation. -- The term "domestic corporation" means a corporation organized under the laws of this state, and certain corporations organized under the laws of the state of Virginia before June 20, 1863. Every other corporation is a foreign corporation.
(10) Federal Form 1120. -- The term "Federal Form 1120" means the annual federal income tax return of any corporation made pursuant to the United States Internal Revenue Code of 1986, as amended, or in successor provisions of the laws of the United States, in respect to the taxable income of a corporation, and filed with the federal Internal Revenue Service. In the case of a corporation that elects to file a federal income tax return as part of an affiliated group, but files as a separate corporation under this article, then as to such corporation Federal Form 1120 means its pro forma Federal Form 1120.
(11) Federal Form 1065. -- The term "Federal Form 1065" means the annual federal income tax return of a partnership made pursuant to Section 6031 of the United States Internal Revenue Code of 1986, as amended or renumbered, or in successor provisions of the laws of the United States, in respect to the taxable income of a partnership, and filed with the federal Internal Revenue Service.
(12) Fiduciary. -- The term "fiduciary" means, and includes, a guardian, trustee, executor, administrator, receiver, conservator or any person acting in any fiduciary capacity for any person.
(VI) Loans arising in factoring.
(2) Leasing or acting as an agent, broker or advisor in connection with leasing real and personal property that is the economic equivalent of an extension of credit (as defined by the Federal Reserve Board in 12 C.F.R. 225.25(b)(5)).
(3) Operating a credit card business.
(4) Rendering estate or trust services.
(5) Receiving, maintaining or otherwise handling deposits.
(6) Engaging in any other activity with an economic effect comparable to those activities described in item (1), (2), (3), (4) or (5) of this subparagraph.
(14) Fiscal year. -- The term "fiscal year" means an accounting period of twelve months ending on any day other than the last day of December, and on the basis of which the taxpayer is required to report for federal income tax purposes.
(15) Includes and including. -- The terms "includes" and "including" when used in a definition contained in this article shall not be deemed to exclude other things otherwise within the meaning of the term being defined.
(16) Parent and subsidiary corporations. -- A corporation which owns on average during the taxable year more than fifty percent of the stock of all classes of another corporation is defined to be the "parent corporation" and the corporation which is so owned by the parent is defined to be a "subsidiary corporation".
(17) 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 or an unincorporated organization which under Section 761 of the Internal Revenue Code of 1986, as amended, and is not treated as a partnership for the taxable year for federal income tax purposes. The term "partner" includes a member in such a syndicate, group, pool, joint venture or other unincorporated organization which is a partnership.
(18) Person. -- The term "person" includes any corporation or partnership.
(19) Pro forma return. -- The term "pro forma return" when used in this article means the return which the taxpayer would have filed with the Internal Revenue Service had it not elected to file federally as part of a consolidated group.
(20) Sales. -- The term "sales" means all gross receipts of the taxpayer that are "business income", as defined in this section.
(21) State. -- The term "state" means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States, and any foreign country or political subdivision thereof.
(22) Stock. -- The term "stock" includes shares in a corporation, association or joint-stock company. It shall not include nonvoting stock which is limited and preferred as to dividends, or treasury stock. "Stock owned by a corporation" shall include stock owned directly by such corporation and stock which is subject to an option to acquire stock.
(23) Taxable year. -- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which tax liability is computed under this article. "Taxable year" means, in case of a return made for a fractional part of a year (short taxable year) under the provisions of this article, or under regulations promulgated by the Tax Commissioner, the period for which such return is made.
(B) Would be subject to a net income tax if such other state imposed such a tax.
(25) Taxpayer. -- The term "taxpayer" means any person (as defined in this section) subject to the tax imposed by this article.
(26) This code. -- The term "this code" means the Code of West Virginia, 1931, as amended.
(27) This state. -- The term "this state" means the State of West Virginia.
(28) Treasury stock. -- The term "treasury stock" means shares of a corporation which have been issued and have been subsequently acquired by and belong to such corporation, and have not been canceled or restored to the status of authorized but unissued shares. Treasury stock is deemed to be issued shares, but not outstanding shares.
(a) Any term used in this article shall have the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required by the context or by definition of this article. Any reference in this article to the laws of the United States, or to the Internal Revenue Code, or to the federal income tax law shall mean the provisions of the laws of the United States as related to the determination of income for federal income tax purposes. All amendments made to the laws of the United States prior to January 1, 1993, shall be given effect in determining the taxes imposed by this article for the tax period beginning January 1, 1992, and thereafter, but no amendment to laws of the United States made on or after January 1, 1993, shall be given effect.
(b) Effective date. -- The amendments to this section reenacted in the year 1993 shall be retroactive and shall apply to taxable years beginning on or after January 1, 1992, to the extent allowable under federal income tax law. With respect to taxable years that began prior to January 1, 1992, the law in effect for each of those years shall be fully preserved as to each such year.
The tax base of a taxpayer, for purposes of this article, shall be its capital, as defined and adjusted in section three of this article. If the taxpayer is also taxable in another state, then the tax base of the taxpayer shall be its capital, as defined in section three of this article, multiplied by its apportionment factor determined under section five of this article.
(a) A taxpayer subject to the tax imposed by this article and also taxable in another state shall, for the purposes of this tax, apportion its tax base to this state by multiplying its tax base by a fraction, the numerator of which is the sum of the property factor, plus the payroll factor, plus two times the sales factor, all of which shall be determined as hereinafter provided in this section, and the denominator of which is four, reduced by the number of factors, if any, having no denominator, with the sales factor counting as two factors.
(b) Property factor. -- The property factor is a fraction, the numerator of which is the average value of the taxpayer's real and tangible personal property owned or rented and used by it in this state during the taxable year, and the denominator of which is the average value of all real and tangible personal property owned or rented by the taxpayer and used by it during the taxable year, which is reported on Schedule L of Federal Form 1120 (or 1065 for partnerships), plus the average value of all real and tangible personal property leased and used by the taxpayer during the taxable year.
(1) Any amount payable for the use of real or tangible personal property, or any part thereof, whether designated as a fixed sum of money or as a percentage of sales, profits or otherwise.
(2) Any amount payable as additional rent or in lieu of rents, such as interest, taxes, insurance, repairs or any other items which are required to be paid by the terms of the lease or other arrangement, not including amounts paid as service charges, such as utilities, janitor services, etc. If a payment includes rent and other charges unsegregated, the amount of rent shall be determined by consideration of the relative values of the rent and the other items.
(d) Movable property. -- The value of movable tangible personal property used both within and without this state shall be included in the numerator to the extent of its utilization in this state. The extent of such utilization shall be determined by multiplying the original cost of such property by a fraction, the numerator of which is the number of days of physical location of the property in this state during the taxable period, and the denominator of which is the number of days of physical location of the property everywhere during the taxable year. The number of days of physical location of the property may be determined on a statistical basis or by such other reasonable method acceptable to the Tax Commissioner.
(e) Leasehold improvements. -- Leasehold improvements shall, for the purposes of the property factor, be treated as property owned by the lessee regardless of whether the lessee is entitled to remove the improvements or the improvements revert to the lessor upon expiration of the lease. Leasehold improvements shall be included in the property factor at their original cost.
(f) Average value of property. -- The average value of property shall be determined by averaging the values at the beginning and ending of the taxable year: Provided, That the Tax Commissioner may require the averaging of monthly values during the taxable year if substantial fluctuations in the values of the property exist during the taxable year, or where property is acquired after the beginning of the taxable year, or is disposed of, or whose rental contract ceases, before the end of the taxable year.
(g) Payroll factor. -- The payroll factor is a fraction, the numerator of which is the total compensation paid in this state during the taxable year by the taxpayer, and the denominator of which is the total compensation paid by the taxpayer during the taxable year as shown on the taxpayer's federal income tax return as filed with the Internal Revenue Service, as reflected in the schedule of wages and salaries and that portion of cost of goods sold which reflects compensation, or as shown on a pro forma return.
(h) Compensation. -- The term "compensation" means wages, salaries, commissions and any other form of remuneration paid to employees for personal services. Payments made to an independent contractor or to any other person not properly classifiable as an employee shall be excluded. Only the amounts paid directly to employees shall be included in the payroll factor. Amounts considered paid directly to employees include the value of board, rent, housing, lodging and other benefits or services furnished to employees by the taxpayer in return for personal services, provided such amounts constitute income to the recipient for federal income tax purposes.
(2) Any individual who, under the usual common-law rules applicable in determining the employer-employee relationship, has the status of an employee.
(B) The base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the employee's residence is in this state.
The term "base of operations" is the place of more or less permanent nature from which the employee starts his work and to which he customarily returns in order to receive instructions from the taxpayer or communications from his customers or other persons or to replenish stock or other materials, repair equipment, or perform any other functions necessary to the exercise of his trade or profession at some other point or points. The term "place from which the service is directed or controlled" refers to the place from which the power to direct or control is exercised by the taxpayer.
(k) Sales factor. -- The sales factor is a fraction, the numerator of which is the gross receipts of the taxpayer derived from transactions and activity in the regular course of its trade or business in this state during the taxable year (business income), less returns and allowances. The denominator of the fraction shall be the total gross receipts derived by the taxpayer from transactions and activity in the regular course of its trade or business during the taxable year (business income), and reflected in its gross income reported and as appearing on the taxpayer's Federal Form 1120 or 1065, and consisting of those certain pertinent portions of the (gross income) elements set forth: Provided, That if either the numerator or the denominator includes interest or dividends from obligations of the United States government which are exempt from taxation by this state, the amount of such interest and dividends, if any, shall be subtracted from the numerator or denominator in which it is included.
(ii) The property is shipped from an office, store, warehouse, factory or other place of storage in this state and the purchaser is the United States government.
(2) All other sales of tangible personal property delivered or shipped to a purchaser within a state in which the taxpayer is not taxed as defined in subsection (b), section seven, article twenty-four of this chapter shall be excluded from the denominator of the sales factor.
(3) The sale constitutes business income to the taxpayer, or the taxpayer is a financial organization not having its commercial domicile in this state, and in either case the sale is a receipt described as attributable to this state in section five-a of this article.
(4) The sale, licensing or other use of intangible personal property. The mere holding of intangible personal property is not, in itself, an income-producing activity: Provided, That the conduct of the business of a financial organization shall constitute an income-producing activity.
(o) Cost of performance. -- The term "cost of performance" means direct costs determined in a manner consistent with generally accepted accounting principles and in accordance with accepted conditions or practices in the trade or business of the taxpayer.
(D) The employment of any other method to effectuate an equitable allocation or apportionment of the taxpayer's tax base. Such petition shall be filed no later than the due date of the annual return for the taxable year for which the alternative method is requested, determined without regard to any extension of time for filing such return, and the petition shall include a statement of the petitioner's objections and of such alternative method of allocation or apportionment as it believes to be proper under the circumstances with such detail and proof as the Tax Commissioner may require.
(B) If the taxpayer seeks employment of one of such other methods, be on the taxpayer.
(3) Notwithstanding any other provisions of this section, financial organizations shall use only the special apportionment rules set forth in section five-a of this article.
(q) Effective date. -- The amendments to this section made by this article shall apply to all taxable years ending after the effective date of this article. The provisions of paragraph (3), subsection (p) of this section shall apply to all taxable years beginning on or after January 1, 1991.
(a) General. -- The Legislature hereby finds that the general formula set forth in section five of this article for apportioning the tax base of corporations and partnerships taxable in this state as well as in another state is inappropriate for use by financial organizations due to the particular characteristics of those organizations and the manner in which their business is conducted. Accordingly, the general formula set forth in section five of this article may not be used to apportion the tax base of financial organizations which shall use only the apportionment formula and methods set forth in this section.
(b) West Virginia financial organizations taxable in another state. -- A financial organization that has its commercial domicile in this state and which is taxable in another state may not apportion its tax base as provided in section five of this article, but shall apportion its tax base to this state by multiplying it by the special gross receipts factor calculated as provided in subsection (f) of this section. The product of this multiplication is the portion of its tax base that is attributable to business activity in this state.
(c) Out-of-state financial organizations with business activities in this state. -- A financial organization that does not have its commercial domicile in this state and which regularly engages in business in this state shall apportion its tax base to this state by multiplying it by the special gross receipts factor calculated as provided in subsection (f) of this section. The product of this multiplication is the portion of its tax base that is attributable to business activity in this state.
(5) Any amounts held in an escrow or trust account with respect to property described above.
(1) "Commercial domicile" means the same as that term is defined in section three of this article.
(E) Money or its equivalent held as a credit balance by a financial organization on behalf of its customer if the entity is engaged in soliciting and holding balances in the regular course of its business.
(3) "Financial organization" means a financial organization as defined in subdivision (13), subsection (b), section three of this article, as well as a partnership which derives more than fifty percent of its gross business income from one or more of the activities enumerated in subparagraphs (1) through (6), inclusive, paragraph (C) of said subdivision.
(4) "Sales" means: For purposes of apportionment under this section, the gross receipts of a financial organization included in the gross receipts factor described in subsection (f) of this section, regardless of their source.
(J) All other receipts not attributed by this rule to a state in which the taxpayer is taxable shall be attributed pursuant to the laws of the state of the taxpayer's commercial domicile.
(2) Denominator. -– The denominator of the gross receipts factor shall include all of the taxpayer's gross receipts from transactions of the kind included in the numerator, but without regard to their source or situs.
(g) Limited tax credit for certain financial organizations for certain periods. -- A credit shall be allowed against the tax imposed by this article on a financial organization with its commercial domicile in this state that acquires a financial organization that does not have its commercial domicile in this state: Provided, That the goodwill associated with the acquisition is first added to the net equity of the financial organization with its commercial domicile in this state on or after January 1, 2008: Provided, however, That the prior recordation of the goodwill associated with the acquisition on the balance sheet of a financial organization that does not have its commercial domicile in this state shall not affect, limit or reduce the availability of the credit authorized by this subsection. The credit shall equal fifty percent of the goodwill associated with the acquisition in the amount first recorded on the balance sheet of the financial organization with its commercial domicile in this state, multiplied by the tax rate applicable to the financial organization under this article for the taxable year. For purposes of this subsection, the term "goodwill" shall have the meaning set forth in the capital adequacy guidelines for bank holding companies established by the Federal Reserve Board in 12 C.F.R. 225, Appendix A, as the same may be revised from time to time.
(h) Effective date. -- The provisions of this section enacted in chapter one hundred sixty-seven, Acts of the Legislature, 1991, shall apply to all taxable years beginning on or after January 1, 1991. The amendments to this section, enacted in the year one 1996, shall apply to taxable years beginning after December 31, 1995. The amendments to this section, enacted in the year 2008, shall apply to taxable years beginning after December 31, 2008: Provided, That the amendments to subsection (g) of this section, enacted in the year 2008, shall apply to taxable years beginning after December 31, 2007.
Acts, 2008 Reg. Sess., Ch. 215.
(a) General. -- An annual business franchise tax is hereby imposed on the privilege of doing business in this state and in respect of the benefits and protection conferred. Such tax shall be collected from every domestic corporation, every corporation having its commercial domicile in this state, every foreign or domestic corporation owning or leasing real or tangible personal property located in this state or doing business in this state and from every partnership owning or leasing real or tangible personal property located in this state or doing business in this state effective on and after July 1, 1987.
(1) On and after July 1, 1987, the amount of tax shall be the greater of $50 or fifty-five one hundredths of one percent of the value of the tax base, as determined under this article: Provided, That when the taxpayer's first taxable year under this article is a short taxable year, the taxpayer's liability shall be prorated based upon the ratio which the number of months in which such short taxable year bears to twelve: Provided, however, That this subdivision shall not apply to taxable years beginning on or after January 1, 1989.
(2) Taxable years after December 31, 1988. -- For taxable years beginning on or after January 1, 1989, the amount of tax due under this article shall be the greater of $50 or seventy-five one hundredths of one percent of the value of the tax base as determined under this article.
(3) Taxable years after June 30, 1997. -- For taxable years beginning on or after July 1, 1997, the amount of tax due under this article shall be the greater of $50 or seventy hundredths of one percent of the value of the tax base as determined under this article.
(4) Taxable years after December 31, 2006. -- For taxable years beginning on or after January 1, 2007, the amount of tax due under this article shall be the greater of $50 or fifty-five one hundredths of one percent of the value of the tax base as determined under this article.
(5) Taxable years after December 31, 2008. -- For taxable years beginning on or after January 1, 2009, the amount of tax due under this article shall be the greater of $50 or forty-eight one hundredths of one percent of the value of the tax base as determined under this article.
(6) Taxable years after December 31, 2009. -- For taxable years beginning on or after January 1, 2010, the amount of tax due under this article shall be the greater of $50 or forty-one one hundredths of one percent of the value of the tax base as determined under this article.
(7) Taxable years after December 31, 2010. -- For taxable years beginning on or after January 1, 2011, the amount of tax due under this article shall be the greater of $50 or thirty-four one hundredths of one percent of the value of the tax base as determined under this article.
(8) Taxable years after December 31, 2011. -- For taxable years beginning on or after January 1, 2012, the amount of tax due under this article shall be the greater of $50 or twenty-seven one hundredths of one percent of the value of the tax base as determined under this article.
(9) Taxable years after December 31, 2012. -- For taxable years beginning on or after January 1, 2013, the amount of tax due under this article shall be the greater of $50 or twenty one hundredths of one percent of the value of the tax base as determined under this article.
(10) Taxable years after December 31, 2013. -- For taxable years beginning on or after January 1, 2014, the amount of tax due under this article shall be the greater of $50 or ten one hundredths of one percent of the value of the tax base as determined under this article.
(11) Taxable years after December 31, 2014. -- For taxable years beginning on or after January 1, 2015, there shall be no tax due under the provisions of this article.
(c) Short taxable years. -- When the taxpayer's taxable year for federal income tax purposes is a short taxable year, the tax determined by application of the tax rate to the taxpayer's tax base shall be prorated based upon the ratio which the number of months in such short taxable year bears to twelve: Provided, That when the taxpayer's first taxable year under this article is less than twelve months, the taxpayer's liability shall be prorated based upon the ratio which the number of months the taxpayer was doing business in this state bears to twelve, but in no event shall the tax due be less than $50.
(k) For tax years beginning after December 31, 2002, any person or other organization engaged in the activity of providing venture capital to West Virginia businesses: Provided, That if the person or organization is not exclusively engaged in that activity, only that portion of its tax base under this article that is attributable to the providing of venture capital to West Virginia businesses is exempt from tax under this article and its tax liability under this article is determined by multiplying its precredit tax liability by a fraction equal to one minus a fraction, the numerator of which is its gross receipts attributable to its venture capital activities in this state and the denominator of which is its total gross receipts from all of its business activities in this state. For purposes of this exemption, a "person or organization engaged in the activity of providing venture capital to West Virginia business" means a certified West Virginia capital company as defined in section four, article one, chapter five-e of this code.
(a) General rule. -- For purposes of the tax imposed by this article, a taxpayer's taxable year shall be the same as the taxpayer's taxable year for federal income tax purposes.
(b) Change of taxable year. -- If a taxpayer's taxable year is changed for federal income tax purposes, the taxpayer's taxable year for purposes of this article shall be similarly changed. The taxpayer shall provide a copy of the authorization for such change from the Internal Revenue Service, with its return for the taxable year filed under this article.
(1) Same as federal. -- A taxpayer's method of accounting under this article shall be the same as the taxpayer's method of accounting for federal income tax purposes. In the absence of any method of accounting for federal income tax purposes, the accrual method of accounting shall be used unless the Tax Commissioner, in writing, consents to use of another method.
(2) Change of accounting methods. -- If a taxpayer's method of accounting is changed for federal income tax purposes, his method of accounting for purposes of this article shall similarly be changed. The taxpayer shall provide a copy of the authorization for such change from the Internal Revenue Service, with its return for the taxable year filed under this article.
(2) The fifteenth day of the fourth month of the next succeeding taxable year if the corporation is a partnership.
The annual return shall include such information as the Tax Commissioner may require for determining the amount of taxes due under this article for the taxable year.
(b) Special rule for tax exempt organizations with unrelated business taxable income. -- Notwithstanding the provisions of subsection (a) of this section, when a business franchise tax return is required from an organization generally exempt from tax under subsection (b), section seven of this article, which has unrelated business taxable income, the annual return shall be filed on or before the fifteenth day of the fifth month following the close of the taxable year.
(c) Effective date. -- The amendments to this section, made in the year one thousand nine hundred ninety-six, shall apply to tax returns that become due for taxable years beginning on or after the first day of that year.
(a) Privilege to file consolidated return. -- An affiliated group of corporations (as defined for purposes of filing a consolidated federal income tax return) shall, subject to the provisions of this section and in accordance with any regulations prescribed by the Tax Commissioner, have the privilege of filing a consolidated return with respect to the tax imposed by this article for the taxable year in lieu of filing separate returns. The making of a consolidated return shall be upon the condition that all corporations which at any time during the taxable year have been members of the affiliated group are included in such return and consent to the filing of such return. The filing of a consolidated return shall be considered as such consent. When a corporation is a member of an affiliated group for a fractional part of the year, the consolidated return shall include the tax base of such corporation for that part of the year during which it is a member of the affiliated group.
(b) Election binding. -- If an affiliated group of corporations elects to file a consolidated return under this article, such election once made shall not be revoked for any subsequent taxable year without the written approval of the Tax Commissioner consenting to the revocation.
(5) The filing of a consolidated return does not distort the taxable capital of the affiliated group. In any proceeding, the burden of proof that the taxpayer's method of filing does not distort taxable capital under this article shall be upon the taxpayer.
(d) Combined return. -- A combined return may be filed under this article by a unitary group, including a unitary group that includes one or more financial organizations, only pursuant to the prior written approval of the Tax Commissioner. A request for permission to file a combined return must be filed on or before the statutory due date of the return, determined without inclusion of any extension of time to file the return. Permission to file a combined return may be granted by the Tax Commissioner only when taxpayer submits evidence that conclusively establishes that failure to allow the filing of a combined return will result in an unconstitutional distortion of the measure of tax under this article. When permission to file a combined return is granted, combined filing will be allowed for the year(s) stated in the Tax Commissioner's letter. The combined return must be filed in accordance with regulations of the Tax Commissioner promulgated in accordance with article three, chapter twenty-nine-a of this code.
(e) Method of filing under this article deemed controlling for purposes of other business taxes articles. -- The taxpayer shall file on the same basis under article twenty-four of this chapter as such taxpayer files under this article for the taxable year.
(f) Regulations. -- The Tax Commissioner shall prescribe such regulations as he may deem necessary in order that the tax liability of any affiliated group of corporations filing a consolidated return, or of any unitary group of corporations filing a combined return, and of each corporation in an affiliated or unitary group, both during and after the period of affiliation, may be returned, determined, computed, assessed, collected and adjusted, in such manner as the Tax Commissioner deems necessary to clearly reflect tax liability under this article and the factors necessary for the determination of such liability, and in order to prevent avoidance of such tax liability.
(g) Computation and payment of tax. -- In any case in which a consolidated or combined return is filed, or required to be filed, the tax due under this article from the affiliated or unitary group shall be determined, computed, assessed, collected and adjusted in accordance with regulations prescribed by the Tax Commissioner, in effect on the last day prescribed by section nine of this article for the filing of such return, and such affiliated or unitary group, as the case may be, shall be treated as the taxpayer. However, when any member of an affiliated or unitary group that files a consolidated or combined return under this article is allowed to claim credit against its tax liability under this article for payment of any other tax, the amount of credit allowed may not exceed that member's proportionate share of the affiliated or unitary group's precredit tax liability under this article, as shown on its pro forma return.
(h) Consolidated or combined return may be required. -- If any affiliated group of corporations has not elected to file a consolidated return, or if any unitary group of corporations has not applied for permission to file a combined return, the Tax Commissioner may require such corporations to make a consolidated or combined return, as the case may be, in order to clearly reflect taxable capital of such corporations.
(i) Effective date. -- This section shall apply to taxable years beginning on or after January 1, 1996, except that financial organizations that are part of an affiliated group may elect, after the effective date of this act, to file a consolidated return prepared in accordance with the provisions of this section and subject to applicable statutes of limitation, for taxable years beginning on or after January 1, 1991, but before January 1, 1996, notwithstanding provisions then in effect prohibiting out-of-state financial organizations from filing consolidated returns for those years: Provided, That when the statute of limitations on filing an amended return for any of those years expires before July 1, 1996, the consolidated return for such year, if filed, must be filed by said July 1.
The Tax Commissioner may grant a reasonable extension of time for filing any returns or other document required by this article upon such terms as he may by regulations prescribe. An extension of time for filing Federal Form 1120, Federal Form 990T or Federal Form 1065 shall automatically extend the time for filing any return or other document required by this article for the same period as the extension for filing such federal form. An extension of time for filing a return shall not extend the time for payment of the tax.
(a) In general. -- The person required to make the annual return required by this article shall, without assessment or notice and demand from the Tax Commissioner, pay such tax at the time and place fixed for filing the return (determined without regard to any extension of time for filing the return).
(b) Date fixed for payment of tax. -- The date fixed for payment of the taxes imposed by this article shall be deemed to be a reference to the last day fixed for such payment (determined without regard to any extension of time for paying the tax).
(a) Amount determined on return. -- The Tax Commissioner may extend the time for payment of the amount of the tax shown, or required to be shown, on any return required by this article (or any periodic installment payments), for a reasonable period not to exceed six months from the date fixed for payment thereof.
(b) Amount determined as deficiency. -- Under regulations prescribed by the Tax Commissioner, he may extend the time for the payment of the amount determined as a deficiency of the taxes imposed by this article for a period not to exceed eighteen months from the date fixed for payment of the deficiency. In exceptional cases, a further period of time not to exceed twelve months may be granted. An extension under this subsection (b) may be granted only where it is shown to the satisfaction of the Tax Commissioner that payment of a deficiency upon the date fixed for the payment thereof will result in undue hardship to the taxpayer.
(c) No extension for certain deficiencies. -- No extension shall be granted under this section for any deficiency if the deficiency is due to negligence, to intentional disregard of rules and regulations, or to fraud with intent to evade tax.
(a) Requirement of declaration. -- Every taxpayer subject to tax under this article shall file a declaration of estimated tax for the taxable year if the taxpayer's liability for tax under this article can reasonably be expected to exceed $12,000 for the taxable year. A taxpayer not required by this section to file a declaration and pay estimated tax may elect to so file and pay.
(b) Definition of estimated tax. -- The term "estimated tax" means the amount which a taxpayer estimates to be his liability under this article for the taxable year.
(c) Contents of declaration. -- The declaration shall contain such information as the Tax Commissioner may, by rules or regulations, require, including, but not limited to, such detailed information as may be necessary to estimate the taxpayer's liability under section six of this article.
(d) Time for filing declaration. -- A declaration of estimated tax shall be filed on or before the fifteenth day of the fourth month of the taxable year, for any taxable year beginning after June 30, 1987.
(e) Amendment of declaration. -- A taxpayer may amend his declaration at any time during the taxable year in accordance with regulations prescribed by the Tax Commissioner. If any amendment of a declaration is filed by a taxpayer, the remaining installments, if any, shall be rateably increased or decreased (as the case may be) to reflect any increase or decrease in the estimated tax by reason of such amendment. If any amendment is made after the fifteenth day of the ninth month of the taxable year, any increase in the estimated tax by reason thereof shall be paid at the time of making such amendment.
(f) Payment of estimated tax. -- The estimated tax shall be paid in four equal installments. At the time the declaration of estimated payment is filed, the taxpayer shall pay one fourth of the estimated tax liability for the taxable year. The second, third and fourth installments shall be paid on the following fifteenth day of the sixth, ninth and twelfth months of the taxable year, respectively.
(g) Application to short taxable year. -- This section shall apply to a taxable year of less than twelve months in accordance with regulations of the Tax Commissioner.
(h) Installment paid in advance. -- Any taxpayer may elect to pay any installment of its estimated tax prior to the date prescribed for its payment.
(a) General. -- The Tax Commissioner may prescribe regulations as to the keeping of records, the content and form of returns and statements, and the filing of copies of federal income tax returns and determinations. The Tax Commissioner may require any person, by regulation or notice served upon such person, to make such returns, render such statements, or keep such records, as the Tax Commissioner may deem sufficient to show whether or not such person is liable for tax under this article.
(C) A signed statement explaining the relationship and differences, if any, between the income statement and the balance sheet reported for federal consolidated filing purposes and the income statement and the balance sheet reported to this state under the tax imposed by this article.
(c) Notice of qualifications as receiver, etc.
Every receiver, trustee in bankruptcy, assignee for benefit of creditors, or other like fiduciary shall give notice of his qualification as such to the Tax Commissioner, as may be required by regulation.
(a) General. -- Any return, statement or other document required to be made under the provisions of this article shall be signed in accordance with instructions or regulations prescribed by the Tax Commissioner.
(b) Signing of corporation returns. -- The return of a corporation shall be signed by the president, vice president, treasurer, assistant treasurer, chief accounting officer or any other officer duly authorized so to act. In the case of a return made for a corporation by a fiduciary, such fiduciary shall sign the return. The fact that an individual's name is signed on the return shall be prima facie evidence that such individual is authorized to sign the return on behalf of the corporation.
(d) Verification of returns. -- Except as otherwise provided by the Tax Commissioner, any return, declaration or other document required to be made under this article shall contain or be verified by a written declaration that it is made under the penalties of perjury.
Tax returns, statements or other documents, or copies thereof, required by this article or by regulations shall be filed with the Tax Commissioner by delivering it, in person or by mail, to his office in Charleston, West Virginia: Provided, That the Tax Commissioner may, by regulation, prescribe the place for filing such returns, statements or other documents, or copies thereof.
(a) A credit shall be allowed against the tax imposed by this article equal to the amount of franchise tax liability due under this article, for the taxable year (determined before application of other allowable credits) multiplied by a fraction, the numerator of which is the gross income of the business subject to tax under article thirteen-a of this chapter and the denominator of which is the total amount of gross receipts derived from or attributable to all of taxpayer's activity in West Virginia.
(b) For taxable years ending after June 30, 1998, a credit shall be allowed against the tax imposed by this article equal to the amount of franchise tax liability due under this article, for the taxable year (determined before application of other allowable credits) multiplied by a fraction, the numerator of which is the gross income of the business subject to tax under article thirteen of this chapter and the denominator of which is the total amount of gross receipts derived from or attributable to all of taxpayer's activity in West Virginia: Provided, That such credit shall be prorated and only that amount attributable to months of the taxable year beginning after June 30, 1988, shall be allowed as a credit.
(c) A parent taxpayer who files a separate return under this article shall be allowed a credit against such taxpayer's liability for the tax under this article for the amount of net taxes that would have been paid without regard to the adjustment required by subparagraph (D), paragraph (2), subsection (b), section three of this article for the taxable year by a subsidiary corporation or partnership: Provided, That the amount of credit allowed shall not exceed the amount of tax that would have been paid, without regard to such adjustment, under this article by the subsidiary or partnership, multiplied by the percentage of the parent's ownership of the subsidiary corporation or partnership. In the case of corporations, this percentage shall be equal to the percentage of stock of all classes owned by the parent. In no case shall any credit allowable by this section, which is not used on an annual return, be carried forward or back, but instead the same shall be forfeited.
(d) A credit shall be allowed against the tax imposed by this article for the taxable year equal to the amount of liability of the taxpayer for the taxable year for the full amount of any tax imposed pursuant to article eight of this chapter on the capital of the business, as determined under sections fourteen and fourteen-a, article three of this chapter.
(e) Expiration of credits. -- The credits authorized in subsection (a) of this section, shall expire and not be authorized or allowed for any taxable month beginning on or after March 1, 1989. For taxable years beginning before said March 1, and ending after such date, the annual credit heretofore allowed by subsection (a) of this section shall be prorated by the number of months in the taxable year and only that portion of the credit attributable to months ending prior to said first day of March shall be allowable under this section.
(3) The tax credit for coal loading facilities.
(b) The Tax Commissioner shall prescribe such regulations as he deems necessary to carry out the purposes of this section and articles thirteen-c, thirteen-d and thirteen-e of this chapter.
(c) This provision shall take effect on July 1, 1987.
Except where otherwise provided, no tax credit earned by one member of the combined group, but not fully used by or allowed to that member, may be used, in whole or in part, by another member of the group or applied, in whole or in part, against the tax of another member of the combined group; and a tax credit carried over into a subsequent year as to the member that incurred it, and available as a credit to that member in a subsequent year, will be considered in the computation of the capital of that member in the subsequent year regardless of the composition of that capital as apportioned, allocated or wholly within this state: Provided, That unused and unexpired economic development tax credits that were earned during a tax year in which the taxpayer filed a consolidated return under this article may, if otherwise allowed within the statutory limitations applicable to the tax credit, be used, in whole or in part, or applied, in whole or in part, against the taxes imposed by this article on any member of the taxpayer's combined group to the extent the credits would have been allowed had the taxpayer continued to file a consolidated return. For purposes of this section the term economic development tax credit means and is limited to a tax credit asserted on a tax return under article thirteen-c, thirteen-d, thirteen-e, thirteen-f, thirteen-g, thirteen-j, thirteen-q, thirteen-r or thirteen-s of this chapter or under article one, chapter five-e of this code.
The returns, requirements and taxes set forth and imposed under this article shall be in addition to all other reports, requirements, taxes and duties set forth and imposed by this state.
(a) Every taxpayer liable for reporting or paying taxes under this article shall keep such records, receipts, invoices, and other pertinent papers in such forms as the Tax Commissioner may require.
(b) Every taxpayer shall keep such records for not less than three years after the annual return is filed under this article, unless the Tax Commissioner in writing authorizes their earlier destruction. An extension of time for making an assessment shall automatically extend the time period for keeping the records for all years subject to audit covered in the agreement.
Each and every provision of the "West Virginia Tax Crimes and Penalties Act" set forth in article nine of this chapter shall apply to the tax imposed by this article with like effect as if said act were applicable only to the tax imposed by this article and were set forth in extenso in this article.
Each and every provision of the "West Virginia Tax Procedure and Administration Act" set forth in article ten of this chapter, shall apply to the tax imposed by this article with like effect as if said act were applicable only to the tax imposed by this article and were set forth in extenso in this article.
If any provision of this article or the application thereof shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder of said article, but shall be confined in its operation to the provision thereof directly involved in the controversy in which such judgment shall have been rendered, and the applicability of such provision to other persons or circumstances shall not be affected thereby.
(a) The State Tax Commissioner shall require taxpayers subject to this article to file an information return for the tax year 1984 and tax year 1985. These returns shall be due on July 1, 1985 and on July 1, 1986, respectively, unless an extension is provided by the Tax Commissioner. These returns shall be on forms and pursuant to instructions provided by the Tax Commissioner. The informational returns shall require computations as if the tax due hereunder and applicable on and after July 1, 1987 were in force and effect, as to such taxpayer during the informational tax year: Provided, That any person failing to comply with the following requirements of this section in respect of informational returns and on the forms and pursuant to the instructions prescribed by the Tax Commissioner, shall be subject to a penalty, collectible as provided in article ten of this chapter, the amount of which shall be the greater of $1,000 or ten percent of the pro forma tax liability, as computed by the Tax Commissioner in accordance with this article and the rules and regulations pertaining thereto, which should have been shown on the informational returns of the taxpayer. The Tax Commissioner is hereby authorized to waive all or any part of such penalty for good cause shown.
(b) If the taxpayer's taxable year under this article is not the calendar year, then such taxpayer's first taxable year under this article shall be a short taxable year and shall cover the period beginning July 1, 1987, and ending with the last day of the taxpayer's then current fiscal year for federal income tax purposes.
Acts, 2002 Reg. Sess., Ch. 104.
(a) Effective for taxable years beginning July 1, 1997, notwithstanding any provisions of this code to the contrary, any person, newly and solely engaged in the production of value-added products from raw agricultural products are allowed a credit, in the amount of $1,000 for each taxable year against the tax imposed by this article, for a period of five years from the date the person becomes subject to this article. The credit is allowed only against the tax imposed on that capital which is attributable to the value-added production activity in this state.
(b) For purposes of this section, "value-added product" means the following products derived from processing a raw agricultural product, whether for human consumption or for other use. The following enterprises qualify as processing raw agricultural products into value-added products: (1) The conversion of lumber into furniture, toys, collectibles and home furnishings; (2) the conversion of fruit into wine; (3) the conversion of honey into wine; (4) the conversion of wool into fabric; (5) the conversion of raw hides into semifinished or finished leather products; (6) the conversion of milk into cheese; (7) the conversion of fruits or vegetables into a dried, canned or frozen product; (8) the conversion of feeder cattle into commonly acceptable marketable retail portions; (9) the conversion of aquatic animals into a dried, canned, cooked or frozen product; and (10) the conversion of poultry into a dried, canned, cooked or frozen product.
(c) The Tax Commissioner may propose rules for promulgation in accordance with article three, chapter twenty-nine-a as necessary to effectuate the purposes of this section.
(d) No credit is available to any taxpayer under this section after July 1, 2002: Provided, That taxpayers which have gained entitlement to the credit pursuant to the terms of this section prior to July 1, 2002, shall retain that entitlement and apply the credit in due course pursuant to the requirements and limitations of this section until the original five-year credit entitlement has been exhausted or otherwise terminated.
The tax imposed by this article shall be subject to the credit set forth in section nine-b, article fifteen of this chapter and the credit set forth in section three-b, article fifteen-a of this chapter.
The provisions of this article as amended or added by this act shall take effect on July 1, 1988, and apply to all taxable years ending after that date: Provided, That if an effective date is expressly provided in such provision, that specific effective date shall control in lieu of this general effective date provision.
(2) The portion of the tax actually paid that the financial organization would have paid if the rate of tax imposed by this article is applied to the tax base determined under the law of such other state.
(b) Any additional payments of such tax to other states, or to political subdivisions thereof, by a financial organization described in this section, and any refunds of such taxes, made or received by such financial organization with respect to the taxable year, but after the due date of the annual return required by this article for the taxable year, including any extensions, shall likewise be accounted for in the taxable year in which such additional payment is made or such refund is received by the financial organization.
(c) For tax years beginning on or after January 1, 2009, the provisions of this section are null and void and of no force or effect.
(a) Except as provided by subsection (b) of this section, for each taxable year every corporation and partnership that carries on any business activity or owns or maintains property in West Virginia for the taxable year shall file a business activity report with the Tax Commissioner. The report must be filed on or before the fifteenth day of the fourth month after the end of the corporation or partnership's taxable year. The filing of a report shall not be a factor in determining whether a corporation or partnership is subject to taxation by this state.
(4) The activities or interests in property owned in this state by the corporation or partnership consist solely of activities or property expressly exempted from taxation by West Virginia or federal statute or regulation.
(D) Provides adequate security, including a bond, in an amount sufficient to cover all tax liabilities, including additions to tax, penalties and interest.
(4) Any activity of a financial organization described in item (i), (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix) or (x) of paragraph (B), subdivision (4), subsection (b), section five-a of this article.


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Kharchenko V., Kovalenko A., Andrashov A. Standards and Standardization: Concepts, Methodologies, Tools, and Applications.(Volume 3. Chapter 61. Security of Safety Important I&C Systems.) Information Resources Management Association (USA). – Hershey, Pennsylvania, United States of America. IGI Global, 2015. 1675 p.
One of the most challenging modern problems–security assessment and assurance for safety important I&C systems – is discussed. Interrelations and hierarchical structure of I&C systems attributes, including safety and security, are considered. Review of existing regulatory documents that covers various development and operation aspects of safety important I&C systems is presented. Such a review also addresses issues related to requirements for safety important I&C systems, including security requirements, depending on their underlying technology, as well as reveals the impact of the main features, including used technologies and development approaches. Main challenging problems and requirements in the area of security assurance for complex safety important I&C systems are outlined. A possible way to analyze the security vulnerabilities of safety important I&C system is considered; it is based on process-product approach, and it requires performance of assessments for products (components of I&C system at different life cycle stages) and all the processes within the product life cycle. A possible approach to assessment and assurance of safety important I&C systems security is discussed. Such an approach takes into account possible vulnerabilities of Field Programmable Gate Arrays (FPGA) technology and appropriate points of their insertion into the life cycle. An analysis of existing techniques for assurance of safety important I&C systems security is performed.
E. Babeshko, V. Kharchenko, O. Odarushchenko, V. Sklyar. Toward automated FMEDA for complex electronic product // Proceedings of the International Conference on Information and Digital Technologies (IDT 2015). – Zilina, Slovakia. – July 7-9, 2015. – P. 22-27.
Failure Modes, Effects, and Diagnostic Analysis (FMEDA) is a popular technique for evaluation of reliability and safety of a given product. This paper discusses possible challenges in application of FMEDA and related analysis techniques to complex electronic products like FPGA-based platforms. Ways of tool support to make FMEDA automated are addressed.
V. Kharchenko et al. Resilience Assurance for Software-Based Space Systems with Online Patching: Two Cases. Dependability Engineering and Complex Systems / Seria "Advances in Intelligent Systems and Computing", Vol.470. W. Zamojski et al (edits), Springer International Publishing Switzerland, 2016. – Pp. 267-278.
Brezhniev E., Kovalenko А., Illiashenko О. Assurance of cyber security for I&C systems important to safety: process approach based on quality management system. Proceeding of 10th International Conference “DEpendable Systems, SERvices and Technologies” (DESSERT 2016). – Kiev, Ukraine. – May 18-23, 2016. – P. 21.
Security of any product is directly related to its development environment security, as well as assured by the product inherent properties and development processes. The approach of development of cyber-secured applications via creating and implementation of cyber security (CS) assurance process in a company is described in paper. CS assurance process is considered as an important business process in a company, the inputs are represented by company’s resources, and output is a secured product, which satisfies the customer. An example of such environment establishment is considered in the scope of special NQA QMS. NQA QMS is a complex consisting of methods and tools intended for controlling the main processes, which have an impact on security of the final product (application).
Babeshko E., Yasko A., Kharchenko V. FMEDA-based NPP I&C Systems Safety Assessment: Toward To Minimization Of Experts' Decisions Uncertainty. Proceedings of the 2016 24th International Conference on Nuclear Engineering (ICONE24), Volume 5, June 26-30, 2016, Charlotte, North Carolina, USA, Paper ID: ICONE24-60377.
Instrumentation and Control (I&C) systems for Nuclear Power Plants (NPP) are exceedingly complicated electronic solutions that include thousands of different components such as microcontrollers, Field-Programmable Gate Arrays (FPGAs), integrated circuits etc. Deployment of such safety-critical systems cannot be performed without complex safety and reliability assessment, verification and validation (V&V) activities that are addressed to exposing of overlooked faults. The examples of such activities are Fault Tree Analysis (FTA), Failure Modes and Effects Analysis (FMEA), Fault Injection Testing (FIT). Due to complexity of NPP I&C systems in most cases the process of assessment is very time consuming and the results mostly depend on experts’ qualification. Traditional safety and reliability assessment methods are being constantly modified and enhanced so as to comply with increasing demands of national and international standards and guidance, as well as to be applied for I&C systems that contain number of complex components like FPGA. Although much work related to analysis of FPGA-based systems has been performed, there is a lack of detailed technique for FPGA-based I&C systems failure identification that considers probability of several faults at the same time (multi-faults), development of preventive strategies for controlling or reducing of the risk related to such failures, as well as automation of this technique so as to make it utilizable for real NPP industry tasks. FIT as verification for FMEDA was used during SIL3 certification process of RadICS NPP I&C platform, while the parts of proposed technique were used as internal verification and validation activities applied on several modules of the platform.
Reliability assessment of instrumentation and control systems (I&Cs) is always one of the most important design and operation activities, especially for critical domains like nuclear power plants (NPPs). Intensive use of relatively new technologies like field programmable gate arrays (FPGAs) in I&C which appear in upgrades and in newly built NPPs makes task to develop and validate advanced reliability assessment methods that consider specific technology features very topical. Increased integration densities make the reliability of integrated circuits the most crucial point in modern NPP I&C. Moreover, FPGAs differ in some significant ways from other integrated circuits: they are shipped as blanks and are very dependent on design configured into them. Therefore, special approaches should be used for comprehensive analysis of FPGAs. This paper summarizes our experience on reliability analysis of FPGA based NPP I&C produced by Research and production corporation Radiy (RPC Radiy). Both analytical and operational reliability analyses are covered.
Vyacheslav Kharchenko, Vladimir Sklyar, Eugene Brezhnev, Artem Boyarchuk, Oleksii Starov, Chris Phillips. University-Industry Cooperation in Cyber Security Domain: Multi-Model Approach, Tools and Cases // Proceedings of the International Conference on University Industry Interaction (UII 2016). – Amsterdam, Netherland. – June 2-4, 2016. – P. 22-27.
The role of information (cyber) security is increasing in all public and an industrial domain enforces Research and Development (R&D) in this area. It becomes an important area in University-Industry Cooperation (UIC). The paper is targeted to learn lessons and study special features of UIC provided for cyber security domain. The actual research is based on experience learned mainly from activities in the EU projects, in particular, TEMPUS SEREIN (Modernization of Postgraduate Studies on Security and Resilience for Human and Industry Related Domains, 543968-TEMPUS-1-2013-1-EE-TEMPUS-JPCP), http://serein.net.ua).
A paper is organized as a case study collection. Firstly, we analyze opportunities to organize hackathons for cyber security features development. Two different kinds of hackathons have been organized with SEREIN Project participants. The first kind is a student hackathon targeted to learning cyber security features of embedded systems based on microcontrollers and Field Programmable Gates Arrays (FPGAs). The second type of hackathon has been organized at the site of Research & Production Company Radiy with support of academicians. The goal of this industrial hackathon is to provide a valuable solution to increase cyber defense of FPGA-based safety controller RadICS.
The next type of activity is establishment of student start-ups to provide consultancy service for industrial clients. The third type of activity is joint R&D targeted to design of special programmable tool for investigation of cyber security features of Programmable Logic Controllers. This Security Controller is designed with two parts architecture. The first part is an Arduino family board which serves as a motherboard with performing functions of electrical parameters measurement as well as data transmission via USB-interface to a Personal Computer (PC). The second part is the specially designed Security Controller board with a target device (microcontroller unit or FPGA). This device is used as a connected shield for Arduino. A programmable component is programmed with a target code and its electrical parameters can be measured by Arduino.
Some tuning of traditional UIC tools and method for cyber security domain can be done based on the above experience.
Kharchenko V. Diversity for Safety and Security of Embedded and Cyber Physical Systems: Fundamentals Review and Industrial Cases. In Proceeding of 15Tth Biennial Baltic Electronics Conference (BEC 2016). Tallinn, Estonia. – 9 p.
Fundamentals of diversity and multi-version systems (MVS) are overviewed. Main concepts and taxonomy of multi-version computing, methods of diversity assessment and technologies of development are analyzed. Principle D3 (Defense-in-Depth&Diversity) is researched using FTA (failure tree analysis) to understand its influence on safety and security considering physical, design faults and attacks on vulnerabilities of hardware, software, FPGA components and system configuration. Several industrial cases related to application of diversity in NPP I&Cs, aviation control systems, post-accident monitoring system and service-oriented architectures to improve safety and security are analyzed.
Kharchenko, V., Sachenko, A., Kochan, V., & Fesenko, H. (2016). Reliability and survivability models of integrated drone-based systems for post emergency monitoring of NPPs. In Proceeding of The International Conference on Information and Digital Technologies 2016 (IDT 2016). Rzeszov, Poland. – 10p.
This paper presents the approach to research integrated drone-based systems for post emergency monitoring of NPPs as systems with a multi-level degradation. Reliability block diagrams of the systems are built. Degradation levels, conditions which determine them and formulae for calculating the reliability functions of the systems on these levels are proposed. The possibility of using developed models for research systems with a multi-level degradation and using drones are shown.
Kharchenko, V. (2016). Critical (Cyber) Computing: Challenges and Cases for Industry and Human Domains. In Proceeding of The International Conference on Information and Digital Technologies 2016 (IDT 2016). Rzeszov, Poland. – 12p.
Challenges in area of safety and security critical systems application are discussed. Fundamentals of critical computing are observed considering development and implementation of software, FPGA and other (web, cloud, IoT) technologies for industry (nuclear power stations, aerospace, automotive systems, etc) human (health systems, smart building, etc) domains. Methods, techniques and tools to assess reliability, availability and safety of such systems are analysed. Aspects of cyber safety and cyber security are discussed as well. One of the techniques applied for safety assessment (verification and validation, V&V) of software and FPGA-based systems is (X,Z)-injection testing IT (X is type of faults and vulnerabilities, Z is component of systems). Fault injection testing (X is physical/design fault, Z is hardware/software component) is used as a tool-based technique during independent V&V in safety important NPP Instrumentation and Control systems (I&Cs). This technique is a mandatory to certify platforms and I&Cs against requirements of the standard IEC 61508 “Functional Safety of Electrical/Electronic/Programmable Electronic Safety-related Systems” according with safety integrity level (SIL). FIT is based on design fault injection into the code (VHDL code for FPGA, C code for embedded software, web components, etc), physical faults into programmable chips and HW modules to assess test coverage and fault-tolerance for redundant systems. VIT (vulnerability injection testing) is applied to assess intrusion-tolerance and (cyber) security. Experience of development and implementation of injection-based techniques for NPP I&C is discussed. The developed technique and tool have been applied to verify modules of FPGA-based platform RadICS (RPC Radiy, Kirovograd, Ukraine) during SIL3 certification. To assure safety and security diversity approach is applied. This approach is analysed in point of view regulation, assessment and assuring aspects. Industry/commercial application of multi-version systems is discussed. Diversity related requirements of standards for nuclear and automotive systems are compared. Techniques of diversity metric calculation and decision making for version redundancy selection are analysed.
Kuchuk G., Kharchenko V., Kovalenko А., Ruchkov E. Approaches to Selection of Combinatorial Algorithm for Optimization in Network Traffic Control of Safety-Critical Systems. Proceeding of IEEE East-West Design & Test Symposium (EWDTS’2016). – Yerevan, Armenia. – October 14-17, 2016. – Pp. 384-389.
Traffic control in modern computer networks, including those within critical infrastructures (e.g. Nuclear Power Plants), implies various optimization problems solving by switching/routing devices in real time. Some of such problems include, for example, choosing of optimal route, distribution of data packets during multiway routing, redistribution of both service and user data, efficient changing of virtual configuration in network segment containing a bottleneck, which, in turn, appeared due to fault or failure of some physical links.
In a majority of cases, input data in such problems have a discrete character (for example, traffic samples, statistical estimations, etc.); hence, it is inevitable to use algorithms of discrete optimization.
Combinatorial algorithms for finding the solution in discrete optimization problem, applied to switching/routing nodes of critical infrastructures’ networks, are considered. Conditions for selection of algorithm type, depending on nature of the problem, are determined. Implicit enumeration algorithms on lacing and tree, as well as algorithms of dynamic programming method are analyzed in details.
This volume provides a comprehensive state of the art overview of a series of advanced trends and concepts that have recently been proposed in the area of green information technologies engineering as well as of design and development methodologies for models and complex systems architectures and their intelligent components. The contributions included in the volume have their roots in the authors’ presentations, and vivid discussions that have followed the presentations, at a series of workshop and seminars held within the international TEMPUS-project GreenCo project in United Kingdom, Italy, Portugal, Sweden and the Ukraine, during 2013-2015 and at the 1st - 5th Workshops on Green and Safe Computing (GreenSCom) held in Russia, Slovakia and the Ukraine. The book presents a systematic exposition of research on principles, models, components and complex systems and a description of industry- and society-oriented aspects of the green IT engineering. A chapter-oriented structure has been adopted for this book following a “vertical view” of the green IT, from hardware (CPU and FPGA) and software components to complex industrial systems.

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