This bill amends the personal income tax provisions in West Virginia, specifically targeting the alleviation of double taxation on foreign income. It introduces a credit for income tax paid to foreign countries, in addition to existing provisions for taxes paid to other states and the District of Columbia. The bill specifies that residents may claim this credit for taxes paid directly or through pass-through entities, provided they can demonstrate to the Tax Commissioner that double taxation will occur on their foreign income. Furthermore, the credit is limited to a percentage of the taxpayer's West Virginia income subject to taxation, and it cannot reduce the tax liability below what would be owed if the foreign income were excluded.

Additionally, the bill includes a sunset provision, stating that the credit for foreign income tax will be effective until July 1, 2070. It also clarifies that no credit will be allowed for taxes from jurisdictions that provide a similar credit against West Virginia taxes. The changes aim to ensure that West Virginia residents are not unfairly taxed on income earned abroad, while also establishing clear guidelines and limitations for claiming such credits.

Statutes affected:
Introduced Version: 11-21-20