This bill proposes the addition of a new section, 11-24-45, to the Code of West Virginia, which establishes a tax credit against the state corporation net income tax for businesses involved in the establishment and operation of biochar manufacturing facilities. The legislation aims to align state tax policy with federal incentives under 26 U.S.C. 45Q, which provides tax credits for carbon oxide sequestration. The bill outlines definitions for key terms, eligibility criteria for taxpayers, and the specifics of the tax credit, which is set at 10% of the federal credit for carbon oxide sequestration related to biochar production. The credit can be claimed for up to 12 years following the facility's commencement of operations after July 1, 2025.

Additionally, the bill includes provisions for limitations on the credit, stating that it cannot reduce a taxpayer's liability by more than 50% of the tax due, and any unused credit can be carried forward or back under certain conditions. The Tax Commissioner is tasked with verifying eligibility based on federal certification and requires documentation from taxpayers to claim the credit. The bill also allows for the credit to be allocated among shareholders or partners of eligible entities, such as small business corporations and partnerships, while explicitly stating that it cannot be applied to employer withholding taxes. Overall, the bill seeks to promote investment in biochar manufacturing, particularly in rural and coal-impacted areas of West Virginia, by leveraging existing federal tax incentives.

Statutes affected:
Introduced Version: 11-24-45