Bill Summary – FastDemocracy

WEST VIRGINIA LEGISLATURE
REGULAR SESSION
                  Introduced House Bill 3403                           FISCAL
                                                      NOTE
 By Delegates Howell, Fehrenbacher, Martin, Young,
               Criss, Miller, and Storch [Introduced February 13, 2023; Referred to the Committee on Economic Development and Tourism then Finance]
     Intr HB                                     2023R3545
  A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section,
         designated §11-21-98; and to amend said code by adding thereto a new section,
         designated §11-24-45, all relating to providing a tax credit against the state corporate net
         income tax and the state personal income tax for expenditures related to the operation of
         existing employer-provided or sponsored childcare facilities; defining terms; providing for
         rulemaking; setting the amount of the credit; providing for limitation of the credit; providing
         for transferrable credit available to non-profit corporations; and providing for a recapture
         process.
     Be it enacted by the Legislature of West Virginia:
     ARTICLE                 21.                PERSONAL                    INCOME                   TAX.
     §11-21-98. Tax credit for employers with existing childcare facilities.
         (a) Definitions -- As used in this section, the term:
         (1) "Commissioner" or "Tax Commissioner" are used interchangeably herein and mean the
  Tax Commissioner of the State of West Virginia, or his or her delegate;
         (2) "Cost of operation" means reasonable direct operational costs incurred by an employer
  as a result of providing employer provided or employer sponsored childcare facilities: Provided,
  That the term cost of operation shall exclude the cost of any property that is qualified childcare
  property.
         (3) "Department" or "Tax Department" means the West Virginia State Tax Department.
         (4) "Employer" means any employer upon whom an income tax is imposed by this article.
        (5) "Employer provided" refers to childcare offered on the premises of the employer.
        (6) "Premises of the employer" refers to any location within the State of West Virginia and
 located on the workplace premises of the employer providing the child care or one of the
 employers providing the child care in the event that the childcare property is owned jointly or
 severally by the taxpayer and one or more unaffiliated employers: Provided, That if such
 workplace premises are impracticable or otherwise unsuitable for the on-site location of such
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     Intr SB                                       2023R3545
 childcare facility, as determined by the commissioner, such facility may be located within a
 reasonable distance of the premises of the employer.
         (7) "Qualified childcare property" means all real property, other than land, and tangible
 personal property for use exclusively in the improvement or operation of an employer provided
 childcare facility, but only if:
         (A) The children who use the facility are primarily children of employees of:
         (i) The taxpayer and other employers in the event that the childcare property is owned
 jointly or severally by the taxpayer and one or more employers; or
         (ii) A corporation that is a member of the taxpayer’s "affiliated group" within the meaning of
 section 1504(a) of the Internal Revenue Code; and
         (B) The taxpayer does not qualify for, or claim, any tax credit for the cost of operation for
 such qualified childcare property described in § 11-21-97 or § 11-24-44 of this code.
         Qualified childcare property includes, but is not limited to, amounts expended on
 improvements, furniture, fixtures, and equipment directly related to the operation of childcare
 property as defined in this section.
         (b) Credit for operating existing childcare facility. — A taxpayer who operates an existing
 childcare facility shall be allowed a credit against the tax imposed under this article. The aggregate
 amount of the credit shall equal 100 percent of the total amount expended by a taxpayer during a
 taxable year for the operation of an existing, qualified childcare facility less any amounts paid for
 by employees during a taxable year. In the case of a qualified childcare property jointly owned by
 two or more unaffiliated employers, each employer’s credit is limited to that employer’s respective
 contribution to the cost of operating the qualified childcare facility.
         (c) Limitations on Existing Childcare Facility Credit. — The tax credit allowable under
 subsection (b) of this section shall be subject to the following conditions and limitations:
         (1) Such credit shall when combined with the credit allowed under subsection (b) of this
 section shall not exceed 100 percent of the amount of the taxpayer's income tax liability for the
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     Intr SB                                      2023R3545
 taxable year as determined without regard to any other credits;
         (2) Any such credit claimed but not used in any taxable year may be carried forward for five
 years from the close of the taxable year in which the cost of operation was incurred; and
         (3) The employer shall certify to the department the names of the employees, the name of
 the childcare provider, and such other information as may be required by the department to ensure
 that credits are granted only to employers who provide or sponsor approved childcare pursuant to
 this section.
         (e) Rules. — The Tax Commissioner may promulgate such interpretive, legislative and
 procedural rules as the commissioner deems to be useful or necessary to carry out the purpose of
 this section and to implement the intent of the Legislature. The Tax Commissioner may promulgate
 emergency rules pursuant to the provisions of §29A-3-15 of this code.
     ARTICLE 24. CORPORATION NET INCOME TAX.
     §11-24-45.      Tax credit for employers with existing childcare facilities.
          (a) Definitions -- As used in this section, the term:
          (1) "Commissioner" or "Tax Commissioner" are used interchangeably herein and mean the
  Tax Commissioner of the State of West Virginia, or his or her delegate;
          (2) "Cost of operation" means reasonable direct operational costs incurred by an employer
  as a result of providing employer provided or employer sponsored childcare facilities: Provided,
  That the term cost of operation shall exclude the cost of any property that is qualified child care
  property.
          (3) "Department" or "Tax Department" means the West Virginia State Tax Department.
          (4) "Employer" means any employer upon whom an income tax is imposed by this article.
         (5) "Employer provided" refers to childcare offered on the premises of the employer.
         (6) "Premises of the employer" refers to any location within the State of West Virginia and
 located on the workplace premises of the employer providing the child care or one of the
 employers providing the childcare are in the event that the childcare property is owned jointly or
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     Intr SB                                       2023R3545
 severally by the taxpayer and one or more unaffiliated employers: Provided, That if such
 workplace premises are impracticable or otherwise unsuitable for the on-site location of such
 childcare facility, as determined by the commissioner, such facility may be located within a
 reasonable distance of the premises of the employer.
         (7) "Qualified child care property" means all real property, other than land, and tangible
 personal property for use exclusively in the improvement or operation of an employer provided
 childcare facility, but only if:
         (A) The children who use the facility are primarily children of employees of:
         (i) The taxpayer and other employers in the event that the childcare property is owned
 jointly or severally by the taxpayer and one or more employers; or
         (ii) A corporation that is a member of the taxpayer’s "affiliated group" within the meaning of
 section 1504(a) of the Internal Revenue Code; and
         (B) The taxpayer does not qualify for, or claim, any tax credit for the cost of operation for
 such qualified childcare property described in § 11-21-97 or § 11-24-44 of this code.
         Qualified childcare property includes, but is not limited to, amounts expended on
 improvements, furniture, fixtures, and equipment directly related to the operation of child care
 property as defined in this section.
         (b) Credit for operating existing childcare facility. — A taxpayer who operates an existing
 childcare facility shall be allowed a credit against the tax imposed under this article. The aggregate
 amount of the credit shall equal 100 percent of the total amount expended by a taxpayer during a
 taxable year for the operation of an existing, qualified childcare facility less any amounts paid for
 by employees during a taxable year. In the case of a qualified childcare property jointly owned by
 two or more unaffiliated employers, each employer’s credit is limited to that employer’s respective
 contribution to the cost of operating the qualified childcare facility.
         (c) Limitations on Existing Childcare Facility Credit. — The tax credit allowable under
 subsection (b) of this section shall be subject to the following conditions and limitations:
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     Intr SB                                     2023R3545
         (1) Such credit shall when combined with the credit allowed under subsection (b) of this
 section shall not exceed 100 percent of the amount of the taxpayer's income tax liability for the
 taxable year as determined without regard to any other credits;
         (2) Any such credit claimed but not used in any taxable year may be carried forward for five
 years from the close of the taxable year in which the cost of operation was incurred; and
         (3) The employer shall certify to the department the names of the employees, the name of
 the childcare provider, and such other information as may be required by the department to ensure
 that credits are granted only to employers who provide or sponsor approved childcare pursuant to
 this section.
         (d) Transferrable credit available to non-profit corporations. — In the case of nonprofit
 corporations organized under Internal Revenue Code §501(c)(3) or §501(c)(6), which are exempt
 from tax under this article pursuant to §11-24-5 of this code, a credit in the amount calculated
 under the provisions of this section shall be available as a transferrable credit that may be
 transferred, sold, or assigned to any other taxpayer to be applied against the tax owed under this
 article. Pursuant to rules promulgated by the Tax Department, a nonprofit corporation applicant
 shall provide a schedule to the Tax Department with all information required under §11-24-44(c)(3)
 of this code. The Tax Department shall within 90 days certify the amount of transferrable credit
 available to be transferred, sold, or assigned to another taxpayer. Any transferee, purchaser, or
 assignee of nonprofit corporation credits certified to a nonprofit corporation under this section
 takes the transferred, purchased, or assigned credits subject to any limitations placed on the
 amount of credit taken in a given year by §11-24-45(b) and §11-24-45(c) of this code.
         (e) Rules. — The Tax Commissioner may promulgate such interpretive, legislative and
 procedural rules as the commissioner deems to be useful or necessary to carry out the purpose of
 this section and to implement the intent of the Legislature. The Tax Commissioner may promulgate
 emergency rules pursuant to the provisions of §29A-3-15 of this code.
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Intr SB                                     2023R3545
      NOTE: The purpose of this bill is to provide a tax credit against the state corporate net income tax and the state personal income tax for expenditures related to the operation of
      existing employer-provided or sponsored childcare facilities.
      Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.
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Statutes affected: 
Introduced Version: 11-21-98, 11-24-45