Bill Text: WV HB2964 | 2018 | Regular Session | Introduced
Bill Title: Budget Stabilization Act of 2017
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-01-10 - To House Health and Human Resources [HB2964 Detail]
Download: West_Virginia-2018-HB2964-Introduced.html
FISCAL
NOTE
WEST virginia Legislature
2017 regular session
By
[
to the Committee on Health and Human Resources then Finance.
A BILL to amend the Code
of West Virginia, 1931, as amended, by adding thereto a new section, designated
§5-1A-2a; to amend and reenact §11-15-3a of said code; to amend and reenact §11-17-3
of said code; to amend said code by adding thereto a new section, designated §11-21-4g;
and to amend and reenact §11-24-4 of said code, all relating to implementing
the “Budget Stabilization Act of 2017”; placing a limited budget freeze of four
years to 2015 Governor’s budget proposal, excepting certain funding
obligations; providing a temporary food tax; providing for an increase in the
tobacco tax; providing for a temporary increase in the personal income tax
rates; providing for a temporary increase in the corporation net income tax;
and providing for a removal of certain taxes sooner upon sufficient funding to
state reserve account.
Be it enacted by the
Legislature of West Virginia:
That of the Code of
West Virginia, 1931, as amended, be amended by adding thereto a new section,
designated §5-1A-2a; that §11-15-3a of said code be amended and reenacted; that
§11-17-3 of said code be amended and reenacted; that said code be amended by
adding thereto a new section, designated §11-21-4g; and that §11-24-4 of said code
be amended and reenacted, all to read as follows:
CHAPTER 5. GENERAL
POWERS AND AUTHORITY OF THE GOVERNOR, SECRETARY OF STATE AND ATTORNEY GENERAL;
BOARDOF PUBLIC WORKS; MISCELLANEOUS AGENCIES, COMMISSIONS, OFFICES, PROGRAMS,
ETC.
ARTICLE 1A. ITEMIZATION
OF PROPOSED APPROPRIATIONS IN BUDGET BILL SUBMITTED BY GOVERNOR TO LEGISLATURE.
§5-1A-2a. Budget
Stabilization Act of 2017.
(a) Effective with the
enactment of this section during the 2017 Regular Session of the Legislature,
the Governor may not propose to the Legislature, pursuant to section two of
this article, a budget larger in total dollars expended than that was submitted
by the Governor as reflected in the introduced versions of S.B.233 and H.B.
2016 of the Regular Session of the 2015 Legislature, except to increase funding
for Public Employees Insurance Agency to fund state employee benefits, to meet
state Medicaid program requirements pursuant to Title XIX of the Social
Security Act, or to meet state employee and teacher pension fund contributions
and funding obligations of the state. The purpose of the provisions of this act
implementing temporary tax increases pursuant to section three-a, article
fifteen, chapter eleven; and section four-g, article twenty-one, chapter
eleven; and section four, article twenty-four, chapter eleven, all of this
code, is to temporary fund the state at the 2015 fiscal year budget level, by
implementing a budget freeze, tied to temporary tax increases to provide the
preservation of essential government services, while stabilizing the state
budget funding stream, and using any excess moneys to fund the state Revenue
Shortfall Accounts. This act also establishes an increase in the state tobacco
tax, as provided in section three-a, article seventeen, chapter eleven of this
code, which is a permanent tax intended to both reduce tobacco consumption and
provide enhanced revenue for the state.
(b) To the extent that
projected revenues do not allow the Governor to project spending equal to the
amount of the Governor’s proposed 2015 fiscal year budget, the Governor shall
submit a budget reduced sufficiently to reflect those budget estimates. If the
Governor projects that the revenues of the state will exceed the proposed 2015
fiscal year budget, those excess moneys shall be appropriated to the Revenue
Shortfall Fund created pursuant to section twenty, article two, chapter
eleven-b of this code.
(c) The provisions of
this section expire and are of no force or effect beginning July 1, 2021: Provided, That notwithstanding any code
provision to the contrary, the expiration of a temporary tax increase
authorized in section three-a, article fifteen, chapter eleven; and section four-g,
article twenty-one, chapter eleven; and section four, article twenty-four,
chapter eleven, all of this code, shall be suspended prior to their scheduled
expiration of July 1, 2021, if the combined balance of funds as of the end of
any fiscal year, in the Revenue Fund Shortfall Reserve Fund and the Revenue
Fund Shortfall Reserve Fund Part B established in section twenty, article two,
chapter eleven b of this code equals or exceeds twenty percent of the General
Revenue Fund budgeted for the upcoming fiscal year: Provided, however, That if the Revenue Fund Shortfall Reserve Fund and
the Revenue Fund Shortfall Reserve Fund Part B next equals or exceeds seventeen
and one-half percent but not twenty percent, of the General Revenue Fund
budgeted for the immediately succeeding fiscal year, the temporary tax
increases contained in section three-a, article fifteen, chapter eleven; and
section four-g, article twenty-one, chapter eleven; and section four, article
twenty-four, chapter eleven, all of this code, shall be reduced by one half for
the upcoming fiscal year.
CHAPTER 11. TAXATION.
ARTICLE 15. CONSUMERS
SALES AND SERVICE TAX.
§11-15-3a. Rate of tax
on food and food ingredients intended for human consumption; reductions and
cessations of tax.
(a) Rate of tax on food
and food ingredients. -- Notwithstanding any provision of this article or
article fifteen-a of this chapter to the contrary:
(1) Rate reduction. --
The rate of tax on sales, purchases and uses of food and food ingredients
intended for human consumption after June 30, 2008, shall be three percent of
its sales price, as defined in section two, article fifteen-b of this chapter.
(2) Additional rate
reduction. -- The rate of tax on sales, purchases and uses of food and food
ingredients as defined in that section that is intended for human consumption
after December 31, 2011, shall be two percent of its sales price, as defined in
that section. After June 30, 2012, the rate of tax on sales, purchases and uses
of food and food ingredients as defined in that section that is intended for
human consumption shall be one percent of its sales price, as defined in that
section.
(3) Contingent
termination of tax on food. -- The tax on sales, purchases and uses of food
and food ingredients as defined in section two, article fifteen-b of this
chapter that is intended for human consumption shall cease after June 30, 2013,
and no such tax shall be imposed on sales, purchases and uses of food and food
ingredients so defined: Provided, That the cessation of tax after June
30, 2013, authorized by this subsection shall be suspended if the balance of
funds as of December 31, 2012, in the Revenue Shortfall Reserve Fund
established in section twenty, article two, chapter eleven-b of this code does
not equal or exceed twelve and one-half percent of the General Revenue Fund
budgeted for the fiscal year commencing July 1, 2012. Such suspension shall
terminate, and the cessation of tax shall proceed, beginning on July 1 of any
calendar year beginning after December 31, 2013, in which the balance of funds
as of December 31 of the preceding fiscal year in said Revenue Shortfall
Reserve Fund equals or exceeds twelve and one-half percent of the General
Revenue Fund budgeted for the immediately succeeding fiscal year.
(b) After June 30, 2017,
the rate of tax on sales, purchases and uses of food and food ingredients
intended for human consumption, as defined in section two, article fifteen-b of
this chapter, is three percent of its sales price. The tax imposed pursuant to
this subsection expires July 1, 2021.
(b) (c) Calculation of tax on fractional parts
of a dollar. -- The tax computation under this section shall be carried to
the third decimal place and the tax rounded up to the next whole cent whenever
the third decimal place is greater than four and rounded down to the lower
whole cent whenever the third decimal place is four or less. The seller may
elect to compute the tax due on a transaction on a per item basis or on an
invoice basis provided the method used is consistently used during the
reporting period.
(c) (d) Federal Food Stamp and Women, Infants
and Children programs, other exemptions. -- Nothing in this section affects
application of the exemption from tax provided in section nine of this article
for food purchased by an eligible person using food stamps, electronic benefits
transfer cards or vouchers issued by or pursuant to authorization of the United
States Department of Agriculture to individuals participating in the Federal
Food Stamp Program, by whatever name called, or the Women, Infants and Children
(WIC) program, or application of any other exemption from tax set forth in this
article or article fifteen-a of this chapter.
ARTICLE 17. TOBACCO
PRODUCTS EXCISE TAX ACT.
§11-17-3. Levy of tax;
ratio; dedication of proceeds.
(a) Tax on cigarettes and tobacco products other
than cigarettes. — For the purpose of providing revenue for the General
Revenue Fund of the state, an excise tax is hereby levied and imposed on sales
of cigarettes and tobacco products other than cigarettes.
(b)
Tax rate on cigarettes. — Effective
May 1, 2003, the excise tax rate levied and imposed on the sale of cigarettes
is 55 cents on each twenty cigarettes or in like ratio on any part thereof: Provided, That on and after July 1,
2016, the excise tax rate levied and imposed on the sale of cigarettes is $1.20
on each twenty cigarettes or in like ratio on any part thereof: Provided, however, That on and
after July 1, 2017, the excise tax rate levied and imposed on the sale of
cigarettes is $1.55 on each twenty cigarettes or in like ratio on any part
thereof. Only one sale of the same article shall be used in computing the
amount of tax due under this subsection.
(c)
Tax on tobacco products other than cigarettes. — Effective January 1, 2002, the excise tax levied and
imposed on the sales or use of tobacco products other than cigarettes at the
rate equal to seven percent of the wholesale price of each article or item of
tobacco products other than cigarettes sold by the wholesaler or subjobber
dealer, whether or not sold at wholesale, or if not sold, then at the same rate
upon the use by the wholesaler or dealer: Provided,
That on and after July 1, 2016, the excise tax rate levied and imposed on the
sales or use of tobacco products other than cigarettes is at the rate equal to
twelve percent of the wholesale price of each article or item of tobacco
products other than cigarettes sold by the wholesaler or subjobber dealer,
whether or not sold at wholesale, or if not sold, then at the same rate upon
the use by the wholesaler or dealer. Only one sale of the same article shall be
used in computing the amount of tax due under this subsection.
(d) Effective date of amendments. — Amendments to this section enacted
in the year 2003 apply in determining tax imposed under this article from May
1, 2003, through June 30, 2016. Amendments to this section enacted in the year
2016 apply in determining tax imposed under this article effective on and after
July 1, 2016. The amendment to this section enacted in 2017 applies in
determining tax imposed under this article effective on and after July 1, 2017.
ARTICLE
21. PERSONAL INCOME TAX.
§11-21-4g. Rate of
tax -- Taxable years beginning on or after January 1, 2017.
(a) Rate of tax on individuals (except married
individuals filing separate returns), individuals filing joint returns, heads
of households, estates and trusts.
-- The tax imposed by section three of this article on the West Virginia
taxable income of every individual (except married individuals filing separate
returns); every individual who is a head of a household in the determination of
his or her federal income tax for the taxable year; every husband and wife who
file a joint return under this article; every individual who is entitled to
file his or her federal income tax return for the taxable year as a surviving
spouse; and every estate and trust shall be determined in accordance with the
following table:
If
the West Virginia
taxable income is: The
tax is:
Not over $10,000 3.5%
of the taxable income
Over $l0,000 but not $350.00
plus 4.5% of excess
over
$25,000 over
$10,000
Over $25,000 but not $1,025.00
plus 5% of excess
over
$40,000 over
$25,000
Over $40,000 but not $1,775.00
plus 6.5% of excess
over
$60,000 over
$40,000
Over $60,000 but not
$3,075.00 plus 7% of excess
Over $200,000 over
$60,000
Over $200,000
$12,875.00 plus 7.5% excess
_ over
$200,000
(b) Rate of tax on
married individuals filing separate returns. -- In the case of husband and wife
filing separate returns under this article for the taxable year, the tax
imposed by section three of this article on the West Virginia taxable income of
each spouse shall be determined in accordance with the following table:
If the West Virginia
taxable income is: The
tax is:
Not
over $5,000 3.5%
of the taxable income
Over $5,000 but not $175.00
plus 4.5% of excess
over
$l2,500 over
$5,000
Over $l2,500 but not $512.50
plus 5% of
over
$20,000 excess
over $l2,500
Over $20,000 but not $887.50
plus 6.5% of excess
over
$30,000 over
$20,000
Over $30,000 but not $1,537.50
plus 7% of
over
$100,000 excess
over $30,000
Over $100,000 $6,437.50 plus 7.5% of
_
excess over $100,000
(c) Applicability of
this section. -- The provisions of this section, as amended in 2017, shall be
applicable in determining the rate of tax imposed by this article for all
taxable years beginning after December 31, 2016, and shall be in lieu of the
rates of tax specified in section four-e of this article: Provided: That effective July 1, 2021, this section expires and is no
longer in force or effect, and the provisions of section four-e of this article
shall again become effective.
ARTICLE 24. CORPORATION
NET INCOME TAX.
§11-24-4. Imposition of
primary tax and rate thereof; effective and termination dates.
Primary tax. -- (1) In the case of taxable periods beginning
after June 30, 1967, and ending prior to January 1, 1983, a tax is hereby
imposed for each taxable year at the rate of six percent per annum on the West
Virginia taxable income of every domestic or foreign corporation engaging in
business in this state or deriving income from property, activity or other
sources in this state, except corporations exempt under section five.
(2) In the case of taxable
periods beginning on or after January 1, 1983, and ending prior to July 1,
1987, a tax is hereby imposed for each taxable year on the West Virginia
taxable income of every domestic or foreign corporation engaging in business in
this state or deriving income from property, activity or other sources in this
state, except corporations exempt under section five of this article, and any
banks, banking associations or corporations, trust companies, building and loan
associations and savings and loan associations, at the rates which follow:
(A) On taxable income not
in excess of $50,000, the rate of six percent; and
(B) On taxable income in
excess of $50,000, the rate of seven percent.
(3) In the case of taxable
periods beginning on or after July 1, 1987, a tax is hereby imposed for each
taxable year on the West Virginia taxable income of every domestic or foreign
corporation engaging in business in this state or deriving income from
property, activity or other sources in this state, except corporations exempt
under section five of this article, at the rate of nine and three-quarters
percent. Beginning July 1, 1988, and on each July 1 thereafter for four
successive calendar years, the rate shall be reduced by fifteen one hundredths
of one percent per year, with such rate to be nine percent on and after July 1,
1992.
(4) In the case of taxable
periods beginning on or after January 1, 2007, a tax is hereby imposed for each
taxable year on the West Virginia taxable income of every domestic or foreign
corporation engaging in business in this state or deriving income from property,
activity or other sources in this state, except corporations exempt under
section five of this article, at the rate of eight and three-quarters percent.
(5) In the case of taxable
periods beginning on or after January 1, 2009, a tax is hereby imposed for each
taxable year on the West Virginia taxable income of every domestic or foreign
corporation engaging in business in this state or deriving income from
property, activity or other sources in this state, except corporations exempt
under section five of this article, at the rate of eight and one-half percent.
(6) In the case of taxable
periods beginning on or after January 1, 2012, a tax is hereby imposed for each
taxable year on the West Virginia taxable income of every domestic or foreign
corporation engaging in business in this state or deriving income from
property, activity or other sources in this state, except corporations exempt
under section five of this article, at the rate of seven and three-quarters
percent: Provided, That the reduction in tax authorized by this
subsection shall be suspended if the combined balance of funds as of June 30,
2011, in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall
Reserve Fund - Part B established in section twenty, article two, chapter
eleven-b of this code does not equal or exceed ten percent of the General
Revenue Fund budgeted for the fiscal year commencing July 1, 2011: Provided,
however, That the rate reduction schedule will resume in the calendar year
immediately following any subsequent fiscal year when the combined balance of
funds as of June 30 of that fiscal year in the Revenue Fund Shortfall Reserve
Fund and the Revenue Fund Shortfall Reserve Fund - Part B next equals or
exceeds ten percent of the General Revenue Fund budgeted for the immediately
succeeding fiscal year.
(7) In the case of taxable
periods beginning on or after January 1, 2013, a tax is hereby imposed for each
taxable year on the West Virginia taxable income of every domestic or foreign
corporation engaging in business in this state or deriving income from
property, activity or other sources in this state, except corporations exempt
under section five of this article, at the rate of seven percent: Provided,
That the reduction in tax authorized by this subsection shall be suspended for
one calendar year subsequent to the occurrence of the suspension of the
reduction in tax authorized by subdivision (6) of this section: Provided,
however, That the reduction in tax on the first day of any calendar year
authorized by this subsection shall be suspended if the combined balance of
funds as of June 30 of the preceding year in the Revenue Fund Shortfall Reserve
Fund and the Revenue Fund Shortfall Reserve Fund - Part B established in
section twenty, article two, chapter eleven-b of this code does not equal or
exceed ten percent of the General Revenue Fund budgeted for the fiscal year
commencing July 1, of the preceding year.
(8) In the case of taxable
periods beginning on or after January 1, 2014, a tax is hereby imposed for each
taxable year on the West Virginia taxable income of every domestic or foreign
corporation engaging in business in this state or deriving income from
property, activity or other sources in this state, except corporations exempt
under section five of this article, at the rate of six and one-half percent:
Provided, That the reduction in tax authorized by this subsection shall be
suspended for one calendar year subsequent to the occurrence of the suspension
of the reduction in tax authorized by subdivision (7) of this section:
Provided, however, That the reduction in tax on the first day of any
calendar year authorized by this subsection shall be suspended if the combined
balance of funds as of June 30 of the preceding year in the Revenue Fund
Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B
established in section twenty, article two, chapter eleven-b of this code does
not equal or exceed ten percent of the General Revenue Fund budgeted for the
fiscal year commencing July 1, of the preceding year.
(9) In the case of
taxable periods beginning on or after July 1, 2017, a tax is imposed for each
taxable year on the West Virginia taxable income of every domestic or foreign
corporation engaging in business in this state or deriving income from
property, activity or other sources in this state, except corporations exempt
under section five of this article, at the rate of seven and one-half percent: Provided, That effective July 1, 2021,
the provisions of this subsection expire and the provisions of subsection (8)
are again effective.
NOTE: The purpose of this bill is
to implement several temporary tax increases to stabilize the state budget;
including establishing a 3% food tax, increasing personal income tax rates;
increasing tobacco taxes; and increasing the corporate net income tax rate; all
to expire effective July 1, 2021.
Strike-throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.