W. Va. Code R. § 110-13J-3

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-13J-3 - Description of the Credit

3.1. The purpose of this credit is to create an incentive for the agricultural industry in this State to protect the environment by purchasing and installing qualified agricultural equipment for use in agricultural operations in this State.

3.1.1. Agricultural operations include only the commercial production of food, fiber, or woodland products (but not timbering activity) by means of cultivation, tillage of the soil or by the conduct of animal, livestock, dairy, apiary, equine or poultry husbandry, aquacultural activity, horticultural activity, or any other plant or animal production activity and all farm practices related, usual or incidental to the operations.

3.1.2. Commercial production consists of annual sales by the producer of at least one thousand dollars ($1,000) of agricultural products, except that for the first twelve (12) months after (1) the occurrence of a catastrophe (such as fire, drought or flood), other than merely mechanical breakdowns, which substantially destroyed the agricultural product being produced or the means for harvesting that product or (2) the commercial producer of an agricultural product has first commenced the production activity, the requirement of annual sales of at least one thousand dollars ($1,000) of agricultural products need not be satisfied in order for the activity to be the commercial production of an agricultural product.

3.2. This credit may be applied against an eligible taxpayer's Personal Income Tax or Corporation Net Income Tax liability for taxable years beginning on or after July 1, 1997.

3.2.1. For calendar year taxpayers, this credit will be available beginning in tax year 1998.

3.2.2. In no event may credit from any purchase be applied against both Personal Income Tax and also Corporation Net Income Tax.

3.3. This credit is available to taxpayers who purchase and install qualified agricultural equipment for use in their agricultural operations in this State and who meet the requirements of W. Va. Code '11-13J-1 et seq. and this rule.

3.3.1. This credit is not available for purchases of agricultural equipment for resale or for any purpose other than for use in the taxpayer's own agricultural operations in this State.

3.4. The total amount of credit available to any taxpayer for purchases during a taxable year is twenty- five percent (25%) of the total purchase price of all certified expenditures for qualified agricultural equipment purchased during the taxable year.

3.4.1. The taxpayer may include only expenditures made in taxable years beginning on or after July 1, 1997 in the amount certified. However, for calendar year taxpayers, the taxpayer may include only expenditures made on or after January 1, 1998 in the amount certified.

3.4.2. The amount of credit which the taxpayer may use in any single taxable year may not exceed the lesser of two thousand five hundred dollars ($2,500), or the amount of the taxpayer's Personal Income Tax or Corporation Net Income Tax liability for the year the qualified agricultural equipment was purchased.

3.4.3. If the amount of credit available exceeds the taxpayer's income tax liability for the taxable year in which the qualified agricultural equipment was purchased, the taxpayer may carry over the amount of the excess credit and use it in any one (1) or more of the next consecutive five (5) taxable years until no excess credit remains or until the time for claiming the credit has expired, after which time any unused credit is forfeited.

3.4.3.1. If a taxpayer does not claim any excess credit in a tax year in which it could be claimed, it is forfeited. However, the unclaimed credit is not forfeited if subsequently claimed for that tax year on a timely filed amended return.

3.4.3.2. The taxpayer must apply any excess credit carried over to subsequent tax years before any new tax credit for qualified agricultural equipment purchased in subsequent years, but after any other type of tax credit except for credit for overpayment of tax.

3.4.3.3. Credit for any purchase of qualified agricultural equipment may be used only by one taxpayer, is limited to the actual amount paid by that taxpayer, and may not be assigned or otherwise transferred to any other taxpayer. However, a husband and wife filing a joint personal income tax return may both claim the credit.

3.4.4. Example.

Farmer Glick is a calendar year taxpayer with a personal income tax liability of eight thousand dollars ($8,000) in tax year 1998. As a calendar year taxpayer, Farmer Glick is able to use the credit for the first time in tax year 1998. He purchased qualified agricultural equipment for his farm for twelve thousand dollars ($12,000) in 1998, and the equipment was properly certified. The total amount of credit he could use in tax years 1998 through 2003 would be twenty-five percent (25%) of twelve thousand dollars ($12,000), or three thousand dollars ($3,000). The maximum amount of the three thousand dollars ($3,000) credit which he could use in tax year 1998 would be the lesser of either two thousand five hundred dollars ($2,500) or eight thousand dollars ($8,000) (his 1996 tax liability), which is two thousand five hundred dollars ($2,500). The remaining five hundred dollars ($500) excess credit may be carried over and used in tax year 1999. Farmer Glick is able to carryover and use the entire $500 excess credit in tax year 1999 and does so, so none of this credit remains to be used in future tax years and none is forfeited.

W. Va. Code R. § 110-13J-3