W. Va. Code R. § 110-24-4

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

Section 110-24-4 - Effect of Rate Changes During Taxable Year

4.1. If any rate of tax imposed in W. Va. Code §§ 11-24-1, et seq. changes to become effective before December 31 of a calendar year, and if the taxable year included the effective date for the change of rate, then:

4.1.a. Tentative tax due is computed by applying the rate for the period before the effective date of the change of rate, and the rate for the period on and after that date, to the taxable income of the corporation for the entire taxable year; and

4.1.b. The tax for that taxable year shall be the sum of that proportion of each tentative tax which the number of months in each period bears to the number of months in the entire taxable year.

4.1.c. The procedure in this subsection may only be used when the date of the rate change is other than the first day of the taxable year.

4.2. For purposes of this section:

4.2.a. If the rate changes for taxable years "beginning after" or "ending after" a certain date, the following day shall be considered the effective date of the change; and

4.2.b. If the rate changes for taxable years "beginning on or after" a certain date, that date shall be considered the effective date for the change of rate.

4.2.c. However, if W. Va. Code § 11-10-5p applies with relation to the effective date for a corporation net income tax rate change, then the rate change shall first apply to a particular taxpayer for taxable years beginning on or after the effective date of the act of the Legislature containing the rate change amendment.

4.3. Example. -- The West Virginia Legislature enacts a rate change for the corporation net income tax beginning after June 30. West Virginia Code § 11-10-5p does not apply. The corporation net income tax liability for a calendar year taxpayer is computed by applying the former rate for the months January through June, and the new rate for July and succeeding months. A fiscal year taxpayer would use the former rate for those periods of its tax year occurring before June 30.

4.4. Example. -- The West Virginia Legislature enacts a rate change for the corporation net income tax beginning after June 30 of year 1. West Virginia Code § 11-10-5p applies. The corporation net income tax liability for a calendar year taxpayer is computed by applying the former rate for the tax year of January 1, year 1 through December 31, year 1, and the new rate for the tax year beginning January 1, year 2. and succeeding years. A fiscal year taxpayer would use the former rate for those periods of its tax year occurring before June 30 and through the end of its fiscal year, and the new rate for the next succeeding fiscal year beginning on or after the effective date of the act of the Legislature containing the rate change amendment.

W. Va. Code R. § 110-24-4