Detailed West Virginia Development
West Virginia House Bill 2026, which was signed into law on April 9, 2021, “modernizes” certain aspects of West Virginia’s corporate net income tax laws effective for all tax years beginning on or after January 1, 2022. Currently, income is apportioned to West Virginia by use of a three-factor double-weighted sales formula. House Bill 2026 adopts single-sales factor apportionment and market-based sourcing. The sourcing provisions attribute service receipts to the location where the services are delivered and receipts from intangibles generally to the location where the intangibles are used. West Virginia currently has a unique throwout rule that applies to sales of tangible personal property shipped to a purchaser in a state where in which the taxpayer is not taxable. House Bill 2026 eliminates this throwout rule. In addition to the corporate net income tax changes, the bill also provides that an employer need not withhold income tax on a nonresident individual performing employment duties in the state (with certain exceptions for athletes and entertainers) until the employee spends at least 30 days performing duties in the state. Please stay tuned to TWIST for additional legislative developments.
This Week's Developments