Current through Register Vol. XLI, No. 38, September 20, 2024
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.
