West Virginia Code of State Rules
Agency 110 - Tax
Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT
Series 110-21 - Personal Income Tax
Section 110-21-12b - Modification For The Purchase Of Revenue Bonds Under An Individual Higher Education Savings Plan Program

Universal Citation: 110 WV Code of State Rules 110-21-12b

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

12b.1. Pursuant to W. Va. Code '18-9D-5, the State School Building Authority is authorized to offer to the general public one or more individual higher education savings plan programs. The amount which an individual invests during his or her taxable year in the purchase of revenue bonds issued under W. Va. Code '18-9D-5 shall be allowed as a modification decreasing federal adjusted gross income, to the extent such amount is included therein, in order to arrive at West Virginia taxable income, except as provided under Subsection 12b.1.2.

12b.1.1. The interest which an individual earns on revenue bonds issued under W. Va. Code '18-9D-5 shall not be subject to the imposition of personal income tax under Article 21, Chapter 11 of the West Virginia Code, except as provided in Subsection 12b.1.2.

12b.1.2. If the owner of a bond purchased under W. Va. Code '18-9D-5 sells such bond during a taxable year and does not spend the entire amount for tuition and fees, books, reasonable room and board, and child care to attend an institution which is accredited to award higher education degrees by the West Virginia Board of Regents, or any successor thereto, or by its equivalent in another state, the proceeds of the sale not so spent shall be taxed under Article 21, Chapter 11 of the West Virginia Code, by application of the highest marginal rate applicable to the taxpayer to the amount not so spent.
12b.1.2.1. Penalty. - Where the owner of a bond purchased under W. Va. Code '18-9D-5 sells such bond and does not spend the entire amount for the purposes set forth in Subsection 12b.1.2 of this regulation, there is imposed, in addition to any personal income tax otherwise due, a penalty equal to ten percent (10%) of the tax due.

12b.1.2.1.a. This penalty may be waived by the Tax Commissioner if the taxpayer shows that any failure to spend the sale proceeds of the bond in accordance with Subsection 12b.1.2 was due to reasonable cause and not due to willful neglect.

12b.1.3. The amount of tax and penalty, where applicable, shall be due and payable on the fifteenth (15th) day of the fourth (4th) month of the taxable year immediately succeeding the taxable year in which the bond was sold.

12b.2. Reports. - The West Virginia School Building Authority and the trustee of an individual higher education savings plan program shall make such reports regarding such bonds to the Tax Commissioner and to the individuals of record who own the bonds with respect to bond principal and interest (and the years to which they relate) and such other matters as the Tax Commissioner may require. The reports required under W. Va. Code '18-9D-5(f) shall be filed with the Tax Commissioner at least annually, at such time and in such manner as the Tax Commissioner may require.

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