Current through Register Vol. XLI, No. 38, September 20, 2024
3.1. Eligible taxpayers -- for purposes of
the motor vehicle property tax adjustment credit, the term "eligible taxpayer"
has different definitions, depending on the ownership of the vehicle.
3.1.1. Vehicles owned by the taxpayer. In the
case of a vehicle that is owned by the taxpayer, an "eligible taxpayer" is any
person who owns a motor vehicle for which the ad valorem
property tax has been timely paid during the corporation net income tax taxable
year or the personal income tax taxable year, as applicable. For purposes of
this definition, ownership of a motor vehicle includes ownership and possession
of a motor vehicle for which a title has been issued by the Division of Motor
Vehicles to the eligible taxpayer. For purposes of this definition, ownership
of a motor vehicle also includes ownership and possession of a motor vehicle,
subject to a purchase financing arrangement whereby a financial institution
holds a lien on the motor vehicle, or for which ultimate issuance of title by
the Division of Motor Vehicles to the taxpayer, as owner of the motor vehicle,
is contingent upon payment in full of the purchase price of the motor vehicle
pursuant to an installment payment financing arrangement.
3.1.2. Leased vehicles. In the case of a
vehicle that is subject to lease agreement between the owner of the vehicle and
the operator of the vehicle, an "eligible taxpayer" is the lessor of the motor
vehicle, who owns the motor vehicle for which the ad valorem
property tax has been timely paid during the corporation net income tax taxable
year or the personal income tax taxable year, as applicable. The lessor must
pass on to the lessee the value of the tax credit asserted by the lessor by
causing a decreasing in the amount of rent or lease payment payable by the
lessee on the leased motor vehicle.
3.1.3. Pass-through entities. The term
"eligible taxpayer" includes any owner, interest holder, partner or S
corporation shareholder that derives conduit income from a pass-through
entity.
3.1.4. Motor vehicle
dealers. The term "eligible taxpayer" does not include any motor vehicle
dealer, motor vehicle dealership, retailer or any business that sells new or
used motor vehicles at the retail level, other than a lessor of motor vehicles.
In circumstances where any such motor vehicle dealer, motor vehicle dealership,
retailer or business that sells new or used motor vehicles at the retail level
is engaged in both retail sales of motor vehicles, and leasing of motor
vehicles as lessor, the tax credit authorized by this article may only be
asserted by such business based upon the ad valorem property
tax paid on leased motor vehicles, and only to the extent that the lessor has
passed on, to the lessee, the value of the tax credit asserted by the lessor by
causing a decreasing in the amount of rent or lease payment payable by the
lessee on the leased motor vehicle. No credit may be asserted or applied by the
business based upon ad valorem property tax paid on motor
vehicle retail inventories, not actively leased to lessees. To the extent that
motor vehicle retail inventories may be held as both motor vehicle retail
inventories, and as motor vehicles potentially subject to lease during the
taxable year, ad valorem property tax paid on such motor
vehicles is excluded from eligibility for the tax credit authorized by this
rule.
3.2. Amount of
credit. -- The amount of the credit is the amount of West Virginia ad
valorem property tax timely paid on the value of a motor vehicle owned
by the eligible taxpayer during the taxpayer's personal income tax taxable year
or corporation net income tax taxable year, whichever is applicable. The
payment must have been timely made, meaning that it must be received by the
county sheriff on or before the due date for paying the tax. Payments made that
are untimely, delinquent, or for "back taxes" are not allowed to be used for
purposes of the credit.
3.3.
Refundable nature of the credit. -- If the amount of the annual tax credit
exceeds the amount of the applicable income tax, then the taxpayer may claim
the excess amount as a refundable tax credit. A taxpayer must file a personal
income tax return or corporation net income tax return to claim the refundable
credit, even if the taxpayer owes no income tax for the relevant income tax
year. However, any refundable tax credit amount is subject to offset, meaning
that the amount refunded may be reduced by the amount of any other tax owed by
the same taxpayer, pursuant to W. Va. Code §11-10-11(j).
3.4. Transfer or sale of the motor vehicle.
-- When there is a sale or transfer of a motor vehicle from an eligible
taxpayer to any other person or entity, the consequences are:
3.4.1. The transferor of the motor vehicle
retains entitlement to the tax credit for the timely paid ad
valorem property tax paid on the motor vehicle by the transferor
during the transferor's applicable income tax year.
3.4.2. If the transferee of the motor vehicle
qualifies as an eligible taxpayer for purposes of the motor vehicle property
tax adjustment credit, then the transferee is entitled to the tax credit for
the timely paid ad valorem property tax paid by the transferee
on the motor vehicle during the transferee's applicable income tax
year.
3.4.3. The transferor and
transferee cannot both take the tax credit for the same taxable year.
3.5. For purposes of claiming the
tax credit, the taxpayer is required to prepare and file an annual schedule in
a form prescribed by the Tax Commissioner that shows:
(1) the amount of personal income tax or
corporation net income tax for the taxpayer's taxable year,
(2) the amount of ad valorem
property tax paid on the motor vehicle during the income taxable year, and
(3) the amount of credit
allowed.
