SB 710
Eliminating double taxation on foreign income at state level
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- Passed Senate
- Passed House of Delegates
- To Governor
- Became Law
Bill overview
This bill aims to prevent double taxation of income earned in foreign countries by West Virginia residents. It allows residents to claim a credit against their West Virginia state income tax for income taxes paid to other states or foreign countries. The credit is limited to the percentage of West Virginia income subject to tax and is subject to certain conditions, including demonstrating that without the credit, double taxation would occur under federal law. The credit will expire in 2070.
Key provisions
- Allows West Virginia residents to claim a credit against their state income tax for income taxes paid to other states or foreign countries.
- The credit is calculated as a percentage of the taxpayer’s West Virginia income subject to tax.
- A credit for income paid to a foreign country requires demonstrating that without the credit, double taxation would occur.
- The credit cannot reduce the state income tax owed below the amount that would have been due without the foreign income.
- The credit is subject to an exception if another jurisdiction offers a similar credit.
- The credit sunsets on July 1, 2070.
- Pass-through entity owners are liable for taxes paid to other states by their entities.
- West Virginia income is defined as adjusted gross income, estate/trust income, or electing pass-through entity income.
Who is affected
- West Virginia residents
- Individuals with income from foreign countries
- Pass-through entity owners
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