Imposition of Tax; Minimum Tax; Persons Subject To Tax

3.1. Imposition of Tax.

3.1.1. Primary Tax. The West Virginia Personal Income Tax Act, W. Va. Code §11-21, imposes a personal income tax on the West Virginia taxable income of every individual, estate, and trust in accordance with the rates set forth therein.

3.1.2. Minimum Tax. In addition to the primary tax, there is imposed, pursuant to W. Va. code §11-21-3(a)(3), a minimum tax. This minimum tax is the excess, if any, by which an amount equal to twenty-five percent (25%) of any federal minimum tax or alternative minimum tax for the taxable year exceeds the sum of the primary tax imposed for the taxable year.

3.1.2.1. In determining the amount of the West Virginia minimum tax, taxpayers whose federal base income, for puposes of computing any federal minimum tax or alternative minimum tax, includes items of income which the states are prohibited under federal law from taxing or items of income specifically exempt from personal income taxation by the West Virginia Code must subtract such items of income from their federal base income and recompute their federal minimum tax before calculating the amount of West Virginia minimum tax.

3.2. Partners and partnership. A partnership is not subject to the personal income tax, although individuals carrying on business as partners are liable for tax in their separate or individual capacities. (See section 58.2 as to filing of returns by partnerships).

3.3. Associations taxable as corporations. A corporation is not a taxable entity within the purview of the West Virginia Personal Income Tax Act. An association, trust or other unincorporated organization which is taxable as a corporation for federal income tax purposes is not subject to the personal income tax. A corporation, association, trust or unincorporated organization must be so taxed under Subchapter C of the Internal Revenue Code of 1986, as amended, in order to be beyond the purview of the West Virginia Personal Income Tax Act.

3.4. Exempt trust and organizations. A trust or other unincorporated organization which by reason of its purposes or activities is exempt from federal income tax is exempt from the personal income tax, regardless of whether such organization is subject to federal income tax on unrelated business taxable income. Thus, for such an unincorporated organization, there is no unrelated business income tax in West Virginia.

3.5. Cross references.

3.5.1. For definition of West Virginia taxable income of resident individuals, see section 11 of these regulations.

3.5.2. For definition of the West Virginia taxable income of resident estates and trusts, see section 18 of these regulations.

3.5.3. For definition of the West Virginia taxable income of nonresident individuals, see section 31 of these regulations.

3.5.4. For definition of the West Virginia taxable income of nonresident estates and trusts, see section 38 of these regulations.