ADMINISTRATIVE NOTICE 95-17


SUBJECT:	CORPORATION NET INCOME TAXES -- Meaning of "federal taxable income" and certain other terms updated, for taxable years beginning after December 31, 1993, bringing them into conformity with their meanings for federal income tax purposes.

	On February 15, 1995, Governor Gaston Caperton signed into law Senate Bill No. 173, which updates the meaning of certain terms used in the West Virginia Corporation Net Income Tax Act.  This bill was passed by the Legislature on February 6, 1995, and is effective from passage.

	The West Virginia Corporation Net Income Tax Act uses "federal taxable income" as the starting point when determining a corporation's West Virginia corporation net income tax liability.  Certain other terms used in the Corporation Net Income Tax Act are also defined by incorporating federal income tax definitions.  West Virginia does not, however, automatically adopt changes in federal definitions.  Prior law adopted changes in federal definitions made before January 1, 1994.

	Senate Bill No. 173 adopts changes in federal definitions made prior to January 1, 1995, for taxable years beginning after December 31, 1993.  This means that the amount reported as federal taxable income on a corporation's federal income tax return for calendar year 1994 (Federal Form 1120) must be entered on that corporation's 1994 West Virginia Corporation Net Income Tax return (Form WV/CNIT-120).




Issued February 21, 1995 				James H. Paige III
							Secretary
							Department of Tax and Revenue


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Department of Tax and Revenue				Operator on Duty 8:30 am - 4:00 pm
Taxpayer Services Division					Monday through Friday
P. O. Box 3784						Telephones:  (304) 558-3333 or
Charleston, WV  25337-3784				1-800-982-8297 (within W. Va. only)
							Telescopier:  (304) 558-3269
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								1-800-282-9733