ADMINISTRATIVE NOTICE 96-19

SUBJECT: WVCNIT -- Meaning of "federal taxable income" for West Virginia corporation net income tax purposes updated to bring it into conformity with its meaning for federal income tax purposes for taxable years beginning after December 31, 1994. Changes in federal law enacted before January 1, 1996, adopted.

On February 21, 1996, Governor Gaston Caperton signed into law Senate Bill No. 92. This bill amends the West Virginia Corporation Net Income Tax Act by updating the meaning of "federal taxable income" which is the starting point for determining West Virginia corporation net income tax liability.

Federal changes adopted are those made after December 31, 1994, but before January 1, 1996, which affect determination of "federal taxable income." These changes are made retroactive to taxable years beginning after December 31, 1994, to the same extent allowed for federal income tax purposes.

Changes in federal income tax law do not automatically become part of West Virginia corporation net income tax law. Therefore, any change in federal income tax law affecting the definition of "federal taxable income" made after December 31, 1995, must be adopted by the West Virginia Legislature before such change is recognized for West Virginia corporation net income tax purposes.

ISSUED: February , 1996 James H. Paige III

Secretary/Tax Commissioner

For additional information please write or call:

W. Va. Dept. 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)

Telecopier: (304) 558-3269

TDD Service for the hearing impaired:

1-800-282-9833