West Virginia Code of State Rules › Agency 110 - Tax › Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT › Series 110-24 - Corporation Net Income Tax › Section 110-24-13c - Net operating loss (NOL) carryovers earned during a year in which the Taxpayer filed a consolidated tax return

Current through Register Vol. XLI, No. 28, July 12, 2024
13c.1. West Virginia computes net operating
				losses on a post-apportionment basis, including business and non-business
				income adjustments. NOLs can only be carried forward (or backwards) to be
				applied against West-Virginia source income of the combined group member to
				which it is attributable. NOLs cannot be used by other members of the combined
				group. There is an exception for NOLs earned when the Taxpayer was filing on a
				consolidated basis for West Virginia corporation net income tax purposes for a
				taxable year that began before January 1, 2009. Those NOLs can be carried over
				and applied against the income of any former member of the consolidated
				(controlled) group.
13c.1.a. West Virginia
				Code §
										11-24-13c(b)(1)(G)
				reads in relevant part as follows:
§11-24-13c. Determination of taxable
				income or loss using combined report.
(a) . .
				. .
(b) Components of income
				subject to tax in this State; application of tax credits and post-apportionment
				deductions.
(1) Each taxpayer
				member is responsible for tax based on its taxable income or loss apportioned
				or allocated to this State, which shall include:
(F) Its income or loss allocated or
				apportioned in an earlier year, required to be taken into account as state
				source income during the income year, other than a net operating loss;
				and
(G) Its net operating loss
				carryover. If the taxable income computed pursuant to this section and section
				thirteen-d of this article results in a loss for a taxpayer member of the
				combined group, that taxpayer member has a West Virginia net operating loss,
				subject to the net operating loss limitations, and carryover provisions of this
				article. This West Virginia net operating loss is applied as a deduction in a
				prior or subsequent year only if that taxpayer has West Virginia source
				positive net income, whether or not the taxpayer is or was a member of a
				combined reporting group in the prior or subsequent year: Provided, That net
				operating loss carryovers that were earned during a tax year in which the
				taxpayer filed a consolidated return under this article may be applied as a
				deduction from the West Virginia taxable income of any member of the taxpayer's
				controlled group until the net operating loss carryover is used or expires
				pursuant to the net operating loss provisions of this article.
13c.1.a.1. West Virginia Code §
													11-24-13c(b)(1)(G)
				specifies that there is an exception for NOLs earned when the Taxpayer filed
				its annual West Virginia corporation net income tax return on a consolidated
				basis.
13c.1.a.2. An attempt to
				amend a pre-2009 separate return and file a consolidated return for that year,
				and to use an NOL on that return that was earned in a year when the Taxpayer
				was filing separately will be disallowed. And the Taxpayer cannot claim those
				NOLs on the 2009 and forward combined
				return.