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SB 393

Updating corporate net income tax definitions

2026 Regular Session Introduced by Mike Woelfel

SB 393 aligns WV corporate net income tax definitions with federal tax terms and allows retroactive 2025 federal changes to apply, but not 2026 changes.

Chapter 278, Acts, Regular Session, 2026
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Bill Summary · SB 393

Summary of SB 393 (2026) – West Virginia

Purpose and intent

  • SB 393 amends and reenacts a provision of the West Virginia Corporation Net Income Tax (Article 24), with the goal of aligning terms used in this state tax with their meanings in federal income tax context.
  • The bill seeks to bring terms that are not defined in the state tax act into conformity with federal definitions, and to ensure that changes to federal law made after 2024 and before 2026 are reflected in the WV tax to the extent allowed for federal purposes.
  • It also clarifies how the Internal Revenue Code (IRC) is interpreted for WV tax purposes and provides retroactive handling consistent with federal tax-law changes up to a specified date.

Key provisions and changes

  • Section §11-24-3(a): General rule that terms in WV corporate net income tax use the same meaning as in federal tax law when used in a comparable context, unless the WV code requires a different meaning.
    • References to the Internal Revenue Code (IRC) mean the Code as amended (including the 1986 Code and related parts that existed when the 1986 Reform Act was enacted).
    • Amendments to federal law made after December 31, 2024, but before January 1, 2026, are to be given effect in WV tax determinations to the extent allowed for federal purposes, including retroactive or prospective changes.
    • Federal changes made on or after January 1, 2026, shall not be given effect.
  • §11-24-3(b): Clarifies definitional scope for Internal Revenue Code references.
    • The term “Internal Revenue Code of 1986” includes provisions formerly known as the Internal Revenue Code of 1954, as amended and in effect when the 1986 Act was enacted, and those provisions not amended or repealed by the 1986 Act.
    • In practice, references to the 1954 Code are treated as the 1986 Code (and vice versa) except where inappropriate.
  • §11-24-3(c): Effective date.
    • Retroactive to the extent allowed under federal law for amendments enacted in 2026.
    • For taxable years beginning before January 1, 2026, the law in effect for those years remains fully preserved, except as provided in this section.

Who/what is affected

  • West Virginia corporate taxpayers subject to the WV corporate net income tax.
  • The interpretation and application of terms within WV tax statutes, by aligning them with federal tax definitions.
  • Tax practitioners and taxpayers who rely on consistent treatment of federal tax provisions in calculating WV corporation net income tax.

Procedural and timeline aspects

  • Effective date: The act is in effect upon passage (retroactive to the extent allowed) and especially addresses changes for taxable years starting before 2026.
  • Retroactivity: Allows synchronization of WV tax treatment with federal changes enacted through 2025, while excluding federal changes made on or after January 1, 2026 from WV consideration.
  • Final enactment and publication: The bill was enrolled and enacted in the 2026 Regular Session; it received final approval and was signed into law, becoming Chapter 278, Acts, Regular Session, 2026.

Practical implications

  • Taxpayers should anticipate that WV conformed definitions will mirror federal definitions in most contexts, reducing potential discrepancies between federal and WV corporate tax calculations.
  • Any federal tax changes enacted in 2025 (but not those enacted in 2026 onward) may influence WV taxable income determinations, subject to what is allowed under federal law.
  • For years beginning before 2026, taxpayers should preserve the pre-2026 WV law unless the 2026 amendments explicitly apply by retroactive effect.

If you’d like, I can provide a side-by-side comparison of specific terms and how their definitions shift under SB 393.

Compiled from official sources — confirm details with the bill’s official record.

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