Bulletin Number
VTB 80-2
Tax Type
Bank Franchise Tax
Description
Bank Franchise Tax - Filing Instructions (Form 64)
Topic
Basis of Tax
Returns and Payments
Date Issued
03-13-1980
DATE: March 13, 1980
SUBJECT: Bank Franchise Tax - Filing Instructions (Form 64)
H.B. 994, which repeals the Bank Share Tax and the interim Bank Franchise Tax, and imposes a new Bank Franchise Tax measured by net capital was passed by the 1980 Session of the General Assembly.
The new law is effective for the year 1980 and specifics a filing date of March 1. However, the Department has extended the filing date for 1980 to April 1.
Since time does not permit the printing of a new return, Form 64, Return of Shares of Stock Issued by Banks and Trust Companies will be used for the 1980 filing but tax preparers for the banks must pay close attention to the special 1980 Instructions.
The new tax differs from the Bank Shares Tax primarily in that it is a franchise tax imposed on banks rather than a property tax imposed on shareholders. Therefore, the Bank Franchise Tax provides no exemptions relative to bank shares held by organizations exempt from property taxes. The new tax, however, like the old, is based upon net taxable capital.* The new law mirrors the old except that the following additional deductions may be made from "gross" capital (capital, surplus and undivided profits), to-wit:
(1). The portion of a bank's capital attributable to federal obligations. See §§ 58-485.07 (iii) and 58-485.08(3) of the new law and new Schedule H of Form 64.
* Under the Bank Share Tax, the taxable value of a bank share was determined by dividing the total number of bank shares into the"net capital" value of the bank as prescribed in § 58-471.
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