ENROLLED
H. B. 3357
(By Delegates Michael, Doyle, Kominar, Proudfoot, Boggs,
Stalnaker and Williams)
[Passed April 6, 2005; in effect ninety days from passage.]
AN ACT to amend and reenact §11-15B-2 and §11-15B-2a of the code
of West Virginia, 1931, as amended; and to further amend said
code by adding thereto a new section, designated §11-15B-4a,
all relating generally to streamlined sales and use tax
administration; defining certain terms; and providing for
representation on governing board of streamlined sales and use
tax agreement.
Be it enacted by the Legislature of West Virginia:
That §11-15B-2 and §11-15B-2a of the code of West Virginia,
1931, as amended, be amended and reenacted; and that said code be
further amended by adding thereto a new section, designated §11-
15B-4a, all to read as follows:
ARTICLE 15B. STREAMLINED SALES AND USE TAX ADMINISTRATION ACT.
§11-15B-2. Definitions.
(a)
General. -- When used in this article and articles fifteen
and fifteen-a of this chapter, words defined in subsection (b) of
this section shall have the meanings ascribed to them in this
section, except in those instances where a different meaning is distinctly expressed or the context in which the term is used
clearly indicates that a different meaning is intended by the
Legislature.
(b)
Terms defined.
(1) "Agent" means a person appointed by a seller to represent
the seller before the member states.
(2) "Agreement" means the streamlined sales and use tax
agreement, as defined in section two-a of this article.
(3) "Alcoholic beverages" means beverages that are suitable
for human consumption and contain one half of one percent or more
of alcohol by volume.
(4) "Certified automated system" or "CAS" means software
certified under the agreement to calculate the tax imposed by each
jurisdiction on a transaction, determine the amount of tax to remit
to the appropriate state, and maintain a record of the transaction.
(5) "Certified service provider" or "CSP" means an agent
certified under the agreement to perform all of the seller's sales
tax functions.
(6) "Computer" means an electronic device that accepts
information in digital or similar form and manipulates the
information for a result based on a sequence of instructions.
(7) "Computer software" means a set of coded instructions
designed to cause a "computer" or automatic data processing
equipment to perform a task.
(8) "Delivered electronically" means delivered to the
purchaser by means other than tangible storage media.
(9) "Delivery charges" means charges by the seller of personal
property or services for preparation and delivery to a location
designated by the purchaser of personal property or services
including, but not limited to, transportation, shipping, postage,
handling, crating, and packing.
(10) "Dietary supplement" means any product, other than
"tobacco", intended to supplement the diet that:
(A) Contains one or more of the following dietary ingredients:
(i) A vitamin;
(ii) A mineral;
(iii) A herb or other botanical;
(iv) An amino acid;
(v) A dietary substance for use by humans to supplement the
diet by increasing the total dietary intake; or
(vi) A concentrate, metabolite, constituent, extract or
combination of any ingredient described in subparagraph (I) through
(v) of this subdivision;
(B) Is intended for ingestion in tablet, capsule, powder,
softgel, gelcap, or liquid form, or if not intended for ingestion
in such a form, is not represented as conventional food and is not
represented for use as a sole item of a meal or of the diet; and
(C) Is required to be labeled as a dietary supplement,
identifiable by the "Supplemental Facts" box found on the label as
required pursuant to 21 CFR §101.36, or in any successor section of
the code of federal regulations.
(11) "Direct mail" means printed material delivered or distributed by United States mail or other delivery service to a
mass audience or to addressees on a mailing list provided by the
purchaser or at the direction of the purchaser when the cost of the
items are not billed directly to the recipients. "Direct mail"
includes tangible personal property supplied directly or indirectly
by the purchaser to the direct mail seller for inclusion in the
package containing the printed material. "Direct mail" does not
include multiple items of printed material delivered to a single
address.
(12) "Drug" means a compound, substance or preparation, and
any component of a compound, substance or preparation, other than
food and food ingredients, dietary supplements or alcoholic
beverages:
(A) Recognized in the official United States pharmacopoeia,
official homeopathic pharmacopoeia of the United States, or
official national formulary, and supplement to any of them;
(B) Intended for use in the diagnosis, cure, mitigation,
treatment, or prevention of disease in humans; or
(C) Intended to affect the structure or any function of the
human body.
(13) "Durable medical equipment" means equipment including
repair and replacement parts for the equipment, but does not
include "mobility-enhancing equipment", which:
(A) Can withstand repeated use;
(B) Is primarily and customarily used to serve a medical
purpose;
(C) Generally is not useful to a person in the absence of
illness or injury; and
(D) Is not worn in or on the body.
(14) "Electronic" means relating to technology having
electrical, digital, magnetic, wireless, optical, electromagnetic,
or similar capabilities.
(15) "Entity-based exemption" means an exemption based on who
purchases the product or service or who sells the product or
service.
(16) "Food and food ingredients" means substances, whether in
liquid, concentrated, solid, frozen, dried or dehydrated form, that
are sold for ingestion or chewing by humans and are consumed for
their taste or nutritional value. "Food and food ingredients" does
not include alcoholic beverages or tobacco.
(17) "Includes" and "including" when used in a definition
contained in this article is not considered to exclude other things
otherwise within the meaning of the term being defined.
(18) "Lease" includes rental, hire and license. "Lease" means
any transfer of possession or control of tangible personal property
for a fixed or indeterminate term for consideration. A lease or
rental may include future options to purchase or extend.
(A) "Lease" does not include:
(i) A transfer of possession or control of property under a
security agreement or deferred payment plan that requires the
transfer of title upon completion of the required payments;
(ii) A transfer or possession or control of property under an agreement that requires the transfer of title upon completion of
required payments and payment of an option price does not exceed
the greater of one hundred dollars or one percent of the total
required payments; or
(iii) Providing tangible personal property along with an
operator for a fixed or indeterminate period of time. A condition
of this exclusion is that the operator is necessary for the
equipment to perform as designed. For the purpose of this
subparagraph, an operator must do more than maintain, inspect, or
set-up the tangible personal property.
(B) This definition shall be used for sales and use tax
purposes regardless if a transaction is characterized as a lease or
rental under generally accepted accounting principles, the Internal
Revenue Code, the uniform commercial code, or other provisions of
federal, state or local law.
(19) "Load and leave" means delivery to the purchaser by use
of a tangible storage media where the tangible storage media is not
physically transferred to the purchaser.
(20) "Mobility enhancing equipment" means equipment, including
repair and replacement parts to the equipment, but does not include
"durable medical equipment", which:
(A) Is primarily and customarily used to provide or increase
the ability to move from one place to another and which is
appropriate for use either in a home or a motor vehicle;
(B)Is not generally used by persons with normal mobility; and
(C) Does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.
(21) "Model I seller" means a seller that has selected a
certified service provider as its agent to perform all the seller's
sales and use tax functions, other than the seller's obligation to
remit tax on its own purchases.
(22) "Model II seller" means a seller that has selected a
certified automated system to perform part of its sales and use tax
functions, but retains responsibility for remitting the tax.
(23) "Model III seller" means a seller that has sales in at
least five member states, has total annual sales revenue of at
least five hundred million dollars, has a proprietary system that
calculates the amount of tax due each jurisdiction, and has entered
into a performance agreement with the member states that
establishes a tax performance standard for the seller. As used in
this definition, a seller includes an affiliated group of sellers
using the same proprietary system.
(24) "Person" means an individual, trust, estate, fiduciary,
partnership, limited liability company, limited liability
partnership, corporation or any other legal entity.
(25) "Personal service" includes those:
(A) Compensated by the payment of wages in the ordinary course
of employment; and
(B) Rendered to the person of an individual without, at the
same time, selling tangible personal property, such as nursing,
barbering, manicuring and similar services.
(26) "Prescription" means an order, formula or recipe issued in any form of oral, written, electronic, or other means of
transmission by a duly licensed practitioner authorized by the laws
of this state to issue prescriptions.
(27) "Prewritten computer software" means "computer software",
including prewritten upgrades, which is not designed and developed
by the author or other creator to the specifications of a specific
purchaser.
(A) The combining of two or more prewritten computer software
programs or prewritten portions thereof does not cause the
combination to be other than prewritten computer software.
(B) "Prewritten computer software" includes software designed
and developed by the author or other creator to the specifications
of a specific purchaser when it is sold to a person other than the
purchaser. Where a person modifies or enhances computer software of
which the person is not the author or creator, the person is
considered to be the author or creator only of the person's
modifications or enhancements.
(C) "Prewritten computer software" or a prewritten portion
thereof that is modified or enhanced to any degree, where the
modification or enhancement is designed and developed to the
specifications of a specific purchaser, remains prewritten computer
software: Provided, That where there is a reasonable, separately
stated charge or an invoice or other statement of the price given
to the purchaser for the modification or enhancement, the
modification or enhancement does not constitute prewritten computer
software.
(28) "Product-based exemption" means an exemption based on the
description of the product or service and not based on who
purchases the product or service or how the purchaser intends to
use the product or service.
(29) "Prosthetic device" means a replacement, corrective, or
supportive device, including repair and replacement parts for the
device worn on or in the body, to:
(A) Artificially replace a missing portion of the body;
(B) Prevent or correct physical deformity or malfunction of
the body; or
(C) Support a weak or deformed portion of the body
(30) "Protective equipment" means items for human wear and
designed as protection of the wearer against injury or disease or
as protections against damage or injury of other persons or
property but not suitable for general use.
(31) "Purchase price" means the measure subject to the tax
imposed by article fifteen or article fifteen-a of this chapter and
has the same meaning as sales price.
(32) "Purchaser" means a person to whom a sale of personal
property is made or to whom a service is furnished.
(33) "Registered under this agreement" means registration by
a seller with the member states under the central registration
system provided in article four of the agreement.
(34) "Retail sale" or "sale at retail" means:
(A) Any sale or lease for any purpose other than for resale as
tangible personal property, sublease or subrent; and
(B) Any sale of a service other than a service purchased for
resale.
(35)(A) "Sales price" means the measure subject to the tax
levied by this article and includes the total amount of
consideration, including cash, credit, property and services, for
which personal property or services are sold, leased or rented,
valued in money, whether received in money or otherwise, without
any deduction for the following:
(i) The seller's cost of the property sold;
(ii) The cost of materials used, labor or service cost,
interest, losses, all costs of transportation to the seller, all
taxes imposed on the seller, and any other expense of the seller;
(iii) Charges by the seller for any services necessary to
complete the sale, other than delivery and installation charges;
(iv) Delivery charges;
(v) Installation charges;
(vi) The value of exempt personal property given to the
purchaser where taxable and exempt personal property have been
bundled together and sold by the seller as a single product or
piece of merchandise; and
(vii) Credit for the fair market value of any trade-in.
(B) "Sales price" does not include:
(i) Discounts, including cash, term, or coupons that are not
reimbursed by a third party that are allowed by a seller and taken
by a purchaser on a sale;
(ii) Interest, financing, and carrying charges from credit extended on the sale of personal property, goods or services, if
the amount is separately stated on the invoice, bill of sale or
similar document given to the purchaser; and
(iii) Any taxes legally imposed directly on the consumer that
are separately stated on the invoice, bill of sale or similar
document given to the purchaser.
(36) "Sales tax" means the tax levied under article fifteen of
this chapter.
(37) "Seller" means any person making sales, leases or rentals
of personal property or services.
(38) "Service" or "selected service" includes all
nonprofessional activities engaged in for other persons for a
consideration, which involve the rendering of a service as
distinguished from the sale of tangible personal property, but does
not include contracting, personal services, services rendered by an
employee to his or her employer, any service rendered for resale,
or any service furnished by a business that is subject to the
control of the public service commission when the service or the
manner in which it is delivered is subject to regulation by the
public service commission of this state. The term "service" or
"selected service" does not include payments received by a vendor
of tangible personal property as an incentive to sell a greater
volume of such tangible personal property under a manufacturer's,
distributor's or other third-party's marketing support program,
sales incentive program, cooperative advertising agreement or
similar type of program or agreement, and these payments are not considered to be payments for a "service" or "selected service"
rendered, even though the vendor may engage in attendant or
ancillary activities associated with the sales of tangible personal
property as required under the programs or agreements.
(39) "State" means any state of the United States and the
District of Columbia.
(40) "Tangible personal property" means personal property that
can be seen, weighed, measured, felt, or touched, or that is in any
manner perceptible to the senses. "Tangible personal property"
includes, but is not limited to, electricity, steam, water, gas,
and prewritten computer software.
(41) "Tax" includes all taxes levied under articles fifteen
and fifteen-a of this chapter, and additions to tax, interest and
penalties levied under article ten of this chapter.
(42) "Tax commissioner" means the state tax commissioner or
his or her delegate. The term "delegate" in the phrase "or his or
her delegate", when used in reference to the tax commissioner,
means any officer or employee of the state tax division duly
authorized by the tax commissioner directly, or indirectly by one
or more redelegations of authority, to perform the functions
mentioned or described in this article or rules promulgated for
this article.
(43) "Taxpayer" means any person liable for the taxes levied
by articles fifteen and fifteen-a of this chapter or any additions
to tax, penalties imposed by article ten of this chapter.
(44) "Tobacco" means cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco
(45) "Use tax" means the tax levied under article fifteen-a of
this chapter.
(46) "Use-based exemption" means an exemption based on the
purchaser's use of the product or service.
(47) "Vendor" means any person furnishing services taxed by
article fifteen or fifteen-a of this chapter, or making sales of
tangible personal property or custom software. "Vendor" and
"seller" are used interchangeably in this article and in article
fifteen and fifteen-a of this chapter.
(c)
Additional definitions. -- Other terms used in this
article are defined in articles fifteen and fifteen-a of this
chapter, which definitions are incorporated by reference into this
article. Additionally, other sections of this article may define
terms primarily used in the section in which the term is defined.
§11-15B-2a. Streamlined sales and use tax agreement defined.
As used in this article and articles fifteen and fifteen-a of
this chapter, the term "streamlined sales and use tax agreement" or
"agreement" means the agreement adopted the twelfth day of
November, two thousand two, by states that enacted authority to
engage in multistate discussions similar to that provided in
section four of this article, except when the context in which the
term is used clearly indicates that a different meaning is intended
by the Legislature. "Agreement" includes amendments to the
agreement adopted by the implementing states in calendar years two
thousand three and two thousand four but does not include any substantive changes in the agreement adopted after the first day of
January, two thousand five.
§11-15B-4a. Representatives to governing board of streamlined
sales and use tax agreement.
Upon implementation of the streamlined sales and use tax
agreement and this state becoming a party to the agreement, West
Virginia shall have four representatives to the governing board of
the agreement. Two representatives shall be the secretary of
revenue and the tax commissioner, or their respective designees;
and two representatives shall be appointed by the president of the
Senate and the speaker of the House of Delegates.
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