ENROLLED
H. B. 4518
(By Delegates Beane, Mezzatesta and Michael)
[Passed March 14, 1998; in effect ninety days from passage.]
AN ACT to amend and reenact section five, article thirteen,
chapter eight of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to business
and occupation or privilege tax; limitation on rates;
treatment of health maintenance organizations; effective
date of tax on health maintenance organizations.
Be it enacted by the Legislature of West Virginia:
That section five, article thirteen, chapter eight of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 13. TAXATION AND FINANCE
§8-13-5. Business and occupation or privilege tax; limitation
on rates; effective date of tax; exemptions;
activity in two or more municipalities;
administrative provisions.
(a) Authorization to impose tax.
-- (1) Whenever any
business activity or occupation, for which the state imposed its
annual business and occupation or privilege tax under article thirteen, chapter eleven of this code, prior to July one, one
thousand nine hundred eighty-seven, is engaged in or carried on
within the corporate limits of any municipality, the governing
body thereof shall have plenary power and authority, unless
prohibited by general law, to impose a similar business and
occupation tax thereon for the use of the municipality.
(2) Municipalities may impose a business and occupation or
privilege tax upon every person engaging or continuing within the
municipality in the business of aircraft repair, remodeling,
maintenance, modification and refurbishing services to any
aircraft or to an engine or other component part of any aircraft
as a separate business activity.
(b) Maximum tax rates.
-- In no case shall the rate of such
municipal business and occupation or privilege tax on a
particular activity exceed the maximum rate imposed by the state,
exclusive of surtaxes, upon any business activities or privileges
taxed under sections two-a, two-b, two-c, two-d, two-e, two-g,
two-h, two-i and two-j, article thirteen of said chapter eleven,
as such rates were in effect under said article thirteen, on
January one, one thousand nine hundred fifty-nine, or in excess
of one percent of gross income under section two-k of said
article thirteen, or in excess of three tenths of one percent of
gross value or gross proceeds of sale under section two-m of said
article thirteen. The rate of municipal business and occupation
or privilege tax on the activity described in subdivision (2),
subsection (a) of this section shall be ten one-hundredths of one
percent. The rate of municipal business and occupation or privilege tax on the activity of a health maintenance
organization holding a certificate of authority under the
provisions of article twenty-five-a, chapter thirty-three of this
code, shall not exceed one half of one percent to be applied
solely to that portion of gross income received from the medicaid
program pursuant to Title XIX of the Social Security Act, the
state employee programs administered by the public employees
insurance agency pursuant to article sixteen, chapter five of
this code, and other federal programs, for health care items or
services provided directly or indirectly by the health
maintenance organization, that is expended for administrative
expenses; and shall not exceed one half of one percent to be
applied to the gross income received from enrollees, or from
employers on behalf of enrollees, from sources other than
medicaid, state employee programs administered by the public
employees insurance agency and other federal programs for health
care items or services provided directly or indirectly by the
health maintenance organization: Provided, That this tax rate
limitation shall not extend to that part of the gross income of
health maintenance organizations which is received from the use
of real property other than property in which any such company
maintains its office or offices in this state, whether such
income is in the form of rentals or royalties. This provision
concerning the maximum municipal business and occupation tax rate
on the activities of health maintenance organizations is
effective beginning after the thirty-first day of December, one
thousand nine hundred ninety-six. Any payments of business and occupation tax made by a health maintenance organization to a
municipality for calendar year one thousand nine hundred ninety- seven shall not be subject to recovery by the health maintenance
organization. Administrative expenses shall include all
expenditures made by a health maintenance organization other than
expenses paid for claims incurred or payments made to providers
for the benefits received by enrollees.
(c) Effective date of local tax.
-- Any taxes levied
pursuant to the authority of this section may be made operative
as of the first day of the then current fiscal year or any date
thereafter: Provided,
That any new imposition of tax or any
increase in the rate of tax upon any business, occupation or
privilege taxed under section two-e of said article thirteen
shall apply only to gross income derived from contracts entered
into after the effective date of such imposition of tax or rate
increase, and which effective date shall not be retroactive in
any respect: Provided, however,
That no tax imposed or revised
under this section upon public utility services may be effective
unless and until the municipality provides written notice of the
same by certified mail to said public utility at least sixty days
prior to the effective date of said tax or revision thereof.
(d) Exemptions.
-- A municipality shall not impose its
business and occupation or privilege tax on any activity that was
exempt from the state's business and occupation tax under the
provisions of section three, article thirteen of said chapter
eleven, prior to July one, one thousand nine hundred eighty- seven, and determined without regard to any annual or monthly monetary exemption also specified therein.
(e) Activity in two or more municipalities.
-- Whenever the
business activity or occupation of the taxpayer is engaged in or
carried on in two or more municipalities of this state, the
amount of gross income, or gross proceeds of sales, taxable by
each municipality shall be determined in accordance with such
legislative regulations as the tax commissioner may prescribe.
It being the intent of the Legislature that multiple taxation of
the same gross income, or gross proceeds of sale, under the same
classification by two or more municipalities shall not be
allowed, and that gross income, or gross proceeds of sales,
derived from activity engaged in or carried on within this state,
that is presently subject to state tax under section two-c or
two-h, article thirteen, chapter eleven of this code, which is
not taxed or taxable by any other municipality of this state, may
be included in the measure of tax for any municipality in this
state, from which the activity was directed, or in the absence
thereof, the municipality in this state in which the principal
office of the taxpayer is located. Nothing in this subsection
shall be construed as permitting any municipality to tax gross
income or gross proceeds of sales in violation of the
constitution and laws of this state or the United States, or as
permitting a municipality to tax any activity that has a definite
situs outside its taxing jurisdiction.
(f) Where the governing body of a municipality imposes a tax
authorized by this section, such governing body shall have the
authority to offer tax credits from such tax as incentives for new and expanding businesses located within the corporate limits
of the municipality.
(g) Administrative provisions.
-- The ordinance of a
municipality imposing a business and occupation or privilege tax
shall provide procedures for the assessment and collection of
such tax, which shall be similar to those procedures in article
thirteen, chapter eleven of this code, as in existence on June
thirtieth, one thousand nine hundred seventy-eight, or to those
procedures in article ten, chapter eleven of this code, and shall
conform with such provisions as they relate to waiver of
penalties and additions to tax.