WEST VIRGINIA LEGISLATURE
2022 REGULAR SESSION
Introduced
House Bill 4567
By Delegates Steele, Foster, Householder, Criss, Kimes, Hanshaw (Mr. Speaker), Kessinger, Hardy, Barrett, Hott, and Ellington
[Introduced February 07, 2022; Referred to the Committee on the Finance]
A BILL to amend and reenact §8-13-5 of the Code of West Virginia, 1931, as amended, relating to business and occupation or privilege tax; prohibiting a municipality from imposing its business and occupation or privilege tax on any business activity or occupation when the basis of the tax is derived from products being shipped into or sold in the municipality, requiring that imposition of the municipal business and occupation or privilege tax on the business of selling automobiles is limited to used automobiles only, and stating that any sales proceeds from the sale of new automobiles that have never been registered in the name of an individual are exempt from the municipal business and occupation or privilege tax.
Be it enacted by the Legislature of West Virginia:
§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 §11-13-1 et seq. of this code, prior to July 1, 1987, 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 §11-13-2d and §11-13-2e of this code 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 13, on January 1,
1959 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 §11-13-2m of this code. 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 §33-25a-1 et seq. 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 §5-16-1 et seq. 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 December 31, 1996. Any payments of business and
occupation tax made by a health maintenance organization to a municipality for
calendar year 1997 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 §11-13-2e of this code 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 60 days prior to the effective date of said tax or revision thereof.
(d) Exemptions. – (1) 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 13 of said Chapter 11, prior to July 1, 1987, and determined without regard to any annual or monthly monetary exemption also specified therein: Provided, That on and after July 1, 2007, a municipality may impose its business and occupation or privilege tax on any activity of a corporation, association or society organized and operated exclusively for religious or charitable purposes that was exempt from the state's business and occupation tax under the provisions of §11-13-3 of this code, prior to July 1, 1987, but only to the extent that the income generated by the activity is subject to taxation under the provisions of section 511 of the Internal Revenue Code of 1986, as amended.
(2) Effective July 1, 2022, a municipality shall not impose its business and occupation or privilege tax on any business activity or occupation when the basis of the tax is derived from products being shipped into or sold in the municipality.
(3) Effective July 1, 2022, imposition of the municipal business and occupation or privilege tax on the business of selling automobiles is limited to used automobiles only; any sales proceeds from the sale of new automobiles that have never been registered in the name of an individual are exempt from the municipal business and occupation or privilege tax.
(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, is taxable
only by the municipality in which the business activity or occupation has its principal
place of business in this state. 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 §11-13-1 et seq. of this code, as in existence on June 30, 1978, or to those procedures in §11-10-1 et seq. of this code, and shall conform with such provisions as they relate to waiver of penalties and additions to tax.
NOTE: The purpose of this bill is to prohibit a municipality from imposing its business and occupation or privilege tax on any business activity or occupation when the basis of the tax is derived from products being shipped into or sold in the municipality, require that imposition of the municipal business and occupation or privilege tax on the business of selling automobiles is limited to used automobiles only, and state that any sales proceeds from the sale of new automobiles that have never been registered in the name of an individual are exempt from the municipal business and occupation or privilege tax.
Strike-throughs indicate language that would be stricken from a heading or the present law, and underscoring indicates new language that would be added.