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SB335 SUB1 Senate Bill 335 History

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Key: Green = existing Code. Red = new code to be enacted

WEST virginia legislature

2017 regular session

Committee Substitute

for

Senate Bill 335

By Senators Karnes, Carmichael (Mr. President), Mullins, Maynard, Weld, Clements, Ferns, Cline, Smith, Sypolt, Azinger, Swope, Blair, Gaunch, Takubo, Boso, Mann and Trump

[Originating in the Select Committee on Tax Reform; reported on March 16, 2017]

A BILL to amend and reenact §8-1-5a of the Code of West Virginia, 1931, as amended; to amend said code by adding thereto a new section, designated §8-13C-15; to amend said code by adding thereto two new sections, designated §11-13A-26 and §11-13A-27; to amend said code by adding thereto a new article, designated §11-13DD-1, §11-13DD-2, §11-13DD-3 and §11-13DD-4; to amend said code by adding thereto a new article, designated §11-13EE-1, §11-13EE-2, §11-13EE-3 and §11-13EE-4; to amend said code by adding thereto a new section, designated §11-15-34; to amend said code by adding thereto a new section, designated §11-15A-30; to amend said code by adding thereto a new article, designated §11-15C-1, §11-15C-2, §11-15C-3, §11-15C-4, §11-15C-5, §11-15C-6, §11-15C-7, §11-15C-8, §11-15C-9, §11-15C-10, §11-15C-11, §11-15C-12, §11-15C-13, §11-15C-14, §11-15C-15, §11-15C-16, §11-15C-17, §11-15C-18, §11-15C-19,  §11-15C-20, §11-15C-21,  §11-15C-22, §11-15C-23, §11-15C-24, §11-15C-25, §11-15C-26 and §11-15C-27; to amend and reenact §11-16-13 of said code; to amend and reenact §11-17-4b of said code; to amend and reenact §11-19-1 and §11-19-2 of said code; to amend said code by adding thereto a new section, designated §11-21-4g; to amend and reenact §11-21-8a of said code; to amend and reenact §11-21-12 of said code; to amend and reenact §11-24-4 of said code; to amend and reenact §11-24-23a of said code; and to amend and reenact §60-3A-17 of said code, all relating generally to creating the 2017 Tax Reform Act; preserving the municipal sales and use taxes; contingently reducing the rate of the severance tax on certain natural resource production;  prospectively balancing of the rate of the severance tax on the production of coal; providing a refundable credit based on the earned income of low-income workers; providing a refundable credit based on the fixed income of low-income senior citizens; prospectively repealing the consumers sales and service tax and the use tax; prospectively increasing the rates of tax on sales of non-intoxicating beer; prospectively repealing the excise tax on e-cigarette liquids; prospectively increasing the rate of tax on sales of soft drinks;  reducing, making uniform, contingently phasing down the rate of, and ultimately repealing, the personal income tax; prospectively increasing the personal income tax credit for qualified rehabilitated building investments; prospectively exempting from the personal income tax all social security retirement, survivors’ and disability income, and all retirement income for military service;  contingently phasing down the rate of, and ultimately repealing, the corporation net income tax; prospectively increasing the corporation net income tax credit for qualified rehabilitated building investments; prospectively increasing the state’s profits on wholesale liquor sales and enacting the revised sales, service and use tax law; making findings; defining terms; imposing the tax; authorizing exemptions; providing compliance procedures; dedicating portions of the revenue; and establishing effective dates with respect thereto.

Be it enacted by the Legislature of West Virginia:


That §8-1-5a of the Code of West Virginia, 1931, as amended, be amended and reenacted; that said code be amended by adding thereto a new section, designated §8-13C-15; that said code be amended by adding thereto two new sections, designated §11-13A-26 and §11-13A-27; that said code be amended by adding thereto a new article, designated §11-13DD-1, §11-13DD-2, §11-13DD-3 and §11-13DD-4; that said code be amended by adding thereto a new article, designated §11-13EE-1, §11-13EE-2, §11-13EE-3 and §11-13EE-4; that said code be amended by adding thereto a new section, designated §11-15-34; that said code be amended by adding thereto a new section, designated §11-15A-30; that said code be amended by adding thereto a new article, designated  §11-15C-1, §11-15C-2, §11-15C-3, §11-15C-4, §11-15C-5, §11-15C-6, §11-15C-7, §11-15C-8, §11-15C-9, §11-15C-10, §11-15C-11, §11-15C-12, §11-15C-13, §11-15C-14, §11-15C-15, §11-15C-16, §11-15C-17, §11-15C-18, §11-15C-19,  §11-15C-20, §11-15C-21,  §11-15C-22, §11-15C-23, §11-15C-24, §11-15C-25, §11-15C-26 and §11-15C-27; that §11-16-13 of said code be amended and reenacted; that §11-17-4b of said code be amended and reenacted; that §11-19-1 and §11-19-2 be amended and reenacted; that said code be amended by adding thereto a new section, designated §11-21-4g; that §11-21-8a of said code be amended and reenacted; that §11-21-12 of said code be amended and reenacted; that §11-24-4 of said code be amended and reenacted; that §11-24-23a of said code be amended and reenacted; and that §60-3A-17 of said code be amended and reenacted, all to read as follows:


CHAPTER 8. MUNICIPAL CORPORATIONS.

ARTICLE 1.  PURPOSE AND SHORT TITLE; DEFINITIONS; GENERAL PROVISIONS;  CONSTRUCTION.

§8-1-5a. Municipal Home Rule Pilot Program.

(a) Legislative findings. -- The Legislature finds and declares that:

(1) The initial Municipal Home Rule Pilot Program brought innovative results, including novel municipal ideas that became municipal ordinances which later resulted in new statewide statutes;

(2) The initial Municipal Home Rule Pilot Program also brought novel municipal ideas that resulted in court challenges against some of the participating municipalities;

(3) The Municipal Home Rule Board was an essential part of the initial Municipal Home Rule Pilot Program, but it lacked some needed powers and duties;

(4) Municipalities still face challenges delivering services required by federal and state law or demanded by their constituents;

(5) Municipalities are sometimes restrained by state statutes, policies and rules that challenge their ability to carry out their duties and responsibilities in a cost-effective, efficient and timely manner;

(6) Continuing the Municipal Home Rule Pilot Program is in the public interest; and

(7) Increasing the powers and duties of the Municipal Home Rule Board will enhance the Municipal Home Rule Pilot Program.

(b) Continuance of pilot program. -- The Municipal Home Rule Pilot Program is continued until July 1, 2019. The ordinances enacted by the participating municipalities pursuant to the l Municipal Home Rule Pilot Program may remain in effect, subject to the requirements of this section, until the ordinances are repealed: Provided, That any ordinance enacting a municipal occupation tax is hereby null and void.

(c) Authorizing participation. --

(1) Commencing July 1, 2015, thirty Class I, Class II and Class III municipalities and four Class IV municipalities that are current in payment of all state fees may participate in the Municipal Home Rule Pilot Program pursuant to the provisions of this section.

(2) The municipalities participating in the pilot program on the effective date of the amendment and reenactment of this section are hereby authorized to continue in the pilot program, subject to the requirements of this section, and may amend current written plans and/or submit new written plans in accordance with the provisions of this section.

(d) Municipal Home Rule Board. -- The Municipal Home Rule Board is hereby continued. Effective July 1, 2015, the Municipal Home Rule Board shall consist of the following five voting members:

(1) The Governor, or a designee, who shall serve as chair;

(2) The Executive Director of the West Virginia Development Office, or a designee;

(3) One member representing the Business and Industry Council, appointed by the Governor with the advice and consent of the Senate;

(4) One member representing the largest labor organization in the state, appointed by the Governor with the advice and consent of the Senate; and

(5) One member representing the West Virginia Chapter of the American Institute of Certified Planners, appointed by the Governor with the advice and consent of the Senate.

The Chair of the Senate Committee on Government Organization and the Chair of the House Committee on Government Organization shall continue to be ex officio nonvoting members of the board.

(e) Board's powers and duties. -- The Municipal Home Rule Board has the following powers and duties:

(1) Review, evaluate, make recommendations and approve or reject, by a majority vote of the board, each aspect of the written plan submitted by a municipality;

(2) By a majority vote of the board, select, based on the municipality's written plan, new Class I, Class II, Class III and/or Class IV municipalities to participate in the Municipal Home Rule Pilot Program;

(3) Review, evaluate, make recommendations and approve or reject, by a majority vote of the board, the amendments to the written plans submitted by municipalities;

(4) Consult with any agency affected by the written plans or the amendments to the written plans; and

(5) Perform any other powers or duties necessary to effectuate the provisions of this section.

(f) Written plan. -- Any Class I, Class II, Class III or Class IV municipality desiring to participate in the Municipal Home Rule Pilot Program shall submit a written plan to the board stating in detail the following:

(1) The specific laws, acts, resolutions, policies, rules or regulations which prevent the municipality from carrying out its duties in the most cost-efficient, effective and timely manner;   

(2) The problems created by the laws, acts, resolutions, policies, rules or regulations;

(3) The proposed solutions to the problems, including all proposed changes to ordinances, acts, resolutions, rules and regulations: Provided, That the specific municipal ordinance instituting the solution does not have to be included in the written plan; and

(4) A written opinion, by an attorney licensed to practice in West Virginia, stating that the proposed written plan does not violate the provisions of this section.

(g) Public hearing on written plan. -- Prior to submitting its written plan to the board, the municipality shall:

(1) Hold a public hearing on the written plan;

(2) Provide notice at least thirty days prior to the public hearing by a Class II legal advertisement;

(3) Make a copy of the written plan available for public inspection at least thirty days prior to the public hearing; and

(4) After the public hearing, adopt an ordinance authorizing the municipality to submit a written plan to the Municipal Home Rule Board after the proposed ordinance has been read two times.

(h) Selection of municipalities. -- On or after June 1, 2015, by a majority vote, the Municipal Home Rule Board may select from the municipalities that submitted written plans and were approved by the board by majority vote, new Class I, Class II, Class III and/or Class IV municipalities to participate in the Municipal Home Rule Pilot Program.

(i) Powers and duties of municipalities. -- The municipalities participating in the Municipal Home Rule Pilot Program have the authority to pass an ordinance, act, resolution, rule or regulation, under the provisions of this section, that is not contrary to:

(1) Environmental law;

(2) Laws governing bidding on government construction and other contracts;

(3) The Freedom of Information Act;

(4) The Open Governmental Proceedings Act;

(5) Laws governing wages for construction of public improvements;

(6) The provisions of this section;

(7) The provisions of section five-a, article twelve of this chapter;

(8) The municipality's written plan;

(9) The Constitution of the United States or the Constitution of the state of West Virginia;

(10) Federal law or crimes and punishment;

(11) Chapters sixty-a, sixty-one and sixty-two of this code or state crimes and punishment;

(12) Laws governing pensions or retirement plans;

(13) Laws governing annexation;

(14) Laws governing taxation: Provided, That a participating municipality may enact a municipal sales tax up to one percent if it reduces or eliminates its municipal business and occupation tax: Provided, however, That if a municipality subsequently reinstates or raises the municipal business and occupation tax it previously reduced or eliminated under the Municipal Home Rule Pilot Program, it shall eliminate the municipal sales tax enacted under the Municipal Home Rule Pilot Program:  Provided further, That, for periods prior to October 1, 2017, any municipality that imposes a municipal sales tax pursuant to this section shall use the services of the Tax Commissioner to administer, enforce and collect the tax in the same manner as the state consumers sales and service tax and use tax under the provisions of articles fifteen, fifteen-a and fifteen-b, chapter eleven of this code and all applicable provisions of the Streamlined Sales and Use Tax Agreement: And provided further, That on and after October 1, 2017, any municipality that imposes a municipal sales tax pursuant to this section, shall use the services of the Tax Commissioner to administer, enforce and collect the tax in the same manner as the revised sales, service and use tax, including use of the same definitions, base of tax and exemptions,  as provided in articles fifteen-b and fifteen-c, chapter eleven of this code and in all applicable provisions of the Streamlined Sales and Use Tax Agreement: And provided further, That such municipal tax will not apply to the sale of motor fuel or motor vehicles;

(15) Laws governing tax increment financing;

(16) Laws governing extraction of natural resources; and

(17) Marriage and divorce laws.

(j) Municipalities may not pass an ordinance, act, resolution, rule or regulation under the provisions of this section that:

(1) Affects persons or property outside the boundaries of the municipality: Provided, That this prohibition under the Municipal Home Rule Pilot Program does not limit a municipality's powers outside its boundary lines under other provisions of this section, other sections of this chapter, other chapters of this code or court decisions; or

(2) Enacts an occupation tax, fee or assessment payable by a nonresident of a municipality.

(k) Amendments to written plans. -- A municipality participating in the Municipal Home Rule Pilot Program may amend its written plan at any time.

(l) Amendments to ordinances, acts, resolutions, rules or regulations. -- A municipality participating in the Municipal Home Rule Pilot Program may amend any ordinance, act, resolution, rule or regulation enacted pursuant to the municipality's approved written plan at any time so long as any amendment is consistent with the municipality's approved written plan, complies with the provisions of subsections (i) and (j) of this section, and the municipality complies with all applicable state law procedures for enacting municipal legislation.

(m) Reporting requirements. -- Commencing December 1, 2015, and each year thereafter, each participating municipality shall give a progress report to the Municipal Home Rule Board and commencing January 1, 2016, and each year thereafter, the Municipal Home Rule Board shall give a summary report of all the participating municipalities to the Joint Committee on Government and Finance.

(n) Termination of the pilot program. -- The Municipal Home Rule Pilot Program terminates on July 1, 2019. An ordinance, act, resolution, rule or regulation enacted by a participating municipality under the provisions of this section during the period of the Municipal Home Rule Pilot Program shall continue in full force and effect until repealed.

(o) Notwithstanding any other provision of this code to the contrary, on and after the effective date of the enactment of this provision in 2015, no distributee under the provisions of this section may seek from the Tax Division of the Department of Revenue a refund of revenues or moneys collected by, or remitted to, the Tax Division of the Department of Revenue, nor seek a change in past amounts distributed, or any other retrospective adjustment relating to any amount distributed, to the extent that the moneys in question have been distributed to another distributee, regardless of whether those distributions were miscalculated, mistaken, erroneous, misdirected or otherwise inaccurate or incorrect. For purposes of this section, the term "distributee" means any municipality that receives or is authorized to receive a specific distribution of revenues or moneys collected by, or remitted to, the Tax Division of the Department of Revenue pursuant to this section.

ARTICLE 13c.  MUNICIPAL TAX IN LIEU OF BUSINESS AND OCCUPATION TAX; AND MUNICIPAL TAXES APPLICABLE TO PENSION FUNDS; ADDITIONAL AUTHORITIES RELATING TO PENSIONS AND BOND ISSUANCE.


§8-13C-15.  Municipal sales and service tax and municipal use tax preserved upon enactment of the revised sales, service and use tax.

On and after October 1, 2017, any municipality that, before that date, imposed a municipal sales and service  tax  and a municipal use tax pursuant to this article, shall have the authority to  continue such taxes: Provided, that, as a condition to continuing such tax, the municipality shall use the services of the Tax Commissioner to administer, enforce and collect the said taxes in the same manner as the revised sales, service and use tax, including use of the same definitions, base of tax and exemptions, as provided in articles fifteen-b and fifteen-c, chapter eleven of this code and in all applicable provisions of the Streamlined Sales and Use Tax Agreement.

CHAPTER 11.  TAXATION

ARTICLE 13A.   sEVERANCE AND bUSINESS PRIVILEGE TAX.

§11-13A-26.  Contingent reduction of tax rate on production of certain natural resources.


Notwithstanding anything contained in this article to the contrary, for all tax periods beginning on and after January 1, 2018, the tax imposed under this article in the year 2017, on the production of all natural resources except coal, at the rate of five percent, shall be reduced by one percentage point for each of two successive years;  Provided, That as a condition precedent to each such reduction in any tax year, the rate of the corporation net income tax imposed pursuant to article twenty-four of this chapter, for the tax year immediately preceding such year, shall be zero percent.


§11-13A-27.  Prospective balancing of tax rate on coal production.

(a) Notwithstanding anything contained in this article to the contrary, the tax on the production of coal under section three of this article shall, from the effective date of this section, be imposed at the following rates:

(1) For coal mined by underground methods from seams with an average thickness of less than forty-five inches, two and one half percent of the gross value of the coal produced, as shown by the gross income derived from the sale thereof by the producer on or after July 1, 2017.  The seam thickness shall be based on the weighted average isopach mapping of actual coal thickness by mine as certified by a professional engineer;

(2) For all other coal production subject to the tax imposed under section three of this article,

(A) Three and three-quarters percent of the gross value of the coal produced, as shown by the gross income derived from the sale or furnishing thereof by the producer for the period from July 1, 2017 through June 30, 2018; and

(B) Two and one-half percent of the gross value of the coal produced, as shown by the gross income derived from the sale or furnishing thereof by the producer for periods starting on or after July 1, 2018.

(3) In the case of all coal production, the applicable rate of tax includes the thirty-five one hundredths of one percent additional severance tax on coal imposed by the state for the benefit of counties and municipalities as provided in section six of this article.

(b) Effective date. – Notwithstanding any other sections of this article, this section shall apply to gross proceeds derived from the production of coal beginning on July 1, 2017. The language of section three of this article, as in effect on the passage of the bill enacting this section in the year 2017, shall apply to gross proceeds derived from the production of coal prior to July 1, 2017, and, with respect to such gross proceeds, shall be fully and completely preserved.

ARTICLE 13DD.  EARNED INCOME CREDIT.

§11-13DD-1.  Earned income credit for low income workers.


 For the tax years beginning on or after the first day of January of the first year following the year in which the voters ratify the Fair and Simple Tax Reform  Amendment to the constitution of this state,  any resident of this state who is a low income worker, and who has reported earned income on his or her federal income tax return for that year of more than one thousand dollars but less than twenty thousand dollars, shall be allowed a credit equal to the adjusted credit amount determined in this article.

§11-13DD-2.  Procedure for claiming credit; Limitation of amount paid.


(a) The credit available under this article shall be claimed each year, and payment of the same requested by a low-income worker, by filing, within ninety days following the filing of his or her federal income tax return for the year, a claim for credit on forms furnished by the state Tax Commissioner who shall process a requisition for remittance by the State Treasurer, from the State Maintenance of Efforts Fund dedicated to the Temporary Assistance of Needy Families program, of the correct amounts of credit shown on properly completed and filed claims, within the same time and according to the same procedures, including the payment of applicable interest, as provided in §11-10-14c of this code for refunds of personal income tax.

(b) No person may receive a credit pursuant to this section in excess of $200: Provided, That any person entitled to the credit against personal income tax authorized in section twenty-two of article twenty-one of this chapter, may also receive the credit authorized by this article.   The maximum amount of the credit authorized by this article shall be reviewed annually by the Legislature to determine if an adjustment is necessary.

(c) Due to the administrative cost of processing, the credit authorized by this section may not be paid if the amount of the credit is determined to be less than $10.

§11-13DD-3.  Definitions.


(a) For the purposes of this article, the term “adjusted credit amount” shall mean the amount which is equal to ten percent of the amount of credit the person is allowed to claim as an earned income tax credit against federal income tax pursuant to 26 U.S.C. §32, but reduced by four percent of that amount for every one percentage point by which such person’s adjusted gross income exceeds one hundred twenty-five percent of the federal poverty guideline applicable to such person as provided in this section.

(b)  For the purposes of this article, the terms “adjusted gross income” and "earned income” shall have the meaning of those terms used in the Internal Revenue Code.

(c) For the purposes of this article, the term "low income" means federal adjusted gross income for the tax year that is one hundred fifty percent or less of the federal poverty guideline for the year, based upon the number of individuals in the family unit of which the low income worker is a member, all as determined annually by the United States Secretary of Health and Human Services.

(d) For the purposes of this article, the term "low income worker" means a resident of this state whose federal adjusted gross income for the tax year meets the definition of "low income" as defined in this section, and who has reported earned income on his or her federal income tax return for that year:  Provided, That for all purposes of this article, the term “low income worker” shall also mean and include, as one person, those individuals who file joint federal income tax returns with their spouses.

§11-13DD-4.  Effective date.


This article shall take effect on the first day of January of the first year after the year in which the voters ratify the Fair and Simple Tax Reform Amendment to the constitution of this state.

ARTICLE 13EE.  FIXED INCOME CREDIT.

§11-13EE-1 Fixed income credit for low income senior citizens.


For the tax years beginning on or after the first day of January of the first year following the year in which the voters ratify the  Fair and Simple Tax Reform Amendment to the constitution of this state,  any resident of this state who is a low income senior citizen, and who has reported fixed income on his or her federal income tax return for that year of more than one thousand dollars but less than twenty thousand dollars shall be allowed a credit equal to the adjusted credit amount determined in this article.

§11-13EE-2.  Procedure for claiming credit; Limitation of amount paid.


(a) The credit available under this article may be claimed each year, and payment of the same requested by a low-income senior citizen, by filing, within ninety days following the filing of his or her federal income tax return for the year, a claim for credit on forms furnished by the state Tax Commissioner who shall process a requisition for remittance by the State Treasurer of the correct amounts of credit shown on properly completed and filed claims within the same time and according to the same procedures, including the payment of applicable interest, as provided in §11-10-14c of this code for refunds of personal income tax.

(b) No person may receive a credit pursuant to this section in excess of $200: Provided, That any person entitled to the credit against personal income tax authorized in section twenty-two of article twenty-one of this chapter, may also receive the credit authorized by this article.   The maximum amount of the credit authorized by this article shall be reviewed annually by the Legislature to determine if an adjustment is necessary.

(c) Due to the administrative cost of processing, the credit authorized by this section may not be paid if the amount of the credit is determined to be less than $10.

§11-13EE-3.  Definitions.


(a) For the purposes of this article, the term “adjusted credit amount” shall mean the amount which is equal to one percent of the person’s fixed income reported on his or her federal income tax return for the year, reduced by four percent of that amount for every one percentage point by which such person’s adjusted gross income exceeds one hundred twenty-five percent of the federal poverty guideline applicable to such person as provided in this section.

(b)  For the purposes of this article, the term “adjusted gross income” shall have the meaning of that term used in the Internal Revenue Code.

(c) For the purposes of this article, the term “fixed income” shall mean any income reported by the credit applicant on his or her federal income tax return, which is not “earned income” as that term is used in the Internal Revenue Code.

(d) For the purposes of this article, the term "low income" means federal adjusted gross income for the tax year that is one hundred fifty percent or less of the federal poverty guideline, based upon the number of individuals in the family unit of which the low income senior citizen is a member, all as determined annually by the United States Secretary of Health and Human Services.

(e) For the purposes of this article, the term "low income senior citizen" means a resident of this state whose federal adjusted gross income for the tax year meets the definition of "low income" as defined in this section, and who has attained the age of sixty-five years: Provided, That for all purposes of this article, the term “low income senior citizen” shall also mean and include, as one person, those individuals who file joint federal income tax returns with their spouses, whether one or both such spouses is a low income senior citizen, and whether either or both spouses have attained the age of sixty-five years and have fixed income.

§11-13EE-4.  Effective date.


This article shall take effect on the first day of January of the first year after the year in which the voters ratify the Fair and Simple Tax Reform Amendment to the constitution of this state.

ARTICLE 15.  CONSUMERS SALES AND SERVICE TAX.

§11-15-34. Prospective termination of tax, preservation for prior periods.


Each and every provision of this article is repealed beginning on October 1, 2017: Provided, That tax liabilities, if any, arising prior to October 1, 2017, shall be determined, administered, assessed and collected as if the taxes imposed by this article had not been repealed; and the rights and duties of taxpayers and the state shall be fully and completely preserved:  Provided, further, That provisions for dedication of the proceeds of the tax imposed by this article, if any, arising prior to October 1, 2017, shall be administered, applied and executed as if the taxes imposed by this article had not been repealed; and the interests and duties of all affected parties shall be fully and completely preserved.

ARTICLE 15A.  USE TAX.

§11-15A-30.    Prospective termination of tax, preservation for prior periods.


Each and every provision of this article is repealed beginning on October 1, 2017:  Provided, That tax liabilities, if any, arising prior to October 1, 2017, shall be determined, administered, assessed and collected as if the taxes imposed by this article had not been repealed; and the rights and duties of taxpayers and the state shall be fully and completely preserved.

ARTICLE 15C.  REVISED SALES, SERVICE AND USE TAX.

§11-15C-1. Short title.


This article is known and may be cited as the “Revised Sales, Service and Use Tax Law.”

§11-15C-2. Legislative findings and declaration of purpose.


(1) The Legislature finds that all vendors, purchasers and other persons, regardless of their means, benefit from the availability of goods and services in the marketplaces of this state and from the use of goods and services in this state.

(2) The Legislature further finds that the functions of state government foster and protect those marketplaces and uses, and, as a result, all vendors, purchasers and other persons who avail themselves of those benefits should provide financial support for those functions of state government through a broad-based tax in the form of a sales, service and use tax on the selling, purchasing and using of goods and services in this state.

(3) The Legislature further finds that, in the free enterprise system, the best judge of a purchaser’s ability to pay for the purchase of goods and services is the purchaser, and, thus, a broad-based sales, service and use tax is firmly based on that principle of sound and fair taxation.

(4) The Legislature further finds that such a tax may readily be structured to enhance the economic competitiveness of the state’s economy among the economies of other states and nations.

(5) The Legislature further finds that the only exceptions to such a broad-based sales, service and use tax should be those which mitigate its potential either for pyramiding tax incidences or for complicating its administration with respect to governmental purchases, purchases for charitable, educational and public safety purposes that relieve the burdens of government and purchases of goods and services by individuals for health care which are predominately paid or reimbursed by third parties including the government.

(6) The Legislature further finds that the sales, service and use tax imposed by this article shall also be administered and collected in accordance with the provisions of article 15-b of this chapter.

(7) The Legislature does therefore declare that the purpose of this article shall be to impose a broad-based sales, service and use tax for the privilege of selling, purchasing and using goods and services in this state, and it shall be construed so as to give effect to the findings in this section.

§11-15C-3. Definitions of terms.


When used in this article, the words defined in this section have the meanings ascribed to them herein, except in those instances where a different meaning is provided in this article or the context in which the word is used clearly indicates a different meaning is intended by the Legislature.

(a) Agricultural production. – The term “agricultural production” means the production of food, fiber and woodland products by means of cultivation, tillage of the soil and the conduct of animal, livestock, dairy, apiary, equine or poultry husbandry, horticulture, or any other plant or animal production and all farm practices usually or incidentally related thereto, including the storage, packing, shipping and marketing, but not including any manufacturing, milling or processing of such products by persons other than the original producer thereof.

(b) Business. – The term “business” includes all activities engaged in or caused to be engaged in, with the object of gain or economic benefit, direct or indirect, and all activities of the state and its political subdivisions which involve sales of tangible personal property or the rendering of services when those sales or services compete with or may compete with the activities of other non-governmental persons.

(c) Communications – The term "communications" means all telephone, radio, light, light wave, radio telephone, telegraph and other communication or means of communication, whether used for voice communication, computer data transmission or other encoded symbolic information transfers and includes commercial broadcast radio, commercial broadcast television and cable television.

(d) Contracting. – The term "contracting" means and includes the business or furnishing of work, or both materials and work, for another (by a sole contractor, general contractor, prime contractor, subcontractor or construction manager) in fulfillment of a contract for the construction, alteration, repair, decoration or improvement of a new or existing building or structure, or any part thereof, or for removal or demolition of a building or structure, or any part thereof, or for the other alteration, improvement or development of real property.

(e) Delegate. – The term “delegate” in the phrase “his or her delegate,” when used in reference to the Tax Commissioner, means any officer or employee of the state tax division of the department of tax and revenue duly authorized by the Tax Commissioner directly, or indirectly by one or more re-delegations of authority, to perform functions mentioned or described in this article or regulations promulgated thereunder.

(f) Directly used or consumed. –

(1) General. –  The term “directly used or consumed” in the activities of manufacturing, natural resource production and agricultural production means used or consumed in those activities or operations which constitute an integral and essential part of one of those activities, as contrasted with and distinguished from those activities or operations which are simply incidental, convenient or remote to one of those activities.

(2) Uses of tangible or intangible property which constitutes direct use or consumption of the property in the activities of manufacturing, natural resource production or agricultural production includes only uses for the immediate purpose of:

(A) Physical incorporation of property into a finished product resulting from manufacturing, natural resource production or agricultural production;

(B) Causing a direct physical, chemical or other change upon property undergoing manufacturing, natural resource production or agricultural production;

(C) Transporting or storing property undergoing manufacturing, natural resource production or agricultural production;

(D) Measuring or verifying a change in property directly used in manufacturing, natural resource production or agricultural production;

(E) Physically controlling or directing the physical movement or operation of property directly used in manufacturing, natural resource production or agricultural production;

(F)  Directly and physically recording the flow of property undergoing manufacturing, natural resource production or agricultural production;

(G) Producing energy for property directly used in manufacturing, natural resource production or agricultural production;

(H)  Facilitating the transmission of gas, water, steam or electricity from the point of their diversion to property directly used in manufacturing, natural resource production or agricultural production;

(I) Controlling or otherwise regulating atmospheric conditions required for manufacturing, natural resource production or agricultural production;

(J) Serving as an operating supply for property undergoing manufacturing, natural resource production or agricultural production, or for property directly used in manufacturing, natural resource production or agricultural production;

(K)  Maintenance or repair of property, including maintenance equipment, directly used in manufacturing, natural resource production or agricultural production;

(L) Storage, removal or transportation of economic waste resulting from the activities of manufacturing, natural resource production or agricultural production;

(M) Pollution control or environmental quality or protection activity directly relating to the activities of manufacturing, natural resource production or agricultural production and personnel, plant, product or community safety or security activity directly relating to the activities of manufacturing, natural resource production or agricultural production; or

(N) Otherwise used as an integral and essential part of manufacturing, natural resource production or agricultural production.

(3) Uses of tangible or intangible property which do not constitute direct use or consumption in the activities of manufacturing, natural resource production or agricultural production include, but are not limited to:

(A) Heating and illumination of office buildings;

(B) Janitorial or general cleaning activities;

(C) Personal comfort of personnel;

(D) Production planning, scheduling of work or inventory control;

(E) Marketing, general management, supervision, finance, training, accounting and administration; or

(F) An activity or function merely incidental or convenient to manufacturing, natural resource production or agricultural production, rather than uses which are an integral and essential part of those production activities.

(g) Electronic data processing services – The term "electronic data processing services" means the processing of another's data, including all processes incident to processing of data such as keypunching, keystroke verification, rearranging or sorting of previously documented data for the purpose of data entry or automatic processing and changing the medium on which data is sorted, whether these processes are done by the same person or several persons; and providing access to computer equipment for the purpose of processing data or examining or acquiring data stored in or accessible to the computer equipment;

(h) Generation or production of electric power. – The term “generation of electric power” means the generation and production of electric power engaged in by persons who were subject to the business and occupation tax imposed in article thirteen of this chapter.

(i) Gross proceeds. – The term “gross proceeds” means the amount received in money, credits, property or other consideration from sales and services within this state, without deduction on account of the cost of property sold, amounts paid for interest or discounts or other expenses whatsoever. Losses may not be deducted, but any credit or refund made for goods returned may be deducted.

(j) Includes and including. - The terms “includes” and “including,” when used in a definition contained in this article, does not exclude other things within the meaning of the term being defined.

(k) Licensed health care services. – The term “licensed health care services” means those services for which a person is licensed by this state to act as a health care provider as defined in section three, article twenty-six of this chapter, as in effect on June 1,1991.

(l) Manufacturing. –  The term “manufacturing” means a systematic operation or integrated series of systematic operations engaged in as a business or segment of a business, including the generation of electric power, which transforms or converts tangible personal property by physical, chemical or other means into a different form, composition or character from that in which it originally existed.

(m) Natural resource production. – The term  ”natural resource production” means, except for oil and gas, the performance, by either the owner of the natural resources or another, of the act or process of exploring, developing, severing, extracting, reducing to possession and loading for shipment, and shipment for sale, profit or commercial use of any natural resource products and any reclamation, waste disposal or environmental activities associated therewith and the construction, installation or fabrication of ventilation structures, mine shafts, slopes, boreholes, dewatering structures, including associated facilities and apparatus, by the producer or others, including contractors and subcontractors, at a coal mine or coal production facility. For the natural resources oil and gas, “natural resource production” means the performance, by either the owner of the natural resources, a contractor or a subcontractor, of the act or process of exploring, developing, drilling, well-stimulation activities such as logging, perforating or fracturing, well-completion activities such as the installation of the casing, tubing and other machinery and equipment and any reclamation, waste disposal or environmental activities associated therewith, including the installation of the gathering system or other pipeline to transport the oil and gas produced or environmental activities associated therewith and any service work performed on the well or well site after production of the well has initially commenced. All work performed to install or maintain facilities up to the point of sale for severance tax purposes would be included in the term “natural resources production” and subject to the direct use concept. “Natural resource production” includes the performance or furnishing of work, or materials or work, in fulfillment of a contract for the construction, alteration, repair, decoration or improvement of a new or existing building or structure, or any part thereof, or for the alteration, improvement or development of real property, by persons other than those otherwise directly engaged in the activities specifically set forth in this subsection as “natural resource production.”

(n)  Sale, sales or selling. – The terms “sale”, “sales” or “selling” means and includes any transfer of the possession or ownership of tangible personal property for a consideration, including a lease or rental, when the transfer or delivery is made in the ordinary course of the transferor’s business and is made to the transferee or his or her agent for consumption or use or any other purpose. Unless the context provides otherwise, the terms “sale”, “sales” and selling shall also mean the rendering of a service for a charge. Notwithstanding anything to the contrary in this code, “sale” also includes the furnishing of prepaid wireless calling services for consideration.

(o)  Service and selected service. – The terms ”service” and “selected service” include all 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 shall not include the services rendered by an employee to his or her employer or services rendered by any business if ninety percent of its revenues are received from the regulated activities of extending credit, holding deposits of funds or acting as a financial intermediary or advisor in the transfer of interests in intangible personal property.

(p)  Streamlined Sales and Use Tax Agreement. - The term “Streamlined Sales and Use Tax Agreement” or “agreement,” when used in this article, has the same meaning as when used in article fifteen-b of this chapter, except when the context, in which the word “agreement” is used, clearly indicates that a different meaning is intended by the Legislature.

(q)  Tax. – The term “tax” means the revised sales, service and use tax imposed in this article.

(r) Tax commissioner or commissioner. – The terms “Tax Commissioner” or “commissioner” are used interchangeably herein and mean the Tax Commissioner of the state of West Virginia, or his or her delegate.

(s) Taxpayer. – The term “taxpayer” means any person liable for the tax imposed by this article.

(t) Temporarily used in this state. – The phrase “temporarily used in this state” means a use made while passing through this state in a relatively uninterrupted manner and not intended with reference to any specific location within this state.

(u) Transmission – The term "transmission" means the act or process of causing liquid, natural gas or electricity to pass or be conveyed from one place or geographical location to another place or geographical location through a pipeline or other medium for commercial purposes.

(v) Transportation – The term "transportation" means the act or process of conveying, as a commercial enterprise, passengers or goods from one place or geographical location to another place or geographical location.

(w) Use. – The term “use” means and includes the exercise of any person of any right or power over tangible personal property incident to the ownership, possession or enjoyment of such property, or by any transaction in which possession of or the exercise of any right or power over tangible personal property is acquired for a consideration, including a lease, rental or conditional sale of tangible personal property. As used in this definition, the term “enjoyment” includes a person’s right to direct the disposition of the property, whether or not the person has possession of the property. The term “use” does not include the keeping, retaining or exercising of any right or power over tangible personal property for the purpose of subsequently transporting it outside this state for use thereafter solely outside this state.  Proof that tangible personal property was sold for delivery in this state shall be prima facie evidence that such property was purchased for use in this state.  With respect to services, the term “use” means and includes the direct receipt and active application of the results and benefits of services.

(x) Vendor. – The term “vendor” means any person engaged in this state in businesses of furnishing services taxed by this article or making sales of, or leasing, tangible personal property or custom software taxed by this article.  “Vendor” and “seller” are used interchangeably in this article.

(y) Other terms used in this article are defined in article ten and article fifteen-b 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.

§11-15C-4. Imposition of revised sales, service and use tax; debt owed to this state; allocation of obligations for charging, paying, collecting and remitting tax; rate of tax.


(a) Imposition of tax. –  A revised sales, service and use tax is hereby imposed on the vendor for the privilege of selling tangible personal property and of rendering services in this state and on the purchaser for the privilege of using tangible personal property and services in this state. The tax due to be remitted or paid under this article shall, until fully remitted or paid, constitute a debt owed by the taxpayer to this state.

(b) Allocation of obligations for charging, paying, collecting and remitting the tax. – It is the intent of this article that the tax imposed herein shall be passed on by the vendor to, and shall be paid by, the purchaser, in accordance with the following allocation of obligations:

(1) Vendor obligations. –

(A) General. –  The vendor shall charge the purchaser for the tax, shall collect the tax from the purchaser, and shall remit the tax to the Tax Commissioner all as provided in this article.  The tax shall be added to and constitute a part of the sales price, and shall be collectible as such by the vendor who shall account to the Tax Commissioner for all tax paid by the purchaser.

(B) Tax kept separate from gross proceeds of sale. –  The vendor shall keep the amount of tax paid separate from the gross proceeds of sale exclusive of the tax unless authorized in writing by the Tax Commissioner to keep such amount of tax in a different manner. Where such authorization is given, the state’s claim shall be enforceable against and shall take precedence over all other claims against the moneys commingled.

(C) Nonresident vendors. – Every vendor engaging in business anywhere and making sales of tangible personal property for delivery into this state, or with the knowledge, directly or indirectly, that the property or services he, she or it are rendering are intended for use in this state, that are not exempted under the provisions of section nine of this article, shall at the time of making such sales or rendering such services, whether within or without the state, collect the tax imposed by this article from the purchaser, and give to the purchaser a receipt therefor in the manner and form prescribed by the Tax Commissioner, if the Tax Commissioner shall, by regulation, so prescribe.

Each such vendor shall list with the Tax Commissioner the name and address of all his, her or its agents operating in this state, and the location of any and all distribution or sales houses or offices or other places of business in this state.  Any person required to collect the revised sales, service and use tax under the provisions of this subdivision shall be required to obtain a business registration certificate, as provided in article twelve of this chapter, unless the person does not have sufficient presence in this state so that such registration would violate any provision of the constitution or laws of this state or of the United States.

The Tax Commissioner may, in his or her discretion, upon application authorize the collection of the tax herein imposed by any person not engaging in business within this state, who, to the satisfaction of the Tax Commissioner, furnishes adequate security to insure collection and payment of the tax.  Such person shall be issued, without charge, a permit to collect such tax in such manner, and subject to such regulations and agreements as the Tax Commissioner shall prescribe.  When so authorized, it shall be the duty of such person to collect the applicable tax, if any, upon all tangible personal property and services sold to his, her or its knowledge for use within this state, in the same manner and subject to the same requirements as a vendor engaging in business within this state.  Such authority and permit may be cancelled when, at any time, the Tax Commissioner considers the security inadequate, or that such tax can more effectively be collected from the person using such property in this state.

(D) Failure to collect and remit. – If any vendor required to collect and remit the tax to the Tax Commissioner fails to do so, he, she or it shall be personally liable for such amount as he, she or it  failed to collect and remit: Provided, That except where the transaction is shown to be exempt from tax under section nine of this article or is subject to the provisions of section eleven of this article, when a purchaser fails to pay the tax to the vendor, the vendor may avoid such liability by reporting to the Tax Commissioner, in writing with the return due to be filed for that same period,  the fact of such failure and the purchaser’s name, address and such other information as the Tax Commissioner may require.

(E) Absorbing tax. – It shall be unlawful for any vendor to advertise or hold out or state to the public or to any purchaser, consumer or user, directly or indirectly, that the tax or any part thereof imposed by this article will be assumed or absorbed by the vendor or that it will not be added to the price of the property sold or service rendered, or if added that it or any part thereof will be refunded.  The Tax Commissioner shall have the power to adopt and promulgate rules and regulations for adding such tax, or the equivalent thereof, by providing different methods applying uniformly to vendors within the same general classification for the purpose of enabling such vendors to add and collect, as far as practicable, the amount of such tax.

(2) Purchaser obligations. – Any person who uses any tangible personal property or service in this state upon which the tax imposed by this article has not been paid to a vendor or directly to the Tax Commissioner, is, unless the purchase or use of the property or service is exempt pursuant to this article, liable for the amount of such tax.  If any purchaser does not pay to the vendor the tax imposed by this section, or, in the case of a sale made exempt from the tax, a purchaser fails to present to the vendor an adequate written certification of the fact of, and basis by which,  the sale is not subject to this tax, or if the purchaser signs or presents to the vendor a false certificate, or after signing and presenting a proper certificate uses the items purchased in such manner that the sale would be subject to the tax, the purchaser shall be directly liable for the amount of tax applicable to the transaction or transactions: Provided, That nothing herein relieves any purchaser who owes the tax and who has not paid the tax from liability therefor.  In such cases the Tax Commissioner may make an assessment against such purchaser, based upon any information within his or her possession or that may come into his or her possession. The assessment and notice thereof shall be made and given in accordance with the provisions of article ten of this chapter.

(3) Joint and separate liability. –   Unless and until the tax due has been remitted by the vendor or paid by the purchaser to the Tax Commissioner, both the vendor and the purchaser shall remain liable for the tax except as otherwise provided in this article: Provided, That the tax imposed on a particular sale or use shall only be collected once by the Tax Commissioner.

(c) Rate of tax. –  Beginning on the effective date of this article, the revised sales, service and use tax imposed herein shall be at the rate of eight cents on each dollar of sales or services: Provided, That:

(1) Sales of unprepared food and food ingredients intended for human consumption, shall, subject to the exemptions provided in this article, only become taxable at the rate of eight cents on each dollar of sales commencing on and after January 1, 2018;

(2) Sales or use of motor vehicles shall be taxable at the rates provided in section five of this article;

(3) Sales, use and consumption of gasoline and special fuel shall be taxable as provided in section twenty-one of this article;

(4) The service of providing the use of rooms in lodging facilities, such as hotels, motels, tourist homes and rooming houses, shall be taxable at the rate of eleven cents on each dollar of sales; Provided, That for purposes of this section, the term “rooming house” shall mean any establishment furnishing rooms to three or more individuals by the day, week or month for a specified charge: Provided, That the tax imposed by this article shall not apply to the use of rooms in a lodging facility for thirty consecutive days or more: and Provided further, That the price for services made subject to the tax imposed in this paragraph (4) shall not include the amount of any other tax legally imposed on the purchaser of such service if separately stated on the documentation of the same; and

(5) The sales of e-cigarette liquid shall be taxable at the rate of eleven cents on each dollar of sales: Provided, that, for the purposes of this paragraph (5) the following terms shall have the meaning ascribed to them herein:

(A) The term “E-cigarette” means an electrical or electronic device that is composed of a heating element, battery or electrical or electronic circuit, or a combination of heating element, battery and electrical or electronic circuit, which works in combination with e-liquid, and without the use or presence of tobacco, to produce an inhalable product of smoke, vapor, fog, mist, gas or aerosol suspension of nicotine or another substance. The term e-cigarette includes, but is not limited to, any so designed, or similarly designed, product that is manufactured, distributed, marketed or sold as an e-cigarette, e-cigar, e-pipe or under any other name or descriptor; and

(B) The term “E-cigarette liquid” means any of the liquids or liquid mixtures which do not contain tobacco and are used in e-cigarettes and is also known as e-juice, e-fluid, e-liquid or e-liquid product. E-cigarette liquid includes e-cigarette liquid mixing kits and e-cigarette mixing kit components. When used in, or with, an e-cigarette, e-cigarette liquid is vaporized or otherwise converted into an inhalable product. E-cigarette liquid may or may not include, without limitation, propylene glycol, vegetable glycerin, nicotine from any source or flavorings.

(d)_Calculation of tax on fractional parts of a dollar.  The tax computation under subsection (c) of this section shall be carried to the third decimal place, and the tax rounded up to the next whole cent whenever the third decimal place is greater than four and rounded down to the lower whole cent whenever the third decimal place is four or less. The vendor may elect to compute the tax due on a transaction on a per item basis or on an invoice basis provided the method used is consistently used during the reporting period.

(e) Separate transactions aggregated for billing; coin-operated vending devices. –  Separate sales, such as daily or weekly deliveries, shall not be aggregated for the purpose of computation of the tax even though such sales are aggregated in the billing or payment therefor. Notwithstanding any other provision, coin-operated amusement and vending machine sales shall be aggregated for the purpose of computation of this tax.

(f)  Credit for sales tax paid to another state.

A person is entitled to a credit against the tax imposed by this article on the use of a particular item of tangible personal property, custom software or service equal to the amount, if any of the sales tax was lawfully paid to another state for the acquisition of that property or service: Provided, That:

(1)  The amount of credit allowed does not exceed the amount of tax imposed on the use of the property in this state;

(2)  For purposes of this sub-section: "sales tax" means and includes a sales tax or compensating use tax imposed on the use of tangible personal property or a service by the state in which the sale occurred; and "state" means and includes the District of Columbia but does not include any of the several territories organized by Congress.

§11-15C-5. Imposition of revised sales, service and use tax on motor vehicle sales; rate of tax; use of motor vehicle purchased out of state; definition of sale; definition of motor vehicle; exemptions; collection of tax by Division of Motor Vehicles; dedication of tax to highways; legislative and emergency rules.


(a) Notwithstanding any provision of this article, all motor vehicle sales to West Virginia residents shall be subject to the tax imposed by this article.

(b) Rate of tax on motor vehicles.  Notwithstanding any provision of this article to the contrary, the rate of tax on the sale and use of a motor vehicle shall be six percent on the first $10,000 of its sale price, as defined in section two, article fifteen-b of this chapter, and eight percent on any part of its sales price, so defined, in excess of $10,000: Provided, That so much of the sale price or consideration as is represented by the exchange of other vehicles on which the tax imposed by this section or section four, article three, chapter seventeen-a of this code has been paid by the purchaser shall be deducted from the total actual sale price paid for the motor vehicle, whether the motor vehicle be new or used.

(c) Motor vehicles purchased out of state.  Notwithstanding anything in this article to the contrary, the tax imposed by this section shall apply to all motor vehicles used, as defined in this article, within this state, regardless of whether the vehicle was purchased in a state other than West Virginia.

(d) Definition of sale.  Notwithstanding any provision of this article to the contrary, for purposes of this section, "sale", "sales" or "selling" means any transfer or lease of the possession or ownership of a motor vehicle for consideration, including isolated transactions between individuals not being made in the ordinary course of repeated and successive business and also including casual and occasional sales between individuals not conducted in a repeated manner or in the ordinary course of repetitive and successive transactions.

(e) Definition of motor vehicle. For purposes of this section, "motor vehicle" means every device capable of being propelled in or upon which any person or property is or may be transported or drawn upon a highway including, but not limited to: Automobiles; buses; motor homes; street-legal motorcycles; motorboats; all-terrain vehicles; snowmobiles; low-speed vehicles; trucks, truck tractors and road tractors having a weight of less than fifty-five thousand pounds; trailers, semitrailers, full trailers, pole trailers and converter gear having a gross weight of less than two thousand pounds; and motorboat trailers, fold-down camping trailers, traveling trailers, house trailers and motor homes; except that the term "motor vehicle" does not include: Modular homes, manufactured homes, mobile homes, similar non-motive propelled vehicles susceptible of being moved upon the highways but primarily designed for habitation and occupancy; devices operated regularly for the transportation of persons for compensation under a certificate of convenience and necessity or contract carrier permit issued by the Public Service Commission; mobile equipment as defined in section one, article one, chapter seventeen-a of this code; special mobile equipment as defined in section one, article one, chapter seventeen-a of this code; trucks, truck tractors and road tractors having a gross weight of fifty-five thousand pounds or more; trailers, semitrailers, full trailers, pole trailers and converter gear having weight of two thousand pounds or greater.

(f) Exemptions. Notwithstanding any other provision of this code to the contrary, the tax imposed by this section shall not be subject to any exemption in this code other than the following:

(1) The tax imposed by this section does not apply to any passenger vehicle offered for rent in the normal course of business by a daily passenger rental car business as licensed under the provisions of article six-d, chapter seventeen-a of this code. For purposes of this section, a daily passenger car means a motor vehicle having a gross weight of eight thousand pounds or less and is registered in this state or any other state. In lieu of the tax imposed by this section, there is hereby imposed a tax of not less than $5 nor more than $7.50 for each day or part of the rental period. The Commissioner of Motor Vehicles shall propose an emergency rule in accordance with the provisions of article three, chapter twenty-nine-a of this code to establish this tax.

(2) The tax imposed by this section does not apply where the motor vehicle has been acquired by a corporation, partnership or limited liability company from another corporation, partnership or limited liability company that is a member of the same controlled group and the entity transferring the motor vehicle has previously paid the tax on that motor vehicle imposed by this section. For the purposes of this section, control means ownership, directly or indirectly, of stock or equity interests possessing fifty percent or more of the total combined voting power of all classes of the stock of a corporation or equity interests of a partnership or limited liability company entitled to vote or ownership, directly or indirectly, of stock or equity interests possessing fifty percent or more of the value of the corporation, partnership or limited liability company.

(3) The tax imposed by this section does not apply where motor vehicle has been acquired by a senior citizen service organization which is exempt from the payment of income taxes under the United States Internal Revenue Code, Title 26 U.S.C. §501(c)(3) and which is recognized to be a bona fide senior citizen service organization by the Bureau of Senior Services existing under the provisions of article five, chapter sixteen of this code.

(4) The tax imposed by this section does not apply to any active duty military personnel stationed outside of West Virginia who acquires a motor vehicle by sale within nine months from the date the person returns to this state.

(5) The tax imposed by this section does not apply to motor vehicles acquired by registered dealers of this state for resale only.

(6) The tax imposed by this section does not apply to motor vehicles acquired by this state or any political subdivision thereof or by any volunteer fire department or duly chartered rescue or ambulance squad organized and incorporated under the laws of this state as a nonprofit corporation for protection of life or property.

(7) The tax imposed by this section does not apply to motor vehicles acquired by an urban mass transit authority, as defined in article twenty-seven, chapter eight of this code, or a nonprofit entity exempt from federal and state income tax under the Internal Revenue Code for the purpose of providing mass transportation to the public at large or designed for the transportation of persons and being operated for the transportation of persons in the public interest.

(8) The tax imposed by this section does not apply to the registration of a vehicle owned and titled in the name of a resident of this state if the applicant:

(A) Was not a resident of this state at the time the applicant purchased or otherwise acquired ownership of the vehicle;

(B) Presents evidence as the Commissioner of Motor Vehicles may require of having titled the vehicle in the applicant's previous state of residence;

(C) Has relocated to this state and can present such evidence as the Commissioner of Motor Vehicles may require to show bona fide residency in this state; and

(D) Makes application to the Division of Motor Vehicles for a title and registration and pays all other fees required by chapter seventeen-a of this code within thirty days of establishing residency in this state as prescribed in subsection (a), section one-a of this article.

(9)  The tax imposed by this section does not apply to Class B trucks, truck tractors and road tractors registered at a gross weight of fifty-five thousand pounds or more or to Class C trailers, semitrailers, full trailers, pole trailers and converter gear having a weight of two thousand pounds or greater. If an owner of a vehicle has previously titled the vehicle at a declared gross weight of 55,000 pounds or more and the title was issued without the payment of the tax imposed by this section, then before the owner may obtain registration for the vehicle at a gross weight less than 55,000 pounds, the owner shall surrender to the commissioner the exempted registration, the exempted certificate of title and pay the tax imposed by this section based upon the current market value of the vehicle.

(g) The tax imposed by this section applies to, and is imposed upon, the monthly payments for the lease of any motor vehicle leased under a written contract of lease by a resident of West Virginia for a contractually specified continuous period of more than thirty days, which tax is equal to eight percent of the amount of the monthly payment, applied to each payment, and continuing for the entire term of the initial lease period. The tax shall be remitted to the Division of Motor Vehicles on a monthly basis by the lessor of the vehicle. Leases of thirty days or less are taxable under the provisions of this article without reference to this section.

(h) Division of Motor Vehicles to collect. Notwithstanding any provision of this article and article ten of this chapter to the contrary, the Division of Motor Vehicles shall collect the tax imposed by this section: Provided, That such tax is imposed upon the monthly payments for the lease of any motor vehicle leased by a resident of West Virginia, which tax is equal to eight percent of the amount of the monthly payment, applied to each payment, and continuing for the entire term of the initial lease period. The tax shall be remitted to the Division of Motor Vehicles on a monthly basis by the lessor of the vehicle.

(i) Dedication of tax to highways. Notwithstanding any provision of this article to the contrary, all taxes collected pursuant to this section, after deducting the amount of any refunds lawfully paid, shall be deposited in the State Road Fund in the State Treasury and expended by the Commissioner of Highways for design, maintenance and construction of roads in the state highway system.

(j) Legislative rules; emergency rules. Notwithstanding any provision of this article and article ten of this chapter to the contrary, the Commissioner of Motor Vehicles shall promulgate legislative rules explaining and implementing this section, which rules shall be promulgated in accordance with the provisions of article three, chapter twenty-nine-a of this code and should include a minimum taxable value and set forth instances when a vehicle is to be taxed at fair market value rather than its purchase price. The authority to promulgate rules includes authority to amend or repeal those rules.

(k) Notwithstanding any other provision of this code, no municipal sales or use tax or local sales or use tax or special downtown redevelopment district excise tax or special district excise tax shall be imposed under article twenty-two, chapter seven of this code or article thirteen, chapter eight of this code or article thirteen-b of said chapter or article thirty-eight of said chapter or any other provision of this code, except this section, on sales of motor vehicles as defined in this article or on any tangible personal property excepted or exempted from tax under this section. Nothing in this subsection shall be construed to prevent the application of the municipal business and occupation tax on motor vehicle retailers and leasing companies.

§11-15C-6.  Collection of fee in addition to the revised sales, service and use tax for sales of mobile factory-built homes; deposit of additional fee in West Virginia Affordable Housing Trust Fund.


(a) There is imposed, in addition to the revised sales, service and use tax imposed by the provisions of this article, a fee of $20 on all sales by licensed dealers of factory-built homes as that term is defined in section two, article fifteen, chapter thirty-seven of this code to be collected as provided in article fifteen-b of this chapter and remitted to the Tax Commissioner to be deposited by the commissioner in the West Virginia Affordable Housing Trust Fund, as provided in article eighteen-d, chapter thirty-one of this code.

(b) The moneys collected from this additional fee shall be segregated from other funds in the West Virginia Affordable Housing Trust Fund and shall be accounted for separately. Not more than ten percent of these additional moneys may be expended by the West Virginia Affordable Housing Trust Fund to defray administrative and operating costs and expenses actually incurred by the West Virginia Affordable Housing Trust Fund.

§11-15C-7.  Total amount collected is to be remitted.


No profit shall accrue to any person as a result of the collection of the tax imposed by this article notwithstanding the total amount of such taxes collected may be in excess of the amount for which such person would be liable by the application of the levy of eight percent to the gross proceeds of his, her or its sales, and the total of all taxes collected by such person shall be returned and remitted to the Tax Commissioner as hereinafter provided.

§11-15C-8.  Vendor and purchaser must show sale or use exempt; presumption.


In the case of sales and uses exempt from the tax imposed by this article, the burden of proving that a sale or use was exempt from the tax shall be upon both the purchaser and the vendor, unless in the case of the vendor he, she or it takes from the purchaser a certificate signed by and bearing the address of the purchaser and setting forth the reason for the exemption and substantially in the form prescribed by the Tax Commissioner. To prevent evasion, it shall be presumed that all sales and uses are subject to the tax until the contrary is clearly established in a particular case.

§11-15C-9.  Exemptions


(a) Exemptions for which exemption certificate may be issued — A person having a right or claim to any exemption set forth in this subsection may, in lieu of paying the tax imposed by this article and filing a claim for refund, execute a certificate of exemption, in the form required by the Tax Commissioner, and deliver it to the vendor of the property or service, in the manner required by the Tax Commissioner. However, the Tax Commissioner may, by rule, specify those exemptions authorized in this subsection for which exemption certificates are not required. The following sales or uses of tangible personal property and services are exempt as provided in this subsection:

(1) School textbooks. –  Sales and use of textbooks required to be used in any of the schools of this state or in any institution in this state which qualifies as a nonprofit or educational institution subject to the West Virginia Department of Education and the Arts, the board of trustees of the university system of West Virginia or the board of directors for colleges located in this state;

(2) Government purchases. –  Purchases and uses of property and services by this state, its institutions or subdivisions, governmental units, institutions or subdivisions of other states: Provided, That the law of the other state allows the same exemption to governmental units or subdivisions of this state and to the United States, including agencies of federal, state or local governments for distribution in public welfare or relief work;

(3) Certain sales to churches. –  Sales and use of property or services to churches which make no charge whatsoever for the services they render: Provided, That the exemption granted in this subdivision applies only to services, equipment, supplies, food for meals and materials directly used or consumed by these organizations and does not apply to purchases of gasoline or special fuel;

(4) Certain purchases and uses by certain non-profit and charitable organizations. –   Purchases and use of tangible personal property or services by a corporation or organization which is exempt from federal income taxes under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as amended, and which is:

(A) A church or a convention or association of churches as defined in Section 170 of the Internal Revenue Code of 1986, as amended;

(B) An elementary or secondary school which maintains a regular faculty and curriculum and has a regularly enrolled body of pupils or students in attendance at the place in this state where its educational activities are regularly carried on;

(C)  A corporation or organization which annually receives more than one half of its support from any combination of gifts, grants, direct or indirect charitable contributions or membership fees;

(D)  An organization which has no paid employees and its gross income from fund raisers, less reasonable and necessary expenses incurred to raise the gross income (or the tangible personal property or services purchased with the net income), is donated to an organization which is exempt from income taxes under Section 501(c) (3) of the Internal Revenue Code of 1986, as amended;

(E) A youth organization, such as the Girl Scouts of the United States of America, the Boy Scouts of America or the YMCA Indian guide/princess program and the local affiliates thereof, which is organized and operated exclusively for charitable purposes and has as its primary purpose the nonsectarian character development and citizenship training of its members;

(F) A bona fide charitable organization which makes no charge whatsoever for the services it renders: Provided, That the exemption granted in this paragraph applies only to services, equipment, supplies, food, meals and materials directly used or consumed by the organization;

(G) For purposes of this subdivision (4):

(i) The term “support” includes, but is not limited to:

(I) Gifts, grants, contributions or membership fees;

(II) Gross receipts from fund raisers which include receipts from admissions, sales of merchandise, performance of services or furnishing of facilities in any activity which is not an unrelated trade or business within the meaning of Section 513 of the Internal Revenue Code of 1986, as amended;

(III) Net income from unrelated business activities, whether or not the activities are carried on regularly as a trade or business;

(IV) Gross investment income as defined in Section 509(e) of the Internal Revenue Code of 1986, as amended;

(V) Tax revenues levied for the benefit of a corporation or organization either paid to or expended on behalf of the organization; and

(VI) The value of services or facilities (exclusive of services or facilities generally furnished to the public without charge) furnished by a governmental unit referred to in Section 170(c) (1) of the Internal Revenue Code of 1986, as amended, to an organization without charge. This term does not include any gain from the sale or other disposition of property which would be considered as gain from the sale or exchange of a capital asset, or the value of an exemption from any federal, state or local tax or any similar benefit;

(ii) The term “charitable contribution” means a contribution or gift to or for the use of a corporation or organization, described in Section 170(c) (2) of the Internal Revenue Code of 1986, as amended; and

(iii) The term “membership fee” does not include any amounts paid for tangible personal property or specific services rendered to members by the corporation or organization;

(H) The exemption allowed by this subdivision (4) does not apply to purchases or use of gasoline or special fuel, or to purchases or use of motor vehicles titled by the division of motor vehicles under the provisions of article three, chapter seventeen-a of this code or to purchases of tangible personal property or services to be used or consumed in the generation of unrelated business income as defined in Section 513 of the Internal Revenue Code of 1986, as amended: Provided, That the exemption granted in this subdivision applies only to purchases and use of services, equipment, supplies and materials used or consumed in the activities for which the organizations qualify as tax exempt organizations under the Internal Revenue Code.

(5) Isolated transactions. –  An isolated transaction in which any otherwise taxable service or any tangible personal property is sold, transferred, offered for sale or delivered by the owner of the property or by his or her representative for the owner’s account, the sale, transfer, offer for sale or delivery not being made in the ordinary course of repeated and successive transactions of like character by the owner or on his or her account by the representative: Provided, That nothing contained in this subdivision may be construed to prevent an owner who sells, transfers or offers for sale tangible personal property in an isolated transaction through an auctioneer from availing himself or herself of the exemption provided in this subdivision, regardless of where the isolated sale takes place. The Tax Commissioner may propose a legislative rule for promulgation pursuant to article three, chapter twenty-nine-a of this code which he or she considers necessary for the efficient administration of this exemption;

(6) Sales for resale. – Sales of services for resale as such and of tangible personal property to a person for the purpose of reselling the tangible personal property: Provided, That sales of gasoline and special fuel by distributors and importers are taxable except when the sale is to another distributor for resale: Provided, however, That sales of building materials or building supplies or other property to any person engaging in the activity of contracting, as defined in this article, which is to be installed in, affixed to or incorporated by that person or his or her agent into any real property, building or structure are taxable under this subdivision: Provided further, That if such real property, building or structure is owned by a person other than the person engaging in the activity of contracting, the owner of such property is entitled to a credit, against the tax imposed on and collectible from such owner under this article, if any, due to such owner’s having been furnished construction labor and materials pursuant to such contracting activity, which credit shall be in the amount of the tax imposed under this article, on the contractor’s purchase of such building materials or building supplies which are installed in, affixed to or incorporated into the owner’s property: And provided further, That the charges paid by a commercial  exhibitor of motion pictures to a distributor of the same, in consideration of the license to exhibit such motion pictures to the public, for which the exhibitor charges an admission fee taxable under this article, shall be treated as a purchase for resale of such motion picture.

(7) Prescription drugs, insulin, durable medical equipment, mobility enhancing equipment and prosthetic devices. –  Sales to and use by individual consumers of drugs, insulin, durable medical equipment, mobility enhancing equipment and prosthetic devices, dispensed upon prescription and intended for use in the diagnosis, cure, mitigation, treatment or prevention of injury or disease:

(8) Licensed health care services. – Charges to patients for licensed health care services and for goods incidental to the rendering of such services.

(9)  Licensed day care centers. - Charges for licensed day care center services.

(10) Casual and occasional sales by certain non-profit organizations. – Casual and occasional sales of property or services not conducted in a repeated manner or in the ordinary course of repetitive and successive transactions of like character by a corporation or organization which is exempt from tax under subdivision (4) of this subsection on its purchases of tangible personal property or services:

(A)  For purposes of this subdivision, the term “casual and occasional sales not conducted in a repeated manner or in the ordinary course of repetitive and successive transactions of like character” means and includes sales of tangible personal property or services at fund raisers sponsored by a corporation or organization which is exempt, under subdivision (4) of this subsection, from payment of the tax imposed by this article on its purchases, if the fund raisers are of limited duration and are held no more than six times during any twelve-month period and “limited duration” means no more than eighty-four consecutive hours; and

(B) The provisions of this subdivision apply to sales made after September 30, 2017.

(11) Sales to certain private colleges. – Sales of property or services to a school which has approval from the board of trustees of the university system of West Virginia or the board of directors of the state college system to award degrees, which has its principal campus in this state, and which is exempt from federal and state income taxes under Section 501(c) (3) of the Internal Revenue Code of 1986, as amended: Provided, That sales of gasoline and special fuel are taxable;

(12) Lottery tickets, materials and services. – Sales of lottery tickets, materials and services by licensed lottery sales agents and lottery retailers authorized by the state lottery commission, under the provisions of article twenty-two, chapter twenty-nine of this code;

(13) Food stamps and WIC drafts. –  Any sales of tangible personal property or services lawfully paid for with food stamps pursuant to the federal food stamp program codified in 7 U.S.C. § 2011 et seq., as amended, or with drafts issued through the West Virginia Special Supplement Food Program for Women, Infants and Children codified in 42 U.S.C. § 1786;

(14) Tickets for admission to certain school activities. – Sales of tickets for admission to activities sponsored by elementary and secondary schools located within this state;

(15) Sales between related business entities. – The sale and use of tangible personal property and the rendering and use of services by one corporation, partnership or limited liability company to or for another corporation, partnership or limited liability company when the entities are members of the same controlled group or are related taxpayers as defined in Section 267 of the Internal Revenue Code. “Control” means ownership, directly or indirectly, of stock, partnership interests or membership interests possessing fifty percent or more of the total combined voting power of all classes of the stock of a corporation, partnership interests of a partnership or membership interests of a limited liability company entitled to vote or ownership, directly or indirectly, of stock, equity interests or membership interests possessing fifty percent or more of the value of the corporation, partnership or limited liability company;

(16) Certain sales or purchases of food. – Food purchased for the following uses are exempt:

(A) Food used, purchased or sold by a public or private school, school-sponsored student organizations or school-sponsored parent-teacher associations to students enrolled in the school or to employees of the school for consumption during normal school hours; but not those sales of food made to the general public;

(B) Food used, purchased or sold by a public or private college or university to students enrolled at the college or university when the sales are made on a contract basis so that a fixed price is paid for consumption of food products for a specific period of time without respect to the amount of food product actually consumed by the particular individual contracting for the sale and no money is paid at the time the food product is served or consumed;

(C) Food used, purchased or sold by a charitable or private nonprofit organization, a nonprofit organization or a governmental agency under a program to provide food to low-income persons at or below cost;

(D) Food sold or used by a charitable or private nonprofit organization, a nonprofit organization or a governmental agency under a program operating in West Virginia for a minimum of five years to provide food at or below cost to individuals who perform a minimum of two hours of community service for each unit of food purchased from the organization;

(E) Food sold in an occasional sale by a charitable or nonprofit organization, including volunteer fire departments and rescue squads, if the purpose of the sale is to obtain revenue for the functions and activities of the organization and the revenue obtained is actually expended for that purpose;

(F) Food sold or used by any religious organization at a social or other gathering conducted by it or under its auspices, if the purpose in selling the food is to obtain revenue for the functions and activities of the organization and the revenue obtained from selling the food is actually used in carrying on those functions and activities: Provided, That purchases made by the organizations are not exempt as a purchase for resale;

(17) Tax prohibited transactions. –  Sales and use of tangible personal property or services which this state is prohibited from taxing under the laws of the United States or under the constitution of this state;

(18) Certain babysitting services. –  Sales of baby-sitting services by individuals who baby-sit for a profit: Provided, That the gross receipts of the individual from the performance of baby-sitting services do not exceed five thousand dollars in a taxable year;

(19) Certain government services and materials. –  Sales and use of governmental services or governmental materials sold in the normal course of government operations, including but not limited to sales and use of services and materials provided by public libraries and by libraries at either public or private, not-for-profit schools and institutions of higher learning;

(20) Certain sales by volunteer fire and emergency rescue organizations. –  Sales and use of tangible personal property and services by volunteer fire departments and rescue squads that are exempt from federal income taxes under Section 501(c) (3) or (c) (4) of the Internal Revenue Code of 1986, as amended, if the sole purpose of the sale is to obtain revenue for the functions and activities of the organization and the revenue obtained is exempt from federal income tax and actually expended for that purpose;

(21)  Certain sales of food by certain youth organizations. –  Sales of food by little leagues, midget football leagues, youth football or soccer leagues, band boosters or other school or athletic booster organizations supporting activities for grades kindergarten through twelve and similar types of organizations, including scouting groups and church youth groups, if the purpose in selling the food is to obtain revenue for the functions and activities of the organization and the revenues obtained from selling the food are actually used in supporting or carrying on functions and activities of the groups: Provided, That the purchases made by the organizations are not exempt as purchases for resale;

(22) Transactions subject to special district excise tax and tax increment financing tax. – Any sale, service or use upon which a special district excise tax was imposed, pursuant to the provisions of section eleven, article thirteen-b, chapter eight of this code, prior to its repeal, or upon which any tax is imposed pursuant to a tax increment financing provision authorized in this code;

(23) Property and services temporarily used in this state. – All tangible personal property and services purchased in another state but temporarily used in this state by a non-resident individual, except gasoline or special fuel not contained in the supply tank of a motor vehicle that is not a motor carrier;

(24) Residence or business moved to this state. – All tangible personal property and services purchased outside this state for use outside this state by a non-resident person who, at least six months thereafter, uses such property or services in this state following the permanent establishment of his, her or its business or residence in this state;

(25) Sales to volunteer fire departments. – Sales of goods and services to any volunteer fire department organized and incorporated under the laws of the state of West Virginia, including but not limited to purchases  for construction or improvement of real estate and for vehicle repair and modification, and of tangible personal property, including but not limited to firefighting or station house equipment,  if such services or property are directly used or consumed for the public safety purposes of such organizations: Provided, That sales of gasoline and special fuel are taxable;

(26)  Tuition. – Tuition charged for attendance at a private elementary or secondary school which is in compliance with the applicable provisions of chapter eighteen of this code, or at a public or private institution of higher learning which has approval, from the board of trustees of the university system of West Virginia or the board of directors of the state college system, to award post-secondary degrees, which has its principal campus in this state, and which, if it is a private school, is exempt from federal and state income taxes under Section 501(c) (3) of the Internal Revenue Code of 1986, as amended;

(27) Aircraft repair services and parts. – Sales of aircraft repair, remodeling and maintenance services when the services are to an aircraft operated by a certified or licensed carrier of persons or property, or by a governmental entity, or to an engine or other component part of an aircraft operated by a certificated or licensed carrier of persons or property, or by a governmental entity and sales of tangible personal property that is permanently affixed or permanently attached as a component part of an aircraft owned or operated by a certificated or licensed carrier of persons or property, or by a governmental entity, as part of the repair, remodeling or maintenance service and sales of machinery, tools or equipment directly used or consumed exclusively in the repair, remodeling or maintenance of aircraft, aircraft engines or aircraft component parts for a certificated or licensed carrier of persons or property or for a governmental entity; and

(28) Out of state sales and services. – Any sale or service rendered by a person, holding a current business registration certificate issued pursuant to article twelve of this chapter, which is treated, according to the provisions of article fifteen-b of this chapter, as being first received by the purchaser thereof outside of this state.

(b) Refundable exemptions — Any person having a right or claim to any exemption set forth in this subsection shall first pay to the vendor the tax imposed by this article and then apply to the Tax Commissioner for a refund or credit, or as provided in section eleven of this article, give to the vendor his, her or its West Virginia direct pay permit number. The following sales of tangible personal property and services are exempt from tax as provided in this subsection:

(1) Sales for direct use in certain production and service activities. –  Sales and use of tangible personal property, such as machinery, supplies, materials and other tangible personal property directly used or consumed in the activities of manufacturing, natural resource production, agricultural production, generation of electric power, communications, transmission or transportation to persons engaged in the activities named in this subdivision as a business: Provided, That this exemption does not apply to purchases of services or of gasoline or special fuel;

(2) Selected services by registered businesses. – The rendering of services by a person, holding a current business registration certificate issued pursuant to article twelve of this chapter, and consisting of:

(A) the professional services of accounting, architecture, engineering or legal representation, if performed by persons licensed to provide such services in West Virginia;

(B) advertising services;

(C) electronic data processing services and related custom software; or

(D) employment recruiting and placement services; and

(3) Certain sales to certain fraternal or social organizations. –  Sales of tangible personal property to nationally chartered fraternal or social organizations for the sole purpose of free distribution in public welfare or relief work: Provided, That this exemption does not apply to sales of gasoline or special fuel.

§11-15C-10. Exemptions; exceptions for sales of liquors and wines to private clubs.


The exemption provided in this article for sales of tangible personal property for the purpose of resale in the form of tangible personal property shall not apply to persons or organizations licensed under authority of article seven, chapter sixty of this code for the purchase of liquor or wines for resale either from the alcohol beverage control commissioner or from retail liquor licensees licensed under authority of article three-a, chapter sixty of this code.

§11-15C-11.  Direct pay permits.


(a) Authorized. –  Notwithstanding any other provision of this article, the Tax Commissioner may, pursuant to rules promulgated by him or her in accordance with article three, chapter twenty-nine-a of this code, authorize a person that is a purchaser, user, distributor or lessee to which sales or leases of tangible personal property are made or services provided, or by whom taxable uses of such property or services are made, to pay any tax imposed by this article directly to the Tax Commissioner and waive the collection of the tax by that person’s vendor. No such authority shall be granted or exercised except upon application to the Tax Commissioner and after issuance by the Tax Commissioner of a direct pay permit. Each direct pay permit granted pursuant to this section is valid until surrendered by the holder or canceled for cause by the commissioner. The commissioner shall prescribe by rules promulgated in accordance with article three, chapter twenty-nine-a of this code, those activities which will cause cancellation of a direct pay permit issued pursuant to this section. Upon issuance of a direct pay permit, payment of the tax imposed or assertion of the exemptions allowed by this article, on sales, leases or uses of tangible personal property and on sales or uses of taxable services, from the vendors of the personal property or services shall be made directly to the Tax Commissioner by the permit holder.

(b) Returns. –  On or before the fifteenth day of each month, every permit holder shall make and file with the Tax Commissioner a revised sales, service and use tax direct pay permit return for the preceding month in the form prescribed by the Tax Commissioner showing the total value of the tangible personal property purchased or used, the amount of taxable services purchased or used, the amount tax due from the permit holder, which shall be paid to the Tax Commissioner with the return, and any other information as the Tax Commissioner considers necessary: Provided, That if the amount of tax due averages less than $250 per month, the Tax Commissioner may permit the filing of quarterly returns in lieu of monthly returns and the amount of tax shown on the returns to be due shall be remitted on or before the fifteenth day following the close of the calendar quarter; and if the amount of tax due averages less than one hundred fifty dollars per calendar quarter, the Tax Commissioner may permit the filing of an annual direct pay permit return and the amount of tax shown on the return to be due shall be remitted on or before the last day of January each year: Provided, however, That the Tax Commissioner may, by nonemergency legislative rules promulgated pursuant to article three, chapter twenty-nine-a of this code, change the minimum amounts established in this subsection. The Tax Commissioner, upon written request by the permit holder, may grant a reasonable extension of time, upon such terms as the Tax Commissioner may require, for the making and filing of direct pay permit returns and paying the tax due. Interest on the tax shall be chargeable on every extended payment at the rate specified in section seventeen, article ten of this chapter.

(c) Term of permit. – A permit issued pursuant to this section is valid until expiration of the taxpayer’s registration year under article twelve of this chapter. This permit is automatically renewed when the taxpayer’s business registration certificate is issued for the next succeeding fiscal year, unless the permit is surrendered by the holder or canceled for cause by the Tax Commissioner.

(d) Effect of holding permit. –  Persons who hold a direct payment permit which has not been canceled are not required to pay the tax to the vendor as otherwise provided in this article. In lieu of paying the tax, such persons shall notify each vendor from whom tangible personal property is purchased, leased or used, or from whom services are purchased or used, of their direct payment permit number and that the tax is being paid directly to the Tax Commissioner. Upon receipt of the notice, the vendor is absolved from all duties and liabilities imposed by this chapter for the collection and remittance of the tax with respect to taxable sales or uses of tangible personal property and taxable sales or uses of services to the permit holder. Vendors who make sales upon which the tax is not collected by reason of the provisions of this section shall maintain records in such manner that the amount involved and identity of each purchaser may be ascertained.

(e) Termination of permit. –  Upon the expiration, cancellation or surrender of a direct payment permit, the provisions of this chapter, without regard to this section, will thereafter apply to the person who previously held the permit, and that person shall promptly notify, in writing, vendors from whom tangible personal property or services are purchased or leased of the cancellation or surrender. Upon receipt of the notice, the vendor is subject to the provisions of this chapter, without regard to this section, with respect to all sales, distributions, leases or storage of tangible personal property, thereafter made to or for that person.

§11-15C-12.  Discretionary designation of per se exemptions.


Notwithstanding any other provision of this code, the Tax Commissioner may, by rule, specify those exemptions authorized in this article or in other provisions of this code or applicable federal law for which exemption certificates or direct pay permits are not required.

§11-15C-13.  Apportionment of gross proceeds.


(a) Exempt and taxable uses. –   Whenever a taxpayer uses or will use purchased or leased tangible personal property, a service or the results of a service for both exempt and nonexempt purposes, to determine the portion of  the gross proceeds  paid to the vendor for such property or service upon which the tax imposed by this article shall apply, the gross proceeds shall be apportioned between the exempt and taxable uses in a manner established as reasonable by the Tax Commissioner by regulations the Tax Commissioner may prescribe.

(b) Uses inside and outside this state. – Whenever a person uses purchased or leased tangible personal property, a service or the results of a service both inside and outside this state, to determine the portion of the gross proceeds paid to the vendor for such property or service upon which the tax imposed by this article shall apply, the gross proceeds shall be apportioned between the in-state and out-of-state uses in a manner established as reasonable by the Tax Commissioner by regulations the Tax Commissioner may prescribe.

§11-15C-14.  Agreements by competing taxpayers.


To provide uniform methods of adding the average equivalent of the tax to the selling price in each sale or transaction subject to the tax, appropriate rules and regulations, except as otherwise herein provided, may be agreed upon or adopted by competing taxpayers or associations of taxpayers, except that all collections shall be made on the basis of the total transaction at the time of sale, without regard to the value of the separate items making up the total amount of the sale. Such rules and regulations, if they do not involve price fixing, shall not be deemed illegal as in restraint of trade or commerce. The Tax Commissioner shall cooperate in formulating such rules and regulations, and, in the event appropriate rules and regulations are not submitted to him or her within thirty days after this article takes effect, or within a reasonable extended period fixed by the Tax Commissioner, he or she shall formulate and promulgate appropriate rules and regulations to effectuate the purpose of this section.

§11-15C-15.  Collection of tax when sale on credit.


A vendor doing business wholly or partially on a credit basis shall require the purchaser to pay the full amount of tax due upon a credit sale at the time such sale is made or within thirty days thereafter.

§11-15C-16.  Separate records of sales required to be maintained by vendors.


(a)  Each vendor shall keep records necessary to account for:

(1) The vendor's gross proceeds from sales of personal property and services;

(2) The vendor's gross proceeds from taxable sales;

(3) The vendor's gross proceeds from exempt sales;

(4) The amount of taxes collected under this article, which taxes shall be held in trust for the state of West Virginia until paid over to the Tax Commissioner; and

(5) Any other information as required by this article, or article fifteen-b of this chapter, or as required by the Tax Commissioner.

(b)  If any vendor engaged in a business making sales or rendering services subject to the tax imposed under this article, who is at the same time engaged in some other kind of business making sales or rendering services, not taxable under this article, fails to keep such the separate records required by this section, there shall be levied upon such vendor a tax based upon the entire gross proceeds of both or all of his, her or its businesses.

§11-15C-17.  Sales to affiliated companies or persons.


In determining gross proceeds of sales from one to another of two or more related or affiliated  persons, or under other circumstances where as a result of the relationship or affiliation between the vendor and purchaser the gross proceeds from a sale are not indicative of the true value of the subject matter of the sale, the Tax Commissioner shall prescribe uniform and equitable rules for determining the amount upon which the tax shall be imposed, corresponding as nearly as possible to gross proceeds from the sale of similar products or services of like quality or character, where no common interest exists between the parties.

§11-15C-18.  Tax return and payment; exceptions.


(a) Payment of tax.  The tax levied by this article is due and payable in monthly installments, on or before the twentieth day of the month next succeeding the month in which the tax accrued, except as otherwise provided in this article.

(b) Tax return.  The taxpayer shall, on or before the twentieth day of each month, make out and mail to the Tax Commissioner a return for the preceding month, in the form prescribed by the Tax Commissioner, showing:

(1) The total gross proceeds of the vendor's business for the preceding month;

(2) The gross proceeds of the vendor's business upon which the tax is based;

(3) The amount of the tax for which the vendor is liable; and

(4) Any further information necessary in the computation and collection of the tax which the Tax Commissioner may require, except as otherwise provided in this article or article fifteen-b of this chapter.

(c) Remittance to accompany return. Except as otherwise provided in this article or article fifteen-b of this chapter, a remittance for the amount of the tax shall accompany the return.

(d) Deposit of collected tax. Tax collected by the Tax Commissioner shall be deposited as provided in section twenty-four of this article, except that:

(1) Tax collected on sales of gasoline and special fuel shall be deposited in the State Road Fund; and

(2) Any tax collected by the Alcohol Beverage Control Commissioner from persons or organizations licensed under authority of article seven, chapter sixty of this code shall be paid into a revolving fund account in the State Treasury, designated the Drunk Driving Prevention Fund, to be administered by the Commission on Drunk Driving Prevention, subject to appropriations by the Legislature.

(e) Return to be signed. A return shall be signed by the taxpayer or the taxpayer's duly authorized agent, when a paper return is prepared and filed. When the return is filed electronically, the return shall include the digital mark or digital signature, as defined in article three, chapter thirty-nine-a of this code, or the personal identification number of the taxpayer, or the taxpayer's duly authorized agent, made in accordance with any procedural rule that may be promulgated by the Tax Commissioner.

(f) Accelerated payment exception.

(1) Notwithstanding any other provision of this code to the contrary, taxpayers whose average monthly payment of the taxes levied by this article during the previous calendar year exceeds $100,000, shall remit the tax attributable to the first fifteen days of June each year by June 20.

(2) For purposes of complying with subdivision (1) of this subsection, the taxpayer shall remit an amount equal to the amount of tax imposed by this article on actual taxable sales of tangible personal property and custom software and sales of taxable services during the first fifteen days of June or, at the taxpayer's election, the taxpayer may remit an amount equal to fifty percent of the taxpayer's liability for tax under this article on taxable sales of tangible personal property and custom software and sales of taxable services made during the preceding month of May.

(3) For a business which has not been in existence for a full calendar year, the total tax due from the business during the prior calendar year shall be divided by the number of months, including fractions of a month, that it was in business during the prior calendar year; and if that amount exceeds $100,000, the tax attributable to the first fifteen days of June each year shall be remitted by June 20 as provided in subdivision (2) of this subsection.

(4) When a taxpayer required to make an advanced payment of tax under subdivision (1) of this subsection makes out its return for the month of June, which is due by July 20, the taxpayer may claim as a credit against liability under this article for tax on taxable transactions during the month of June the amount of the advanced payment of tax made under subdivision (1) of this subsection.

(g) Quarterly and annual returns exception.

(1) When the total revised sales, service and use tax remittance for which a person is liable does not exceed an average monthly amount over the taxable year of $250.00, he or she may pay the tax and make a quarterly return on or before the twentieth day of the first month in the next succeeding quarter in lieu of monthly returns.   

(2)  When the total revised sales, service and use tax remittance for which a person is liable does not in the aggregate exceed $600.00 for the taxable year, he or she may pay the tax and make an annual return on or before 30 days after the end of his or her taxable year for federal income tax purposes.

(3) The Tax Commissioner may, by nonemergency legislative rules promulgated pursuant to article three, chapter twenty-nine-a of this code, change either or both the minimum amounts established in this subsection.

§11-15C-19.  Liability of officers of corporation and other responsible persons.


If a vendor is an association or corporation, the officers thereof having actual control of the funds thereof, or any other responsible person, as the term “person” is defined in section two or article ten of this chapter, shall be personally liable, jointly and severally, for any default on the part of the association or corporation in complying with the provisions of this article, and payment of the tax and any additions to tax, penalties and interest thereon imposed with respect thereto by article ten of this chapter may be enforced against them as against the association or corporation which they represent.

§11-15C-20.  Receivership; bankruptcy; priority of tax.


In the distribution, voluntary or compulsory, in receivership, bankruptcy or otherwise, of the property or estate of any person, all taxes due and unpaid under this article shall be paid from the first money available for distribution in priority to all claims and liens except taxes and debts due the United States which under federal law are given priority over the debts and liens created by this article. Any person charged with the administration or distribution of any such property or estate who shall violate the provisions of this section shall be personally liable for any taxes accrued and unpaid under this article which are chargeable against the person whose property or estate is in administration or distribution.

§11-15C-21. Tax on motor fuel.


(a) General. - All motor fuel and alternative fuel sold, delivered or imported within this state which is subject to the flat rate of the tax imposed by section five, article fourteen-c of this chapter, is subject to the tax imposed by this article and comprises the variable component of the tax imposed by section five, article fourteen-c of this chapter and is collected and remitted at the time the tax imposed by said section is remitted. Sales of motor fuel and alternative fuel upon which the tax imposed by this article has been paid is not again taxed under the provisions of this section. This section means that all gallons of motor fuel and equivalent gallons of alternative fuel sold and delivered or delivered in this state are taxed one time.

(b) Measure of tax. - The measure of tax imposed by this section is as follows:

(1)  On sales of motor fuel, the average wholesale price as defined and determined in section five, article fourteen-c of this chapter. For purposes of maintaining revenue for highways, and recognizing that the tax imposed by this article is generally imposed on gross proceeds from sales to ultimate consumers, whereas the tax on motor fuel herein is imposed on the average wholesale price of the motor fuel; in no case, for the purposes of taxation under this section, may the average wholesale price be determined to be less than $.97 per gallon of motor fuel for all gallons of motor fuel sold during the reporting period, notwithstanding any provision of this article to the contrary. For the purpose of taxation under this section, in no case may the average wholesale price be determined to be less than $2.34 per gallon of motor fuel for all gallons of motor fuel sold during the reporting period notwithstanding any provision of this article to the contrary. Any limitation on the average wholesale price of motor fuel contained in this subsection shall not be applicable to alternative fuel.

(2) On sales of alternative fuel, the average wholesale price as defined and determined in section five, article fourteen-c of this chapter.

(3) The rate of tax imposed under this section on the importation into this state of motor fuel purchased outside this state when the purchase is subject to the flat rate of the tax imposed by section five, article fourteen-c of this chapter shall not be less than five percent of the average wholesale price of the motor fuel, as determined in accordance with said section five, article fourteen-c. The motor fuel subject to the tax imposed by this section comprises the variable component of the tax imposed by section five, article fourteen-c, and shall be collected and remitted by the seller at the time the seller remits the tax imposed by the said section five, article fourteen-c.

(4) The rate of tax imposed under this section, on the use or consumption in this state of motor fuel purchased outside this state, shall be at the rate of five percent of the average wholesale price of the motor fuel, as determined in accordance with section five, article fourteen-c of this chapter. Motor fuel contained in the fuel supply tank of a motor vehicle that is not a motor carrier is not taxable except that motor fuel imported in the fuel supply tank or auxiliary tank of construction equipment, mining equipment, track maintenance equipment or other similar equipment, is taxed in the same manner as that in the fuel supply tank of a motor carrier.

(c) Definitions. - For purposes of this section, the terms “gasoline” and “special fuel” and "alternative fuel" are defined as provided in section two, article fourteen-c of this chapter. Other terms used in this section have the same meaning as when used in a similar context in said article.

(d) Computation of tax due from motor carriers. - Every person who operates or causes to be operated a motor carrier in this state shall pay the tax imposed by this section on the average wholesale price of all gallons or equivalent gallons of motor fuel used in the operation of a motor carrier within this state, under the following rules:

(1) The total amount of motor fuel used in the operation of the motor carrier within this state is that proportion of the total amount of motor fuel used in a motor carrier's operations within and without this state, that the total number of miles traveled within this state bears to the total number of miles traveled within and without this state.

(2) A motor carrier shall first determine the gross amount of tax due under this section on the average wholesale value, determined under section five, article fourteen-c of this chapter, of motor fuel used in the operation of the motor carrier within this state during the preceding quarter, as if all gasoline and special fuel had been purchased outside this state.

(3) Next, the taxpayer shall determine the total tax paid under this article on all motor fuel purchased in this state for use in the operation of the motor carrier.

(4) The difference between (2) and (3) is the amount of tax due under this subsection when (2) is greater than (3), or the amount to be refunded or credited to the motor carrier when (3) is greater than (2), which refund or credit is allowed in the same manner and under the same conditions as a refund or credit is allowed for the tax imposed by article fourteen-a of this chapter.

(e) Tax return and tax due. -

(1) The tax imposed by this section on sales of motor fuel shall be paid by each taxpayer on or before the last day of the calendar month by check, bank draft, certified check or money order payable to the Tax Commissioner for the amount of tax due for the preceding month notwithstanding any provision of this article to the contrary. The commissioner may require all or certain taxpayers to file tax returns and payments electronically. The return required by the commissioner shall accompany the payment of tax. If no tax is due, the return required by the commissioner shall be completed and filed on or before the last day of the month.

(2) The tax due under this section comprising the variable component of the tax due under article fourteen-c of this chapter on alternative fuel, is due and shall be collected and remitted at the time the tax imposed by section five, article fourteen-c of this chapter is due, collected and remitted.

(3) The tax due under this section from motor carriers on the uses or consumption in this state of motor fuel shall be paid by each taxpayer on or before January 25, April 25, July 25 and October 25 of each year, notwithstanding any provision of this article to the contrary, by check, bank draft, certified check or money order, payable to the Tax Commissioner, for the amount of tax due for the preceding quarter. The tax due under this article comprising the variable component of the tax due under article fourteen-c of this chapter is due on the last day of the month. Every taxpayer shall make and file with his or her remittance, a return showing the information the Tax Commissioner requires. The tax due under this article comprising the variable component of the tax due under article fourteen-c of this chapter on alternative fuel, is due and shall be collected and remitted at the time the tax imposed by section five, article fourteen-c of this chapter is due, collected and remitted.

(f) Compliance. - To facilitate ease of administration and compliance by taxpayers, the Tax Commissioner shall require persons liable for the tax imposed by this section on sales of motor fuel to file a combined return and make a combined payment of the tax due under this article on sales of motor fuel and the tax due under article fourteen-c of this chapter on motor fuel. In order to encourage use of a combined return each month and the making of a single payment each month for both taxes, the due date of the return and tax due under article fourteen-c of this chapter is the last day of each month notwithstanding any provision in said article to the contrary. The Tax Commissioner may prescribe reporting and payment requirements for tax due under this section on alternative fuel which accommodate the due dates and requirements prescribed in this section and article fourteen-c of this chapter, either under a separate return and payment or a combined return and payment, within the discretion of the Tax Commissioner: Provided, That the Tax Commissioner shall require motor carriers liable for the taxes imposed by this section on the use of motor fuel in the operation of motor carriers within this state, and the tax imposed by article fourteen-a of this chapter on such gallons of motor fuel, to file a combined return and make a combined payment of the tax due under this section and article fourteen-a of this chapter on the fuel. In order to encourage use of a combined return and the making of a single payment each quarter for both taxes, the due date of the return and tax due under article fourteen-a of this chapter is the last day of January, April, July and October of each calendar year: Provided, That the Tax Commissioner may prescribe reporting and payment requirements for tax due under this section on alternative fuel which accommodate the due dates and requirements prescribed in this section and article fourteen-c of this chapter, either under a separate return and payment or a combined return and payment, within the discretion of the Tax Commissioner.

(g) Dedication of tax. - All tax collected under the provisions of this section, after deducting the amount of refunds lawfully paid, shall be deposited in the State Road Fund in the State Treasurer's office and used only for the purpose of construction, reconstruction, maintenance and repair of highways and payment of principal and interest on state bonds issued for highway purposes. Notwithstanding any provision to the contrary, tax collected on the sale of aviation fuel after deducting the amount of refunds lawfully paid shall be deposited in the State Treasurer's office and transferred to the State Aeronautical Commission to be used for the purpose of matching federal funds available for the reconstruction, maintenance and repair of public airports and airport runways.

(h) Construction. - This section does not tax a sale of motor fuel which this state is prohibited from taxing under the constitution of this state or the constitution or laws of the United States.

§11-15C-22.  Keeping and preserving of taxpayer records; nonresidents.


(a) General. –   Each taxpayer shall keep complete and accurate records of taxable sales, purchases and of charges, together with a record of the tax collected or paid thereon, and shall keep all invoices, bills of lading and such other pertinent documents in such form as the Tax Commissioner may by regulation require. Such records and other documents shall be preserved for a period of time not less than three years, unless the Tax Commissioner shall consent in writing to their destruction within that period or by order require that they be kept longer.

(b) Nonresidents. – A nonresident person engaged in a business within this state in conduct as a result of which the tax imposed by this article becomes due, shall keep within this state adequate records concerning the operation of the business, and all taxes collected and paid in the course of the business. The amount of the tax collected shall not be transmitted outside of this state without the written consent of, and in accordance with the conditions prescribed by the Tax Commissioner.

§11-15C-23. Records of Tax Commissioner; preservation of returns.


The Tax Commissioner shall keep full and accurate records of all moneys received by him or her. He or she shall preserve all returns filed with him or her hereunder for five years.

§11-15C-24.  Proceeds of tax; appropriation of certain revenues.


(a) The proceeds of the tax imposed by this article shall be deposited in the General Revenue Fund of the state except as otherwise expressly provided in this article.

 (b) School Construction Fund. – After the payment or commitment of the proceeds or collections of this tax for the purposes set forth in section eighteen of this article, there shall be dedicated from the collections of this tax the amount of $27,216,996 annually. This amount shall be prorated monthly and deposited into the School Construction Fund created pursuant to section six, article nine-d, chapter eighteen of this code.

(c) Prepaid wireless calling service. – The proceeds or collections of this tax from the sale of prepaid wireless service are dedicated as follows:

(1) The tax imposed by this article upon the sale of prepaid wireless calling service is in lieu of the wireless enhanced 911 fee imposed by section six-b, article six, chapter twenty-four of this code.

(2) Within thirty days following the end of each calendar month, the Tax Commissioner shall remit to the Public Service Commission the proceeds of the tax imposed by this article upon the sale of prepaid wireless calling service in the preceding month, determined as follows: For purposes of determining the amount of those monthly proceeds, the Tax Commissioner shall use an amount equal to one twelfth of the wireless enhanced 911 fees collected from prepaid wireless calling service under section six-b, article six, chapter twenty-four of this code during the previous twelve months. The Public Service Commission shall receive, deposit and disburse the proceeds in the manner prescribed in said section.

(d)  After the payment or commitment of the proceeds or collections of this tax as provided in section eighteen of this article, and after satisfaction of the provisions of subsections (b) and (c) of this section, commencing on July 1 of the first year following the year in which the voters ratify the  Fair and Simple Tax Reform Amendment to the constitution of this state, and continuing in each year thereafter, if the combined balance of funds, as of the thirtieth day of June of that same year, in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B established in section twenty, article two, chapter eleven-b of this code, exceeds ten percent of the general revenue fund budgeted for the fiscal year ending on that same said date, then one half of the amount, if any, by which the annual receipts from the tax imposed by this article in that year exceeds the amount of receipts budgeted to be collected therefrom in the fiscal year commencing on July 1, 2017, shall be deposited into the Revenue Fund Shortfall Reserve Fund, to be retained and applied as provided herein and in article two, of chapter eleven-b of this code, and the balance of such excess shall remain in the General Fund: Provided, That notwithstanding any provision of this code to the contrary, the funds to be deposited in the Revenue Fund Shortfall Reserve Fund pursuant to this section shall, in any given fiscal year, only be appropriated for expenditure in an amount which exceeds the difference between the amount of revenue estimated to be collected for that year from the corporation net income tax imposed by  article twenty-four, of chapter eleven of this code and the amount which would have been estimated to be collected for that year from the imposition of the said corporation net income tax but for the reduction in that year in the rate of such tax provided for in section four of that article, if any.

(e)  After the payment or commitment of the proceeds or collections of this tax as provided in section eighteen of this article, and after satisfaction of the provisions of subsections (b), (c) and (d) of this section, if applicable, on July 1, 2018, the remaining amount of the taxes collected under this article in excess of  the sum of $150,000,000, as of the end of the fiscal year ending June 30, 2018, shall be deposited into the Revenue Fund Shortfall Reserve Fund, to be retained and applied as provided herein and in article two, of chapter eleven-b of this code: Provided, That commencing on July 1, 2019, and on the first day of July of, each year thereafter, one half of the amount, by which the collections of the tax imposed by this article in the immediate past fiscal year, exceeds the amount of collections of the tax for the fiscal year next preceding that year, shall also be deposited into the Revenue Fund Shortfall Reserve Fund, to be retained and applied as provided herein and in article two, of chapter eleven-b of this code:

§11-15C-25.  Construction and severability.


(a) Construction. If a court of competent jurisdiction finds that the provisions of this article and of article fifteen-b of this chapter conflict and cannot be harmonized, then the provisions of this article shall control.

(b) Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this article is for any reason held to be invalid, unlawful or unconstitutional, that decision may not affect the validity of the remaining portions of this article or any part thereof.

§11-15C-26. General procedure and administration; Streamlined Sales and Use Tax Agreement; Legislative Rules.


Each provision of articles ten and fifteen-b of this chapter shall apply to the tax imposed by this article with like effect as if said articles were applicable only to the tax imposed by this article and were set forth in extenso in this article: Provided, That each and every reference to the terms “sales tax,” “use tax” and “sales and use tax” in the said articles ten and fifteen-b shall also mean and include the revised sales, service and use tax imposed under this article: Provided, however, That notwithstanding anything in this code to the contrary, in the case of any conflict between the provisions of this article, and the terms of articles ten or fifteen-b of this chapter, the provisions of this article shall control.  Within ninety days following the passage of the bill enacting this article, the Tax Commissioner shall propose for ultimate promulgation, in accordance with the procedures provided in article three of chapter twenty-nine-a of this code, any such legislative rules as he or she may deem necessary to administer the provisions of this article, and in doing so, the Tax Commissioner may adopt, with appropriate context modifications, any legislative rule then already in effect which is in full conformity with the provisions of this article.

§11-15C-27.  Effective date.


This article shall take effect on October 1, 2017.

Article 16. NONINTOXICATING BEER.

§11-16-13. Barrel tax on nonintoxicating beer.


(a) There is hereby levied and imposed, in addition to the license taxes provided for in this article, a tax of $5.50 on each barrel of thirty-one gallons and in like ratio on each part barrel of nonintoxicating beer manufactured in this state for sale within this state, whether contained or sold in barrels, bottles or other containers, and a like tax is hereby levied and imposed upon all nonintoxicating beer manufactured outside of this state and brought into this state for sale within this state: Provided, That on and after January 1, 2018, the tax imposed by this section shall be $11 on each barrel of thirty-one gallons and in like ratio on each part barrel of nonintoxicating beer manufactured in this state for sale within this state, whether contained or sold in barrels, bottles or other containers, and a like tax is hereby levied and imposed upon all nonintoxicating beer manufactured outside of this state and brought into this state for sale within this state; but no nonintoxicating beer manufactured, sold or distributed in this state is subject to more than one barrel tax. The brewer manufacturing or producing nonintoxicating beer within this state for sale within this state shall pay the barrel tax on such nonintoxicating beer, and, except as provided otherwise, the distributor who is the original consignee of nonintoxicating beer manufactured or produced outside of this state, or who brings such nonintoxicating beer into this state, shall pay the barrel tax on such nonintoxicating beer manufactured or produced outside of this state: Provided, That the barrel tax imposed by this section shall not apply to nonintoxicating beer manufactured by a brewpub.

(b) On or before the tenth day of each month during the license period, every brewer or operator of a brewpub who manufactures or produces nonintoxicating beer within this state shall file a report in writing, under oath, to the Tax Commissioner, in the form prescribed by the Tax Commissioner, stating its total sales, or in the case of a brewpub, its total estimated production of nonintoxicating beer within this state during that month, and at the same time shall pay the tax levied by this article on such production. On or before the tenth day of each month during the license period, every distributor who is the original consignee of nonintoxicating beer manufactured or produced outside this state or who brings such beer into this state for sale shall file a report in writing, under oath, to the Tax Commissioner, in the form prescribed by the Tax Commissioner, stating its total estimated purchases of such nonintoxicating beer during that month, and at the same time shall pay the tax thereon levied by this article for such estimated monthly purchase: Provided, That the Tax Commissioner may allow, or require, a brewer who manufactures or produces nonintoxicating beer outside this state to file the required report and pay the required tax on behalf of its distributor or distributors. Any brewer or distributor or operator of a brewpub who files a report under this subsection may adjust its monthly estimated sales or purchases or production report or reports by filing amended reports by the twenty-fifth day of the reporting month.

(c) Every brewer or distributor or operator of a brewpub who files a report under subsection (b) of this section shall file a final monthly report of said sales or purchases or production, in a form and at a time prescribed by the Tax Commissioner, stating actual nonintoxicating beer sales, purchases, or production and other information which the Tax Commissioner may require, and shall include a remittance for any barrel tax owed for actual sales or purchases or production made in excess of the amount estimated for that month.

(d) Any brewer or distributor or operator of a brewpub who files a report pursuant to subsection (b) of this section reflecting an underestimation of twenty-five percent or more of actual sales or purchases or production of nonintoxicating beer as shown by the report filed pursuant to subsection (c) of this section shall be assessed a penalty of one percent of the total taxes due in such prior month.

(e) Brewers and distributors and operators of brewpubs shall keep all records which relate to the sale or purchase in this state of nonintoxicating beer for a period of three years unless written approval for earlier disposal is granted by the Tax Commissioner.

(f) Brewpubs shall keep such records as required by the federal government and may, in lieu of the recordkeeping and reporting requirements contained in subsections (a) through (e) of this section, file copies of the federal reports contemporaneously with the Tax Commissioner at the time of such filings with the federal government. The filing of duplicate copies of the federal reports with the State Tax Commissioner shall be deemed as compliance with subsections (a) through (e) of this section.

ARTICLE 17. TOBACCO PRODUCTS EXCISE TAX ACT.

§11-17-4b. Levy of tax on e-cigarette liquid; definitions; rate; invoice; report; payment; authority of the Tax Commissioner to inspect and examine witnesses; presumption; bond.


(a) Definitions. — When used in this section, words, terms and phrases defined in this subsection, and any variations thereof required by the context, have the meaning ascribed to them in this subsection, except where the context indicates a different meaning is intended.

(1) “E-cigarette” means an electrical or electronic device that provides a smoke, vapor, fog, mist, gas or aerosol suspension of nicotine or another substance that, when used or inhaled, simulates the activity of smoking. The term e-cigarette includes, but is not limited to, a device that is composed of a heating element, battery or electrical or electronic circuit, or a combination of heating element, battery and electrical or electronic circuit, which works in combination with e-liquid to produce an inhalable product. The term e-cigarette includes, but is not limited to, any so designed, or similarly designed, product that is manufactured, distributed, marketed or sold as an e-cigarette, e-cigar, e-pipe or under any other name or descriptor. The term “simulates the activity of smoking”, in the context of this definition, means replicating, mimicking or reproducing an experience similar to inhaling, or otherwise drawing into the mouth or nose, or exhaling the smoke or combustion product of burning tobacco or any other product or material that can be used in a similar fashion.

(2) “E-cigarette liquid” means any of the liquids or liquid mixtures used in e-cigarettes and is also known as e-juice, e-fluid, e-liquid or e-liquid product.  E-cigarette liquid includes e-cigarette liquid mixing kits and e-cigarette liquid mixing kit components. When used in, or with, an e-cigarette, e-cigarette liquid is vaporized or otherwise converted into an inhalable product. E-cigarette liquid may or may not include, without limitation, propylene glycol, vegetable glycerin, nicotine from any source or flavorings.

(b) Levy of tax; rate.

(1) On and after July 1, 2016, an excise tax is levied and imposed on sales of e-cigarette liquid at the rate of 7.5 cents per milliliter or fraction thereof, or if not sold, then at the same rate upon the use by the wholesaler or dealer. For purposes of this article, any distributor, dealer, subjobber, subjobber dealer, retailer or any other person that imports or transports e-cigarette liquids into this state, or that causes e-cigarette liquids to be imported or transported into this state, is hereby deemed to be a wholesaler for purposes of this section and is liable for the tax imposed under this article. No wholesaler or other person may purchase e-cigarette liquids from any seller not approved by the Tax Commissioner. E-cigarette liquid mixing kits and e-cigarette liquid mixing kit components shall be taxed in accordance with the amount of e-cigarette liquid, in milliliters, that can be produced by or from the kit or components thereof, as determined by the Tax Commissioner.

(2) Only one sale of e-cigarette liquid shall be used in computing the amount of tax due under this section.

(c) How tax paid; invoice required; reports required; due date; records to be kept.

(1) The tax imposed in this section on e-cigarette liquid shall be paid using an invoice method prescribed by the Tax Commissioner.

(2) The tax will be paid on any and all e-cigarette liquid coming into the state for the purpose of sale or use in this state on and after July 1, 2016.

(3) Contents of delivery ticket or invoice. — Unless otherwise permitted in writing by the Tax Commissioner, each delivery ticket or invoice for each purchase or sale of e-cigarette liquid must be recorded upon a serially numbered invoice showing:

(A) The name and address of the seller and the purchaser;

(B) The point of delivery;

(C) The date;

(D) (i) The number of e-cigarette cartridges, apparatus, containers or other devices; (ii) the quantity in milliliters of each cartridge, apparatus, container or other device; (iii) the wholesale price of each e-cigarette cartridge, apparatus, container or other device delivered in this state; or (iv) if sold outside of a cartridge or other device or container, the total quantity in milliliters of e-cigarette liquid not in cartridges, apparatus or other device or container delivered in this state and the wholesale price of the e-cigarette liquid;

(E) The invoice must either set out the amount of tax imposed by this article separately on the invoice or the invoice may instead indicate that the tax imposed under this article is included in the total price; and

(F) Any other information required by the Tax Commissioner.

(4) Reports and payments due date. — On or before the fifteenth day of each month, manufacturers, importers, every place of business as defined in this article, retail dealers, subjobbers, vending machine operators and wholesale dealers and their agents, shall file a report covering the business transacted in the previous month providing any information the Tax Commissioner determines necessary for the ascertainment or assessment of the taxes imposed by this article. Reports shall be signed under penalty of perjury and be in a form as prescribed by the Tax Commissioner. The amount of tax shown to be due on the monthly report, if any, shall be remitted on or before the due date of the monthly report.  The first report due for e-liquid sales is August 15, 2016, for the sales completed in July 2016.

(5) Reports required. — The reports prescribed in this article are required, although a tax may not be due or no business transacted, for the period covered by the report.  In the case of any failure to file a report on the date prescribed for filing when no tax is due, unless it is shown that the failure was due to reasonable cause, there is hereby imposed a penalty of $25 for each month or fraction of a month that such report is delinquent, until the report is filed, in addition to any penalties imposed under section nineteen-a of this article.

(6) Records. — Each person required to file a report shall make and keep the records necessary to substantiate the accuracy of the reports required by this section including, but not limited to, records of inventories, receipts, disbursements and sales. Records shall be retained for a period of time not less than three years from the time the report is due or the time when the report is filed, whichever is later.

(d) Inspection of records and stocks; examination of witnesses; registration of e-cigarette sellers; presumption of nontax paid.

(1) The Tax Commissioner has the authority to inspect or examine the records, books and papers, and any equipment or e-cigarette apparatus, and any stock of e-cigarette liquid kept in or upon the premises of persons who sell, possess or store e-cigarette liquid, for the purpose of determining the quantity and value of e-cigarette liquid acquired, on hand or disbursed, to verify the truth and accuracy of any statement, return, form or report and to ascertain whether the tax imposed by this article has been properly paid.

(2) In addition to the Tax Commissioner’s powers set forth in article ten of this chapter, the Tax Commissioner or the Tax Commissioner’s agent may examine witnesses under oath in order to ascertain the amount of taxes and reports due under this article.  If a witness or person fails or refuses to testify or grant access to records, books, papers, equipment or e-cigarette apparatus, or any stock of e-cigarette liquid, necessary or useful to ascertain the amount of taxes and reports due under this article, the Tax Commissioner shall certify the facts and names to the circuit court of the county having jurisdiction of the party and the court shall issue a summons to the party to appear before the Tax Commissioner at a place designated within the jurisdiction of the court, on a day fixed, to be continued as the occasion may require for good cause shown, to testify and give evidence and to produce for inspection any books, records and papers that may be required and to grant access to records, books, papers, equipment or e-cigarette apparatus, or any stock of e-cigarette liquid, for the purpose of ascertaining the amount of tax and reports due, if any.

(3) Each wholesale dealer of e-cigarette liquid must register with the Tax Commissioner and maintain a business registration certificate, showing the wholesale dealer of e-cigarette liquid to be registered as a seller of tobacco products or seller of both cigarettes and tobacco products prior to the sale or delivery of e-cigarette liquid to any retail dealer or subjobber in this state.  A wholesale dealer may sell tax-paid e-cigarette liquid only to another wholesaler or a retail dealer or subjobber in this state. No person may purchase nontaxed e-cigarette liquid from any seller not approved by the Tax Commissioner.

(4) Whenever e-cigarette liquid is found in the place of business of any retail dealer, without evidence that the tax imposed by this section has been paid, it shall be presumed that the e-cigarette liquid is kept on the premises in violation of this article.

(e) Bond. — The Tax Commissioner may require wholesalers, subjobbers or retail dealers to file a continuous surety bond in an amount to be fixed by the Tax Commissioner but no less than $1,000.  The bond shall be conditioned upon faithfully complying with the provisions of this article including the filing of the returns and payment of all taxes prescribed by this article.

(f) Administration and enforcement. — The provisions of this article and articles nine and ten of this chapter apply to administration and enforcement of the excise tax on e-cigarette liquid in the same manner and to the same extent as they apply to administration and enforcement of the excise tax on tobacco products, as imposed under this article.

(g) Criminal sanctions. — The criminal sanctions imposed in section nineteen-a of this article are hereby imposed with equal force and application with relation to actions, transactions and responsibilities prescribed under this section and under this article. For the purpose of applying and interpreting the provisions of section nineteen-a of this article, the words “container of tobacco products” shall be interpreted to mean and include the words “container of tobacco products or e-cigarette liquid”.

(h) Prospective Repeal and Replacement. – The tax imposed in this section is repealed and shall no longer be imposed starting on October 1, 2017, when it shall be replaced by provisions of the revised sales, service and use tax imposed under article fifteen-c of this chapter;  Provided, That tax liabilities, if any, arising under this section for periods prior to October 1, 2017, shall be determined, administered, assessed and collected as if the tax imposed by this section had not been repealed; and the rights and duties of taxpayers and the state shall be fully and completely preserved.

ARTICLE 19. SOFT DRINKS TAX.

§11-19-1. Definitions.


As used in this article:

(1) "Bottled soft drinks" shall include includes any and all nonalcoholic beverages, whether carbonated or not, such as soda water, ginger ale, coca cola, lime cola, pepsi cola, doctor pepper, root beer, carbonated water, orangeade, lemonade, fruit juice when any plain or carbonated water, flavoring or syrup is added, or any and all preparations commonly referred to as "soft drinks" of whatever kind, which are closed and sealed in glass, plastic, paper, or any other type of container, envelope, package or bottle, whether manufactured with or without the use of any syrup. The term "bottled soft drinks" shall not include fluid milk to which no flavoring has been added, or natural undiluted fruit juice or vegetable juice.

 (2) "Natural undiluted fruit juice" shall mean means the liquid resulting from the pressing of fruit with or without sweetener being added, or the liquid resulting from the reconstitution of natural fruit juice concentrate by the restoration of water to dehydrated natural fruit juice with or without sweetener being added.

(3) "Natural undiluted vegetable juice" shall mean means the liquid resulting from the pressing of vegetables with or without sweetener being added or the liquid resulting from the reconstitution of natural vegetable juice concentrate by the restoration of water to dehydrated natural vegetable juice with or without sweetener being added.

(4) "Sweetener" shall mean means sugar only, artificial or natural, which singularly flavors the taste of a natural undiluted fruit juice or natural undiluted vegetable juice.

(5) "Soft drink syrups and powders" shall include includes the compound mixture or the basic ingredients, whether dry or liquid, practically and commercially usable in making, mixing or compounding soft drinks by the mixing thereof with carbonated or plain water, ice, fruit, milk or any other product suitable to make a soft drink, among such syrups being such products as coca cola syrup, chero cola syrup, pepsi cola syrup, doctor pepper syrup, root beer syrup, nu-grape syrup, lemon syrup, vanilla syrup, chocolate syrup, cherry smash syrup, rock candy syrup, simple syrup, chocolate drink powder, malt drink powder, or any other prepared syrups or powders sold or used for the purpose of mixing soft drinks commercially at soda fountains, restaurants or similar places as well as those powder bases prepared for the purpose of domestically mixing soft drinks such as kool aid, oh boy drink, tip top, miracle aid and all other similar products.

(6) "Simple syrup" shall mean means the making, mixing, compounding or manufacturing, by dissolving sugar and water or any other mixtures that will create simple syrup to which may or may not be added concentrates or extracts.

(7) "Person" shall mean means and include includes an individual, firm, partnership, association or corporation.

 (8) "Wholesale dealer" includes only those persons who sell any bottled soft drink or soft drink syrup to retail dealers for the purpose of resale.

(9) "Retail dealer" includes every person other than a wholesale dealer mixing, making, compounding or manufacturing any drink from a soft drink syrup or powder base, or a person selling such syrup or powder.

(10) "Distributor" shall mean means any person who manufactures, bottles, produces or purchases for sale to retail dealers any bottled soft drink or soft drink syrup.

(11) "Commissioner" means the State Tax Commissioner, and where the meaning of the context requires, all deputies and employees duly authorized by him or her.

§11-19-2. Excise tax on bottled soft drinks, syrups and dry mixtures; disposition thereof.


(a) For the purpose of providing revenue for the construction, maintenance and operation of a four-year school of medicine, dentistry and nursing of West Virginia University, and for other purposes determined by Legislature, an excise tax is hereby levied and imposed on and after midnight of June 30, 1951 effective January 1, 2018, upon the sale, use, handling or distribution of all bottled soft drinks and all soft drink syrups, whether manufactured within or without this state, as follows:

(1) On each bottled soft drink, a tax of 1 $.05 on each sixteen and nine-tenths fluid ounces, or fraction thereof, or on each one-half liter, or fraction thereof contained therein.

(2) On each gallon of soft drink syrup, a tax of 80¢ $4, and in like ratio on each part gallon thereof, or on each four liters of soft drink syrup a tax of 84 ¢, $4.20 and in like ratio on each part four liters thereof.

(3) On each ounce by weight of dry mixture or fraction thereof used for making soft drinks, a tax of $.05 or on each 28.35 grams, or fraction thereof, a tax of 1¢ $.05.

(b) Any person manufacturing or producing within this state any bottled soft drink or soft drink syrup for sale within this state and any distributor, wholesale dealer or retail dealer or any other person who is the original consignee of any bottled soft drink or soft drink syrup manufactured or produced outside this state, or who brings such drinks or syrups into this state, shall be is liable for the excise tax hereby imposed. The excise tax hereby imposed shall may not be collected more than once in respect to any bottled soft drink or soft drink syrup manufactured, sold, used or distributed in this state.

(c) All Twenty percent of the revenue collected by the commissioner under the provisions of this article, less such the costs of administration as are hereinafter provided for, shall be paid each year by him or her into a special Medical School Fund, which is hereby created in the State Treasury, to be used solely for the construction, maintenance and operation of a four-year school of medicine, dentistry and nursing, as otherwise provided by law, and the remainder of such revenue collected under the provisions of this article in each year shall be remitted to the general fund.

(d) For all periods prior to January 1, 2018, the provisions of this section before their amendment in the year 2017, shall be administered and enforced according to their terms as they existed before January 1, 2018, and the rights and duties of taxpayers and the state shall be determined and applied according to such terms which are fully and completely preserved for such prior periods.

ARTICLE 21. PERSONAL INCOME TAX.

§11-21-4g.  Rate of tax – Taxable years beginning on and after January 1, 2018, ultimate repeal as of January 1, 2032, preservation for prior periods.


For taxable years beginning on and after January 1, 2018, the tax imposed by this article shall apply uniformly, to the West Virginia taxable income of every individual, of every husband and wife who file a joint return under this article and of every estate and trust, at the rate of two and five tenths percent: Provided, That if, for any taxable year thereafter, the combined balance of funds in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B established in section twenty, article two, chapter eleven-b of this code, as of June 30 of the preceding calendar year, exceeds fifteen percent of the general revenue fund budgeted for the fiscal year ending on that date, the rate of the tax imposed by this article for the tax years beginning on or after the first day of January next following such date, shall be reduced by one-tenth of one percentage point for each $50,000,000 by which the actual collections of the revised sales, service and use tax, imposed under article fifteen-c of this chapter, exceed $2,400,000,000 for the fiscal year ending six months prior to January 1 until the rate of the tax imposed by this article is zero percent: Provided, however, That, once the rate of the tax imposed by this article has been reduced pursuant to this section, that rate shall not again be raised:  Provided further, That each and every provision of this article is repealed for all tax periods beginning and after January 1 of the first year in which the rate of the tax is zero percent:  And provided further, That, that tax liabilities, if any, arising for taxable periods prior to the date the tax is thus repealed, shall be determined, administered, assessed and collected as if the tax imposed by this article had not been repealed; and the rights and duties of taxpayers and the state shall be fully and completely preserved.

§11-21-8a. Credit for qualified rehabilitated buildings investment.


A credit against the tax imposed by the provisions of this article shall be allowed as follows:

Certified historic structures. -- For certified historic structures, the credit is equal to ten percent of qualified rehabilitation expenditures as defined in §47(c)(2), Title 26 of the United States Code, as amended: Provided, That for qualified rehabilitation expenditures made after June 30, 2017, the credit allowed by this section is equal to twenty-five percent of the qualified rehabilitation expenditures as defined in §47(c)(2), Title 26 of the United States Code, as amended.  This credit is available for both residential and nonresidential buildings located in this state, that are reviewed by the West Virginia Division of Culture and History and designated by the national park service, United States department of the interior as "certified historic structures," and further defined as a "qualified rehabilitated building," as defined under §47(c)(1), Title 26 of the United States Code, as amended.

§11-21-12. West Virginia adjusted gross income of resident individual.


(a) General. -- The West Virginia adjusted gross income of a resident individual means his or her federal adjusted gross income as defined in the laws of the United States for the taxable year with the modifications specified in this section.

(b) Modifications increasing federal adjusted gross income. -- There shall be added to federal adjusted gross income unless already included therein the following items:

(1) Interest income on obligations of any state other than this state or of a political subdivision of any other state unless created by compact or agreement to which this state is a party;

(2) Interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States, which the laws of the United States exempt from federal income tax but not from state income taxes;

(3) Any deduction allowed when determining federal adjusted gross income for federal income tax purposes for the taxable year that is not allowed as a deduction under this article for the taxable year;

(4) Interest on indebtedness incurred or continued to purchase or carry obligations or securities the income from which is exempt from tax under this article, to the extent deductible in determining federal adjusted gross income;

(5) Interest on a depository institution tax-exempt savings certificate which is allowed as an exclusion from federal gross income under Section 128 of the Internal Revenue Code, for the federal taxable year;

(6) The amount of a lump sum distribution for which the taxpayer has elected under Section 402(e) of the Internal Revenue Code of 1986, as amended, to be separately taxed for federal income tax purposes; and

(7) Amounts withdrawn from a medical savings account established by or for an individual under section twenty, article fifteen, chapter thirty-three of this code or section fifteen, article sixteen of said chapter that are used for a purpose other than payment of medical expenses, as defined in those sections.

(c) Modifications reducing federal adjusted gross income. -- There shall be subtracted from federal adjusted gross income to the extent included therein:

(1) Interest income on obligations of the United States and its possessions to the extent includable in gross income for federal income tax purposes;

(2) Interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States or of the State of West Virginia to the extent includable in gross income for federal income tax purposes but exempt from state income taxes under the laws of the United States or of the State of West Virginia, including federal interest or dividends paid to shareholders of a regulated investment company, under Section 852 of the Internal Revenue Code for taxable years ending after the thirtieth day of June, one thousand nine hundred eighty-seven;

(3) Any amount included in federal adjusted gross income for federal income tax purposes for the taxable year that is not included in federal adjusted gross income under this article for the taxable year;

(4) The amount of any refund or credit for overpayment of income taxes imposed by this state, or any other taxing jurisdiction, to the extent properly included in gross income for federal income tax purposes;

(5) Annuities, retirement allowances, returns of contributions and any other benefit received under the West Virginia Public Employees Retirement System, the West Virginia State Teachers Retirement System and all forms of military retirement, including regular armed forces, reserves and National Guard, including any survivorship annuities derived therefrom, to the extent includable in gross income for federal income tax purposes: Provided, That notwithstanding any provisions in this code to the contrary this modification shall be limited to the first two thousand dollars of benefits received under the West Virginia Public Employees Retirement System, the West Virginia State Teachers Retirement System and, including any survivorship annuities derived therefrom, to the extent includable in gross income for federal income tax purposes for taxable years beginning after the thirty-first day of December, one thousand nine hundred eighty-six; and the first two thousand dollars of benefits received under any federal retirement system to which Title 4 U.S.C. §111 applies: Provided, however, That the total modification under this paragraph shall not exceed two thousand dollars per person receiving retirement benefits and this limitation shall apply to all returns or amended returns filed after the last day of December, one thousand nine hundred eighty-eight;

(6) Retirement income received in the form of pensions and annuities after the thirty-first day of December, one thousand nine hundred seventy-nine, under any West Virginia police, West Virginia Firemen's Retirement System or the West Virginia State Police Death, Disability and Retirement Fund, the West Virginia State Police Retirement System or the West Virginia Deputy Sheriff Retirement System, including any survivorship annuities derived from any of these programs, to the extent includable in gross income for federal income tax purposes;

(7) (A) For taxable years beginning after the thirty-first day of December, two thousand, and ending prior to the first day of January, two thousand three, an amount equal to two percent multiplied by the number of years of active duty in the armed forces of the United States of America with the product thereof multiplied by the first thirty thousand dollars of military retirement income, including retirement income from the regular armed forces, reserves and National Guard paid by the United States or by this state after the thirty-first day of December, two thousand, including any survivorship annuities, to the extent included in gross income for federal income tax purposes for the taxable year.

(B) For taxable years beginning after the thirty-first day of December, two thousand two, the first twenty thousand dollars of military retirement income, including retirement income from the regular armed forces, reserves and National Guard paid by the United States or by this state after the thirty-first day of December, two thousand two, including any survivorship annuities, to the extent included in gross income for federal income tax purposes for the taxable year: Provided, That for taxable years beginning after December 31, 2017, the full amount of the military retirement income, including retirement income from the regular armed forces, reserves and National Guard paid by the United States or by this state, including any survivorship annuities, to the extent included in gross income for federal income tax purposes for the taxable year.

(C) In the event that any of the provisions of this subdivision are found by a court of competent jurisdiction to violate either the Constitution of this state or of the United States, or is held to be extended to persons other than specified in this subdivision, this subdivision shall become null and void by operation of law.

(8) Federal adjusted gross income in the amount of eight thousand dollars received from any source after the thirty-first day of December, one thousand nine hundred eighty-six, by any person who has attained the age of sixty-five on or before the last day of the taxable year, or by any person certified by proper authority as permanently and totally disabled, regardless of age, on or before the last day of the taxable year, to the extent includable in federal adjusted gross income for federal tax purposes: Provided, That if a person has a medical certification from a prior year and he or she is still permanently and totally disabled, a copy of the original certificate is acceptable as proof of disability. A copy of the form filed for the federal disability income tax exclusion is acceptable: Provided, however, That:

(i) Where the total modification under subdivisions (1), (2), (5), (6) and (7) of this subsection is eight thousand dollars per person or more, no deduction shall be allowed under this subdivision; and

(ii) Where the total modification under subdivisions (1), (2), (5), (6) and (7) of this subsection is less than eight thousand dollars per person, the total modification allowed under this subdivision for all gross income received by that person shall be limited to the difference between eight thousand dollars and the sum of modifications under subdivisions (1), (2), (5), (6) and (7) of this subsection;

(9) Federal adjusted gross income in the amount of eight thousand dollars received from any source after the thirty-first day of December, one thousand nine hundred eighty-six, by the surviving spouse of any person who had attained the age of sixty-five or who had been certified as permanently and totally disabled, to the extent includable in federal adjusted gross income for federal tax purposes: Provided, That:

(i) Where the total modification under subdivisions (1), (2), (5), (6), (7) and (8) of this subsection is eight thousand dollars or more, no deduction shall be allowed under this subdivision; and

(ii) Where the total modification under subdivisions (1), (2), (5), (6), (7) and (8) of this subsection is less than eight thousand dollars per person, the total modification allowed under this subdivision for all gross income received by that person shall be limited to the difference between eight thousand dollars and the sum of subdivisions (1), (2), (5), (6), (7) and (8) of this subsection;

(10) Contributions from any source to a medical savings account established by or for the individual pursuant to section twenty, article fifteen, chapter thirty-three of this code or section fifteen, article sixteen of said chapter, plus interest earned on the account, to the extent includable in federal adjusted gross income for federal tax purposes: Provided, That the amount subtracted pursuant to this subdivision for any one taxable year may not exceed two thousand dollars plus interest earned on the account. For married individuals filing a joint return, the maximum deduction is computed separately for each individual;

(11) For the two thousand six taxable year only, severance wages received by a taxpayer from an employer as the result of the taxpayer's permanent termination from employment through a reduction in force and through no fault of the employee, not to exceed thirty thousand dollars. For purposes of this subdivision:

(i) The term "severance wages" means any monetary compensation paid by the employer in the taxable year as a result of permanent termination from employment in excess of regular annual wages or regular annual salary;

(ii) The term "reduction in force" means a net reduction in the number of employees employed by the employer in West Virginia, determined based on total West Virginia employment of the employer's controlled group;

(iii) The term "controlled group" means one or more chains of corporations connected through stock ownership with a common parent corporation if stock possessing at least fifty percent of the voting power of all classes of stock of each of the corporations is owned directly or indirectly by one or more of the corporations and the common parent owns directly stock possessing at least fifty percent of the voting power of all classes of stock of at least one of the other corporations;

(iv) The term "corporation" means any corporation, joint-stock company or association and any business conducted by a trustee or trustees wherein interest or ownership is evidenced by a certificate of interest or ownership or similar written instrument; and

(12) For taxable years beginning after December 31, 2017 social security benefits paid by the Social Security Administration as Old Age, Survivors and Disability Insurance Benefits as provided in §42 U.S.C. 401 et. seq. or as Supplemental Security Income for the Aged, Blind, and Disabled as provided in §42 U.S.C. 1381 et. seq., to the extent included in gross income for federal income tax purposes for the taxable year; and

(12) (13) Any other income which this state is prohibited from taxing under the laws of the United States.

(d) Modification for West Virginia fiduciary adjustment. -- There shall be added to or subtracted from federal adjusted gross income, as the case may be, the taxpayer's share, as beneficiary of an estate or trust, of the West Virginia fiduciary adjustment determined under section nineteen of this article.

(e) Partners and S corporation shareholders. -- The amounts of modifications required to be made under this section by a partner or an S corporation shareholder, which relate to items of income, gain, loss or deduction of a partnership or an S corporation, shall be determined under section seventeen of this article.

(f) Husband and wife. -- If husband and wife determine their federal income tax on a joint return but determine their West Virginia income taxes separately, they shall determine their West Virginia adjusted gross incomes separately as if their federal adjusted gross incomes had been determined separately.

(g) Effective date. -- (1) Changes in the language of this section enacted in the year two thousand shall apply to taxable years beginning after the thirty-first day of December, two thousand.

(2) Changes in the language of this section enacted in the year two thousand two shall apply to taxable years beginning after the thirty-first day of December, two thousand two.

ARTICLE 24.  CORPORATION NET INCOME TAX.

§11-24-4. Imposition of primary tax and rate thereof; effective and termination dates.


Primary tax. -- (1) In the case of taxable periods beginning after the thirtieth day of June, one thousand nine hundred sixty-seven, and ending prior to the first day of January, one thousand nine hundred eighty-three, a tax is hereby imposed for each taxable year at the rate of six percent per annum on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five.

(2) In the case of taxable periods beginning on or after the first day of January, one thousand nine hundred eighty-three, and ending prior to the first day of July, one thousand nine hundred eighty-seven, a tax is hereby imposed for each taxable year on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five of this article, and any banks, banking associations or corporations, trust companies, building and loan associations and savings and loan associations, at the rates which follow:

(A) On taxable income not in excess of fifty thousand dollars, the rate of six percent; and

(B) On taxable income in excess of fifty thousand dollars, the rate of seven percent.

(3) In the case of taxable periods beginning on or after the first day of July, one thousand nine hundred eighty-seven, a tax is hereby imposed for each taxable year on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five of this article, at the rate of nine and three-quarters percent. Beginning the first day of July, one thousand nine hundred eighty-eight, and on each first day of July thereafter for four successive calendar years, the rate shall be reduced by fifteen one hundredths of one percent per year, with such rate to be nine percent on and after the first day of July, one thousand nine hundred ninety-two.

(4) In the case of taxable periods beginning on or after the first day of January, two thousand seven, a tax is hereby imposed for each taxable year on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five of this article, at the rate of eight and three-quarters percent.

(5) In the case of taxable periods beginning on or after the first day of January, two thousand nine, a tax is hereby imposed for each taxable year on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five of this article, at the rate of eight and one-half percent.

(6) In the case of taxable periods beginning on or after the first day of January, two thousand twelve, a tax is hereby imposed for each taxable year on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five of this article, at the rate of seven and three-quarters percent: Provided, That the reduction in tax authorized by this subsection shall be suspended if the combined balance of funds as of the thirtieth day of June, two thousand eleven, in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B established in section twenty, article two, chapter eleven-b of this code does not equal or exceed ten percent of the general revenue fund budgeted for the fiscal year commencing the first day of July, two thousand eleven: Provided, however, That the rate reduction schedule will resume in the calendar year immediately following any subsequent fiscal year when the combined balance of funds as of the thirtieth day of June of that fiscal year in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B next equals or exceeds ten percent of the general revenue fund budgeted for the immediately succeeding fiscal year.

(7) In the case of taxable periods beginning on or after the first day of January, two thousand thirteen, a tax is hereby imposed for each taxable year on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five of this article, at the rate of seven percent: Provided, That the reduction in tax authorized by this subsection shall be suspended for one calendar year subsequent to the occurrence of the suspension of the reduction in tax authorized by subdivision (6) of this section: Provided, however, That the reduction in tax on the first day of any calendar year authorized by this subsection shall be suspended if the combined balance of funds as of the thirtieth day of June of the preceding year in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B established in section twenty, article two, chapter eleven-b of this code does not equal or exceed ten percent of the general revenue fund budgeted for the fiscal year commencing the first day of July of the preceding year.

(8) In the case of taxable periods beginning on or after the first day of January, two thousand fourteen, a tax is hereby imposed for each taxable year on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five of this article, at the rate of six and one-half percent: Provided, That the reduction in tax authorized by this subsection shall be suspended for one calendar year subsequent to the occurrence of the suspension of the reduction in tax authorized by subdivision (7) of this section: Provided, however, That the reduction in tax on the first day of any calendar year authorized by this subsection shall be suspended if the combined balance of funds as of the thirtieth day of June of the preceding year in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B established in section twenty, article two, chapter eleven-b of this code does not equal or exceed ten percent of the general revenue fund budgeted for the fiscal year commencing the first day of July of the preceding year.

(9)  In the case of taxable periods beginning on and after January 1, 2018, a tax is hereby imposed for each taxable year on the West Virginia taxable income of every domestic or foreign corporation engaging in business in this state or deriving income from property, activity or other sources in this state, except corporations exempt under section five of this article, at a rate which, until such rate is zero percent, shall be one percent lower than the percentage that was the rate of such tax that applied to the immediately preceding taxable year: Provided, That the reduction in the rate of tax on the first day of any calendar year authorized by this subsection shall be suspended if either; (i) the rate imposed under article twenty-one of this chapter is greater than zero percent or (ii) the combined balance of funds in the Revenue Fund Shortfall Reserve Fund and the Revenue Fund Shortfall Reserve Fund - Part B established in section twenty, article two, chapter eleven-b of this code, as of June 30 of the preceding year, does not equal or exceed ten percent of the general revenue fund budgeted for the fiscal year commencing July 1 of the preceding year, such rate reduction shall be postponed until the next subsequent taxable year, following the first year thereafter in which both the same two said contingencies, herein otherwise requiring suspension of the rate reduction, are next satisfied: Provided, That once the rate of the tax imposed by this article has been reduced pursuant to this subsection, that rate shall not again be raised, notwithstanding any such contingency.

§11-24-23a. Credit for qualified rehabilitated buildings investment.


A credit against the tax imposed by the provisions of this article shall be allowed as follows:

Certified historic structures. -- For certified historic structures, the credit is equal to ten percent of qualified rehabilitation expenditures as defined in §47(c)(2), Title 26 of the United States Code, as amended: Provided, That for qualified rehabilitation expenditures made after June 30, 2017, the credit allowed by this section is equal to twenty-five percent of the qualified rehabilitation expenditures as defined in §47(c)(2), Title 26 of the United States Code, as amended. This credit is available for both residential and nonresidential buildings located in this state that are reviewed by the West Virginia Division of Culture and History and designated by the national park service, United States department of the interior as "certified historic building", and further defined as a "qualified rehabilitated building", as defined under §47(c)(1), Title 26, of the United States Code, as amended.

CHAPTER 60. STATE CONTROL OF ALCOHOLIC LIQUORS

ARTICLE 3A.  SALES BY RETAIL LIQUOR LICENSEES.

§60-3A-17. Wholesale prices set by commissioner; retail licensees to purchase liquor from state; transportation and storage; method of payment.


(a) The commissioner shall fix wholesale prices for the sale of liquor, other than wine, to retail licensees. The commissioner shall sell liquor, other than wine, to retail licensees according to a uniform pricing schedule. The commissioner shall obtain, if possible, upon request, any liquor requested by a retail licensee and those permitted to manufacture and sell liquor pursuant to section three, article four of this chapter.

(b) Wholesale prices shall be established in order to yield a net profit for the General Revenue Fund of not less than $6,500,000 $13,000,000 annually on an annual volume of business equal to the average for the past three years. The net revenue derived from the sale of alcoholic liquors shall be deposited into the General Revenue Fund in the manner provided in section seventeen, article three of this chapter.

(c) Notwithstanding any provision of this code to the contrary, the commissioner Legislature shall specify the maximum wholesale markup percentage which may be applied to the prices paid by the commissioner for all liquor, other than wine, in order to determine the prices at which all liquor, other than wine, will be sold to retail licensees: Provided, That on and after January 1, 2018, and until adjusted by the Legislature, the maximum wholesale markup percentage applied to the prices paid by the commission for all liquor, other than wine, shall be thirty-six percent. A retail licensee shall purchase all liquor, other than wine, for resale in this state only from the commissioner, and the provisions of sections twelve and thirteen, article six of this chapter shall not apply to the transportation of the liquor: Provided, however, That a retail licensee shall purchase wine from a wine distributor who is duly licensed under article eight of this chapter. All liquor, other than wine, purchased by retail licensees shall be stored in the state at the retail outlet or outlets operated by the retail licensee: Provided, however, further, That the commissioner, in his or her discretion, may upon written request permit a retail licensee to store liquor at a site other than the retail outlet or outlets.

(d) The sale of liquor by the commissioner to retail licensees shall be paid by electronic funds transfer which shall be initiated by the commissioner on the business day following the retail licensees order or by money order, certified check or cashier's check which shall be received by the commissioner at least twenty- four hours prior to the shipping of the alcoholic liquors: Provided, That if a retail licensee posts with the commissioner an irrevocable letter of credit or bond with surety acceptable to the commissioner from a financial institution acceptable to the commissioner guaranteeing payment of checks, then the commissioner may accept the retail licensee's checks in an amount up to the amount of the letter of credit.

(e) (1) A retail licensee may not sell liquor to persons licensed under the provisions of article seven of this chapter at less than one hundred ten percent of the retail licensee's cost as defined in section six, article eleven-a, chapter forty-seven of this code.

(2) A retail licensee may not sell liquor to the general public at less than one hundred ten percent of the retail licensee's cost as defined in section six, article eleven-a, chapter forty-seven of this code.

Note: The purpose of this bill is to preserve the municipal sales and use taxes, contingently reduce the rate of the severance taxes on certain natural resource production, prospectively balance the rate of the severance tax on coal production, provide a refundable credit based on the earned income of low-income workers, provide a refundable credit based on the fixed income of low-income senior citizens,  prospectively repeal the consumer sales and service tax, the use tax and the excise tax on e-cigarette liquid, enact the revised sales, service and use tax law, prospectively increase the rates of tax on the sale of non-intoxicating beer and soft drinks, reduce, make uniform and phase down the rate of, and ultimately repeal the personal income tax, prospectively increase the personal income tax credit for qualified rehabilitated building investments, exempt all social security retirement, survivors’ and disability income and all retirement income for military service from the personal income tax, phase down the rate, and ultimately repeal the corporation net income tax, prospectively increase the corporation net income tax credit for qualified rehabilitated building investments and prospectively increase state profits from wholesale liquor sales.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

 

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