Senate Bill No. 500
(By Senator Craigo, Minear and Plymale)
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[Introduced February 5, 2002; referred to the Committee
on Finance.]
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A BILL to amend and reenact section six, article eleven-a, chapter
forty-seven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to determining the
computation of below cost sales, including retail, wholesale
and sales of gasoline.
Be it enacted by the Legislature of West Virginia:
That section six, article eleven-a, chapter forty-seven of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted as follows:
ARTICLE 11A. UNFAIR TRADE PRACTICES.
§47-11A-6. How cost determined.
(a) The term "cost" when applicable to the business of
retailer shall mean means bona fide cost and: shall mean (i) The
invoice cost of the article, product or item of merchandise to the
retailer or the replacement cost thereof to the retailer within thirty three days prior to before the date of sale, offer for sale
or advertisement for sale, as the case may be, in the quantity last
purchased, whichever is lower, from either of which there shall be
deducted all trade discounts, except customary discounts for cash;
and (ii) to either of which there shall be added the following
items of expense:
(1) Freight charges not otherwise included in the cost of the
article, product or item of merchandise, but which freight charges
shall may not be construed as including cartage to retail outlet if
done or paid for by the retailer;
(2) A markup to cover, in part, the cost of doing business,
which markup, in the absence of proof of a lesser cost, shall be
seven percent of the aggregate of invoice cost or replacement cost
(whichever is used), less trade discounts as aforesaid, and plus
said freight charges.
(b) The term "cost" when applicable to the business of a
wholesaler shall mean means bona fide cost and shall mean (i) the
invoice cost of the merchandise to the wholesaler plus applicable
taxes, or the replacement cost of the merchandise to the wholesaler
within thirty days prior to before the date of sale, offer for sale
or advertisement for sale, as the case may be, in the quantity last
purchased, whichever is lower, from either of which there shall be
deducted all trade discounts except customary discounts for cash
and (ii) to either of which there shall be added the following items of expense:
(1) Freight charges not otherwise included in the cost of the
article, product or item of merchandise, but which freight charges
shall may not be construed as including cartage to the retail
outlet if done or paid for by the wholesaler;
(2) A markup to cover, in part, the cost of doing business,
which markup in the absence of proof of a lesser cost, shall be
four percent of the aggregate of invoice cost or replacement cost
(whichever is used), less trade discounts as aforesaid, and plus
said freight charges.
(c) For the purposes of computing the cost of gasoline, the
term "cost" has the same meaning set out in subsection (a) of this
section, plus the sum of the gallon value of all discounts offered
to retail customers that reduce the retail price of the gasoline to
the retail customer (a minus five cents a gallon discount adds plus
five cents a gallon to the "cost"), whether the discounts are: (1)
Given to the retail customer in the form of coupons, rebates or
similar deduction to the retail price of gasoline in connection
with retail customer's purchase of other nongasoline merchandise
from the retailer; or (2) by virtue of the customer's participation
in the retailer's "club membership" or other similar program
offered by the retailer providing discounts to the customer.
NOTE: The purpose of this bill is
to determine the
computation of below cost retail and wholesale sales, including the
sale of gasoline.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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