H. B. 3129
(By Delegates Anderson, Ellem, Campbell, Doyle,
Williams, Ashley, Browning, Duke, Trump and Border)
[Introduced March 22, 2005; referred to the
Committee on Education then Finance.]
A BILL to amend and reenact §8-13-5 of the Code of West Virginia,
1931, as amended, relating to excluding income to contractors
for work done for public schools.
Be it enacted by the Legislature of West Virginia:
That §8-13-5 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 13. TAXATION AND FINANCE.
§8-13-5. Business and occupation or privilege tax; limitation on
rates; effective date of tax; exemptions; activity in
two or more municipalities; administrative provisions.
(a)
Authorization to impose tax. -- (1) Whenever any business
activity or occupation, for which the state imposed its annual
business and occupation or privilege tax under article thirteen,
chapter eleven of this code, prior to
the first day of July,
one
one thousand nine hundred eighty-seven, is engaged in or carried on
within the corporate limits of any municipality, the governing body
thereof shall have plenary power and authority, unless prohibited
by general law, to impose a similar business and occupation tax thereon for the use of the municipality.
(2) Municipalities may impose a business and occupation or
privilege tax upon every person engaging or continuing within the
municipality in the business of aircraft repair, remodeling,
maintenance, modification and refurbishing services to any aircraft
or to an engine or other component part of any aircraft as a
separate business activity.
(b)
Maximum tax rates. -- In no case, shall the rate of such
municipal business and occupation or privilege tax on a particular
activity exceed the maximum rate imposed by the state, exclusive of
surtaxes, upon any business activities or privileges taxed under
sections two-a, two-b, two-c, two-d, two-e, two-g, two-h, two-i and
two-j, article thirteen of said chapter eleven, as such rates were
in effect under said article thirteen, on
the first day of January,
one one thousand nine hundred fifty-nine, or in excess of one
percent of gross income under section two-k of said article
thirteen, or in excess of three tenths of one percent of gross
value or gross proceeds of sale under section two-m of said article
thirteen. The rate of municipal business and occupation or
privilege tax on the activity described in subdivision (2),
subsection (a) of this section shall be ten one-hundredths of one
percent. The rate of municipal business and occupation or
privilege tax on the activity of a health maintenance organization
holding a certificate of authority under the provisions of article
twenty-five-a, chapter thirty-three of this code, shall not exceed
one half of one percent to be applied solely to that portion of gross income received from the medicaid program pursuant to Title
XIX of the Social Security Act, the state employee programs
administered by the Public Employees Insurance Agency pursuant to
article sixteen, chapter five of this code, and other federal
programs, for health care items or services provided directly or
indirectly by the health maintenance organization, that is expended
for administrative expenses; and shall not exceed one half of one
percent to be applied to the gross income received from enrollees,
or from employers on behalf of enrollees, from sources other than
Medicaid, state employee programs administered by the Public
Employees Insurance Agency and other federal programs for health
care items or services provided directly or indirectly by the
health maintenance organization:
Provided, That this tax rate
limitation shall not extend to that part of the gross income of
health maintenance organizations which is received from the use of
real property other than property in which any such company
maintains its office or offices in this state, whether such income
is in the form of rentals or royalties. This provision concerning
the maximum municipal business and occupation tax rate on the
activities of health maintenance organizations is effective
beginning after the thirty-first day of December, one thousand nine
hundred ninety-six. Any payments of business and occupation tax
made by a health maintenance organization to a municipality for
calendar year one thousand nine hundred ninety-seven shall not be
subject to recovery by the health maintenance organization.
Administrative expenses shall include all expenditures made by a health maintenance organization other than expenses paid for claims
incurred or payments made to providers for the benefits received by
enrollees.
(c)
Effective date of local tax. -- Any taxes levied pursuant
to the authority of this section may be made operative as of the
first day of the then current fiscal year or any date thereafter:
Provided, That any new imposition of tax or any increase in the
rate of tax upon any business, occupation or privilege taxed under
section two-e of said article thirteen shall apply only to gross
income derived from contracts entered into after the effective date
of such imposition of tax or rate increase, and which effective
date shall not be retroactive in any respect:
Provided, however,
That no tax imposed or revised under this section upon public
utility services may be effective unless and until the municipality
provides written notice of the same by certified mail to said
public utility at least sixty days prior to the effective date of
said tax or revision thereof.
(d)
Exemptions. -- A municipality shall not impose its
business and occupation or privilege tax on any activity that was
exempt from the state's business and occupation tax under the
provisions of section three, article thirteen of said chapter
eleven, prior to
the first day of July,
one one thousand nine
hundred eighty-seven, and determined without regard to any annual
or monthly monetary exemption also specified therein.
(e)
Activity in two or more municipalities. -- Whenever the
business activity or occupation of the taxpayer is engaged in or carried on in two or more municipalities of this state, the amount
of gross income, or gross proceeds of sales, taxable by each
municipality shall be determined in accordance with such
legislative regulations as the Tax Commissioner may prescribe. It
being the intent of the Legislature that multiple taxation of the
same gross income, or gross proceeds of sale, under the same
classification by two or more municipalities shall not be allowed,
and that gross income, or gross proceeds of sales, derived from
activity engaged in or carried on within this state, that is
presently subject to state tax under section two-c or two-h,
article thirteen, chapter eleven of this code, which is not taxed
or taxable by any other municipality of this state, may be included
in the measure of tax for any municipality in this state, from
which the activity was directed, or in the absence thereof, the
municipality in this state in which the principal office of the
taxpayer is located. Nothing in this subsection shall be construed
as permitting any municipality to tax gross income or gross
proceeds of sales in violation of the constitution and laws of this
state or the United States, or as permitting a municipality to tax
any activity that has a definite situs outside its taxing
jurisdiction.
(f) Where the governing body of a municipality imposes a tax
authorized by this section, such governing body shall have the
authority to offer tax credits from such tax as incentives for new
and expanding businesses located within the corporate limits of the
municipality.
(g)
Administrative provisions. -- The ordinance of a
municipality imposing a business and occupation or privilege tax
shall provide procedures for the assessment and collection of such
tax, which shall be similar to those procedures in article
thirteen, chapter eleven of this code, as in existence on June
thirtieth, one thousand nine hundred seventy-eight, or to those
procedures in article ten, chapter eleven of this code, and shall
conform with such provisions as they relate to waiver of penalties
and additions to tax.
(h) A municipality may not impose the tax authorized in this
section on income to contractors for work done in projects for the
repair, construction or renovations of public schools.
NOTE: The purpose of this bill is to exclude income to
contractors for work done for public schools from municipal
business and occupation taxes.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.