Senate Bill No. 705
(By Senators Edgell and Helmick)
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[Introduced March 21, 2005; referred to the Committee
on Finance.]
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A BILL to amend and reenact §8-13C-4, §8-13C-5 and §8-13C-6 of the
Code of West Virginia, 1931, as amended, all relating to
Municipal Sales and Service Tax and Municipal Use Tax;
delaying the effective date of these taxes; establishing a
special revenue account in the State Treasury; and making
clerical and technical changes and corrections.
Be it enacted by the Legislature of West Virginia:
That §8-13C-4, §8-13C-5 and §8-13C-6 of the Code of West
Virginia, 1931, as amended, be amended and reenacted, all to read
as follows:
ARTICLE 13C. MUNICIPAL TAX IN LIEU OF BUSINESS AND OCCUPATION TAX
AND MUNICIPAL TAXES APPLICABLE TO PENSION FUNDS.
§8-13C-4 Municipal sales and service taxes.
(a)
Effective on Pension relief municipal sales tax. -- On and
after the first day of July, two thousand five, each qualifying municipality, as defined in section two of this article, has the
plenary power and authority to impose, by ordinance, a pension
relief municipal sales and service tax at a rate not to exceed one
percent, subject to the provisions of this article:
Provided,
That: (1) The tax does not apply to any purchase of tangible
personal property, custom software or the results of taxable
services in a transaction completed within the corporate limits of
the municipality before the first day of July, two thousand eight,
or before such later date specified in the ordinance of the
municipality imposing the tax; and (2) the effective date of the
tax, or of a change in the rate of the tax, shall be no earlier
than the first day of a calendar quarter that at a minimum begins
one hundred eighty days after notice of the tax, or of a change in
the rate of tax, is provided to the Tax Commissioner as provided in
section six of this article.
(b)
Effective on Alternative municipal sales tax. -- On and
after the first day of July, two thousand five, notwithstanding
subsection (a) of this section, and in addition thereto in the case
of a qualifying municipality, any municipality that does not impose
a tax pursuant to subsection (a) of this section and that does not
impose, or ceases to impose, the business and occupation or
privilege tax authorized by section five, article thirteen of this
chapter has the plenary power and authority to impose, by
ordinance, an alternative municipal sales and service tax at a rate
not to exceed one percent, subject to the provisions of this article
: Provided, That: (1) The tax does not apply to any
purchase of tangible personal property, custom software or the
results of taxable services in a transaction completed within the
corporate limits of the municipality before the first day of July,
two thousand eight, or before such later date specified in the
ordinance of the municipality imposing the tax; and (2) the
effective date of the tax, or of a change in the rate of the tax,
shall be no earlier than the first day of a calendar quarter that
at a minimum begins one hundred eighty days after notice of the
tax, or of a change in the rate of tax, is provided to the Tax
Commissioner as provided in section six of this article.
(c)
Uniformity of tax base. -- Any municipal sales and service
tax imposed under the authority granted by this section is subject
to the following:
(1) The base of a municipal sales and service tax imposed
pursuant to this section shall be identical to the base of the
consumers sales and service tax imposed pursuant to article
fifteen, chapter eleven of this code on sales made and services
rendered within the boundaries of the municipality, subject to the
following:
(A) Except for the exemption provided in section nine-f,
article fifteen, chapter eleven of this code, all exemptions and
exceptions from consumers sales and service tax apply to a
municipal sales and service tax imposed pursuant to this section;
and
(B) Sales of gasoline and special fuel are not subject to a
municipal sales and service tax imposed pursuant to this section;
(2) Any municipal sales and service tax imposed pursuant to
this section applies solely to tangible personal property, custom
software and services that are sourced to the municipality. The
sourcing rules set forth in article fifteen-b, chapter eleven of
this code, including any amendments thereto, apply to municipal
sales and use taxes levied pursuant to this article.
(3) (d) Notification of Tax Commissioner. -- Any municipality
that imposes a municipal sales and service tax pursuant to this
section or changes the rate of a municipal sales and service tax
imposed pursuant to this section shall notify the tax commissioner
pursuant to section six of this article.
(4) (e) State level administration required. -- Any
municipality that imposes a municipal sales and service tax
pursuant to this section may not administer or collect the tax, but
shall use the services of the tax commissioner to administer,
enforce and collect the tax.
(5) (f) Tax in addition to state use tax. -- Any municipal
sales and service tax imposed pursuant to this section shall be
imposed in addition to the consumers sales and service tax imposed
pursuant to article fifteen, chapter eleven of this code on sales
made and services rendered within the boundaries of the
municipality and, except as exempted or excepted, all sales made
and services rendered within the boundaries of the municipality shall remain subject to the tax levied by that article
. ;
and
(6) (g) Tax in addition to special district tax. -- Any
municipal sales and service tax imposed pursuant to this section
shall be imposed in addition to any tax imposed pursuant to section
one, article eighteen, chapter seven of this code, sections six and
seven, article thirteen of this chapter and section twelve, article
thirty-eight of this chapter.
§8-13C-5. Municipal use tax.
(a)
Effective on Pension relief municipal use tax. --
On and
after the first day of July, two thousand five, each qualifying
municipality, as defined in section two of this article, that
imposes a pension relief municipal sales and service tax pursuant
to this article shall impose, by ordinance, a pension relief
municipal use tax at the same rate that is set for the pension
relief municipal sales and service tax:
Provided, That: (1) The
tax does not apply to any use of tangible personal property, custom
software or the results of taxable services in the corporate limits
of the municipality where the first use occurs before the first day
of July, two thousand eight, or before such later date specified in
the ordinance of the municipality imposing the tax; and (2) the
effective date of the tax, or of a change in the rate of the tax,
shall be no earlier than the first day of a calendar quarter that
at a minimum begins one hundred eighty days after notice of the
tax, or of a change in the rate of tax, is provided to the Tax
Commissioner as provided in section six of this article.
(b)
Effective on Alternative municipal use tax. -- On and
after the first day of July, two thousand five, each municipality
that imposes an alternative municipal sales and service tax
pursuant to this article shall impose, by ordinance, an alternative
municipal use tax at the same rate that is set for the alternative
municipal sales and service tax:
Provided, That: (1) The tax does
not apply to any use of tangible personal property, custom software
or the results of taxable services in the corporate limits of the
municipality where the first use occurs before the first day of
July, two thousand eight, or before such later date specified in
the ordinance of the municipality imposing the tax; and (2) the
effective date of the tax, or of a change in the rate of the tax,
shall be no earlier than the first day of a calendar quarter that
at a minimum begins one hundred eighty days after notice of the
tax, or of a change in the rate of tax, is provided to the Tax
Commissioner as provided in section six of this article.
(c)
Uniformity of tax base. -- The base of a municipal use tax
imposed pursuant to this section shall be identical to the base of
the use tax imposed pursuant to article fifteen-a, chapter eleven
of this code on the use of tangible personal property, custom
software and taxable services within the boundaries of the
municipality, subject to the following:
(1) Except for the exemption provided in section nine-f,
article fifteen, chapter eleven of this code, all exemptions and
exceptions from the use tax apply to a municipal use tax imposed pursuant to this section; and
(2) Uses of gasoline and special fuel are not subject to a
municipal use tax imposed pursuant to this section when the use is
subject to the tax imposed by article fourteen-c, chapter eleven of
this code.
(d)
Notification to Tax Commissioner.-- Any municipality that
imposes a municipal use tax pursuant to this section or changes the
rate of a municipal use tax imposed pursuant to this section shall
notify the tax commissioner pursuant to section six of this
article.
(e)
State level administration required. -- Any municipality
that imposes a municipal use tax pursuant to this section may not
administer or collect the tax, but shall use the services of the
Tax Commissioner to administer, enforce and collect the taxes.
(f)
Tax in addition to state use tax. -- Any municipal use tax
imposed pursuant to this section shall be imposed in addition to
the use tax imposed pursuant to article fifteen-a, chapter eleven
of this code on the use of tangible personal property, custom
software or taxable services within the boundaries of the
municipality and, except as exempted or excepted, all use of
tangible personal property, custom software or taxable services
within the boundaries of the municipality shall remain subject to
the tax levied by said article.
(g)
Tax in addition to special district tax. -- Any municipal
use tax imposed pursuant to this section shall be imposed in addition to any tax imposed pursuant to section one, article
eighteen, chapter seven of this code, sections six and seven,
article thirteen of this chapter and section twelve, article
thirty-eight of this chapter.
§8-13C-6. Notification to Tax Commissioner; responsibilities of
Tax Commissioner; fee; special revenue account;
application of state tax law.
(a)
Notification to Tax Commissioner. -- Any municipality that
imposes a municipal sales and service tax and a municipal use tax
pursuant to this article or changes the rate of the taxes shall
notify the Tax Commissioner
at least one hundred eighty days before
the effective date of the imposition of the taxes or the change in
the rate of the taxes.
within thirty days of enacting the ordinance
imposing the taxes or changing the rate of the taxes. A municipal
sales and service tax and a municipal use tax imposed pursuant to
this article or a change in the rate of the taxes is not effective
until at least ninety days after the ordinance imposing the taxes
is enacted.
(b)
State level administration of taxes. -- The Tax
Commissioner is responsible for administering, collecting and
enforcing any municipal sales and service tax and any municipal use
tax imposed pursuant to this article in the same manner as the
state
consumers sales and service tax imposed pursuant to article
fifteen, chapter eleven of this code and the state use tax imposed pursuant to article fifteen-a of said chapter.
Additionally, the
(c) Fee for services. -- The Tax Commissioner may
charge
retain from collections a fee not to exceed the lesser of the cost
of the service provided or one percent of the
proceeds from the
municipal sales and service tax amount of taxes imposed pursuant to
this article that are collected by the Tax Commissioner during any
fiscal year.
(d) Establishment of special revenue account. -- There is
created in the State Treasury a special revenue revolving fund
account known as the Tax Department Municipal Sales and Use Tax
Operations Fund, which shall be an interest-bearing account. The
fund shall consist of any future funds received from fees charged
by the Tax Commissioner pursuant to this section and any funds
appropriated by the Legislature or transferred by any public agency
as contemplated or permitted by applicable federal or state law;
and any accrued interest or other return on the moneys in the fund.
The balance remaining in the fund at the end of each fiscal year
shall remain in the fund and not revert to the state General
Revenue Fund.
(c)(e) Application of state sales tax law. -- The state
consumers sales and service tax law, set forth in article fifteen,
chapter eleven of this code, and the amendments to that article and
the rules of the Tax Commissioner relating to the laws shall apply
to a municipal sales and service tax imposed pursuant to this
article to the extent the rules and laws are applicable.
(d)(f) Application of state use tax law. -- The state use tax
law, set forth in article fifteen-a, chapter eleven of this code,
and the amendments to that article and the rules of the Tax
Commissioner relating to the laws shall apply to a municipal use
tax imposed pursuant to this article to the extent the rules and
laws are applicable.
(e)(g) Definitions incorporated. -- Any term used in this
article or in an ordinance adopted pursuant to this article that is
defined in articles fifteen, fifteen-a and fifteen-b, chapter
eleven of this code, as amended, shall have the same meaning when
used in this article or in an ordinance adopted pursuant to this
article, unless the context in which the term is used clearly
requires a different result.
(f)(h) Automatic updating. -- Any amendments to articles nine,
ten, fifteen, fifteen-a and fifteen-b, chapter eleven of this code
shall automatically apply to a sales or use tax imposed pursuant to
this article, to the extent applicable.
(g)(i) Administrative procedures. -- Each and every provision
of the West Virginia Tax Procedure and Administration Act set forth
in article ten, chapter eleven of this code applies to the taxes
imposed pursuant to this article, except as otherwise expressly
provided in this article, with like effect as if that act were
applicable only to the taxes imposed by this article and were set
forth in extenso in this article.
(h)(j) Criminal penalties. -- Each and every provision of the West Virginia Tax Crimes and Penalties Act set forth in article
nine, chapter eleven of this code applies to the taxes imposed
pursuant to this article with like effect as if that act were
applicable only to the taxes imposed pursuant to this article and
were set forth in extenso in this article.
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(NOTE: The purpose of this bill is to delay (i.e., until July
1, 2008) the effective date of the Municipal Sales and Service and
Use Tax. The delay is perceived as being necessary until the Tax
Commissioner has sufficient time to install a new computer system
that can process these taxes and properly account for the taxes
collected. A special revenue account would be created in the
Treasury for deposit of the Tax Commissioner's fee for
administration and collection of the Municipal Sales, Service and
Use Tax. Technical and clerical corrections are also included.
Strike-throughs indicate language that would be stricken from
present law, and underscoring indicates new language that would be
added.)