H. B. 2270

(By Delegates Kiss (By Request), Rowe, Mezzatesta, J. Martin, Staton, Ashley and Faircloth)

(Originating in the House Committee on Finance.)

[February 27, 1995]

A BILL to amend chapter eleven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article six-c, relating to establishing a special method for appraising, assessing and collecting personal property tax; establishing a method for determining market value of dealer vehicle inventory for personal property tax purposes; reporting market value; setting forth a definition; setting forth legislative intent; and providing for promulgation of a legislative rule.
Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, as amended, be amended by adding thereto a new article, designated article six- c, to read as follows:
§11-6C-1. Inventory included within scope of article.
Notwithstanding any other provisions of this code, inventory of vehicles, as that term is defined in section one, article one, chapter seventeen-b of this code, that is held for sale or lease by new or used vehicle dealers licensed under the provisions of article six, chapter seventeen-a of this code and that consists of individual units of personal new or used property, each unit of which, upon its sale to a retail purchaser must, as a matter of law, be titled in the name of the retail purchaser and be registered with the division of motor vehicles, shall be appraised for assessment purposes, as set forth in this article.
This article does not apply to units of inventory which are included in fleet sales, included in transactions between dealers or classified as heavy duty trucks of sixteen thousand pounds or more gross vehicular weight. For purposes of this article, inventory subject to the provisions of this article shall be denoted "dealer vehicle inventory."
§11-6C-2. Method for determining market value of dealer vehicle inventory.
For purposes of appraisal, the market value of dealer vehicle inventory, as of the first day of July of each year, for any dealer in business during the entire preceding twelve-month period, shall be the total annual sales of such inventory made by such dealer during the preceding twelve-month period, divided by twelve. For the purposes of this article, "gross sales" or "total annual sales" means the amount received in money, credits, property, services or other consideration from sales within this state without deduction on account of the cost of the property sold, amounts paid for interest or any other expenses whatsoever. Gross sales or total annual sales shall not be reduced by the value of an item of tangible personal property which is traded-in for the purpose of reducing the purchase price of the item purchased. In the case of dealers who were not in business during the entire twelve-month period immediately preceding the first day of July, the assessor shall estimate the market value of such inventory based on data as may be available to him or her: Provided, That the assessor may extrapolate estimates using such sales data which may be available and reliable when sales are made for a period of three months or more during the prior twelve-month period. In any case, there shall be excluded from the appraisal calculations the value of those units which were not physically held as inventory by the owner of the inventory at any time during the preceding twelve-month period. In all cases, the market value, so derived, shall serve as the basis for calculating the appraised value.
§11-6C-3. Owner to file return estimating market value.
The owner of dealer vehicle inventory shall report the market value of such inventory, derived as set forth in section two of this article, to the assessor, as a part of the return required by law to be filed annually pursuant to the provisions of this chapter.
§11-6C-4. Determination of tax on dealer vehicle inventory.
The annual amount of tax levied upon the dealer vehicle inventory pursuant to article eight of this chapter shall be based upon the market value, determined pursuant to this article, times the assessment percentage then provided by law.
§11-6C-5. Intent of this article; tax commissioner to promulgate rules.
(a) This article is adopted to address the lack of uniformity, audit difficulties and business management issues arising in this state with respect to the assessment of personal property held as new and used dealer vehicle inventory. Accordingly, the legislature finds that the adoption of this article will: (1) provide a more reliable and uniform method of determining market value of dealer vehicle inventory; (2) minimize audit difficulties associated with such property; (3) provide a predictable revenue stream for levying bodies; (4) maximize the owner's ability to manage inventory; and (5) provide clear guidance to local authorities by superseding the wide variety of otherwise lawful appraisal methods now in use in West Virginia.
(b) The tax commissioner shall have the power to promulgate legislative rules in accordance with the provisions of chapter twenty-nine-a of this code as may be necessary to implement the provisions of this article.