H. B. 4501
(By Delegates Campbell, Boggs, Staton,
Cann and Canterbury)
[Introduced February 17, 2004; referred to the
Committee on Finance.]
A BILL to amend the code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §11-15-9h, relating
to creating exemptions from the consumers sales and services
tax for e-commerce vendors, computer hardware and software
developers, internet service companies, educational software,
internet advertising and other e-commerce and high technology
companies.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §11-15-9h, to read as
follows:
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
§11-15-9h. Exemptions for e-commerce vendors, computer hardware
and software developers, internet service companies, electronic
data processors, educational software, internet advertising and other e-commerce and high technology companies.
(a) In order to modernize the exemptions from tax contained in
this article as a result of technological advances in computers and
the expanded role of computers, the internet and global instant
communications in business, and to encourage e-commerce vendors,
computer software developers, computer hardware designers, systems
engineering firms, internet service companies, electronic data
processing companies and other high technology companies to locate
and expand their businesses in West Virginia the following sales of
tangible personal property, custom designed software and services
are exempt:
(1) Sales of computer hardware design services, computer
software design, development, customization and upgrade services,
and website and network design services;
(2) Sales of network, website and computer systems management,
maintenance, engineering, administration and security services:
Provided, That such purchases are directly used or consumed by
persons engaged in e-commerce and high technology business.
(3) Sales of computer hardware or software (including custom
designed software)to be incorporated by a manufacturer in a new
high technology product: Provided, That for purposes of this
subsection the payment of licensing fees for the right to
incorporate hardware or software developed by persons other than
the manufacturer in a manufactured product or payments to a developer for the design of such hardware or software are exempt
from the tax imposed by this article;
(4) Sales of computer hardware and software directly used by
e-commerce vendors located in West Virginia;
(5) Sales of computer hardware to persons engaged in providing
electronic data processing services;
(6) Sales of educational software 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; and
(7) Sales of internet advertising of goods and services;
(b) E-commerce and high technology businesses which enter into
contracts with this state, its institutions and subdivisions,
governmental units, institutions or subdivisions of other states,
or with the United States, including agencies of federal, state or
local governments are exempt from the tax imposed by this article
on purchases of computer hardware, custom designed software, and
services provided by subcontractors for use in fulfilling a
government contract.
(c) E-commerce and high technology business. As used in this
article, the term e-commerce and high technology business includes
the activities of selling goods and services though the internet, computer hardware design and development; computer software design,
development, customization and upgrade; computer systems, website
and network design and development; design and development of
products which incorporate computer hardware and software;
electronic data processing; and network, website and computer
systems management, maintenance, engineering, administration and
security services.
NOTE: The purpose of this bill is to create sales tax
exemptions to encourage high technology companies including:
e-commerce vendors, computer software developers, computer hardware
designers, systems engineering firms, internet service companies,
and electronic data processing companies to locate and expand their
businesses in West Virginia and to provide sales exemptions for
educational software and internet advertising.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.