Senate Bill No. 782
(By Senators Helmick, Sharpe, Plymale, Chafin, Prezioso
Edgell, Love, Bailey, Bowman, McCabe, Sypolt,
Facemyer, Boley, Sprouse and Guills)
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[Originating in the Committee on Finance;
reported February 22, 2008.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §11-6H-1, §11-6H-2,
§11-6H-3, §11-6H-4, §11-6H-5 and §11-6H-6, all relating to a
special method of valuation of manufacturing inventory
property; providing definitions; providing the methodology for
valuation of manufacturing inventory property; stating that
the initial determination of valuation is to be made by the
county assessor; authorizing the protest and appeal of the
assessor's decision; and stating the effective date of the
article.
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 article, designated §11-6H-1, §11-6H-2,
§11-6H-3, §11-6H-4, §11-6H-5 and §11-6H-6, all to read as follows:
ARTICLE 6H. VALUATION OF SPECIAL MANUFACTURING INVENTORY PROPERTY.
§11-6H-1. Short title.
This article shall be known and cited as the Special
Manufacturing Inventory Property Valuation Act.
§11-6H-2. Definitions.
(a) When used in this article, or in the administration of
this article, terms defined in subsection (b) of this section have
the meanings ascribed to them by this section unless a different
meaning is clearly required by the context in which the term is
used.
(b)
Terms defined.--
(1) "Manufacturer" means a person engaged in the activity of
manufacturing in this state.
(2) "Manufacturing" means a systematic operation or integrated
series of systematic operations engaged in as a business or segment
of a business which transforms or converts tangible personal
property by physical, chemical or other means into a different
form, composition or character from that in which it originally
existed. In no case shall the term "manufacturing" include the
activities of building construction, construction of other
structures or facilities affixed to or on realty, retailing or
agriculture, food processing or food manufacturing, the operation
of any restaurant or retail food preparation or sales operation,
the production of any natural resource, contract mining or any other activity of severing, producing, processing or extracting any
natural resource. Manufacturing production begins with the arrival
of raw materials and ends when the property has reached that point
where no further chemical, physical or other changes are to be made
to the resultant property in the production process.
(3) "Person" means and includes any state or its political
subdivisions or an agency of the State of West Virginia or its
political subdivisions or any individual, firm, partnership, joint
venture, joint stock company, the government of the United States
or its agencies, any public or private corporation, municipal
corporation, cooperative, estate, trust, business trust, receiver,
executor, administrator, any other fiduciary, any representative
appointed by order of any court or otherwise acting on behalf of
others or any other group or combination acting as a unit.
(4) "Salvage value" means the lower of fair market salvage
value or five percent of the original cost of the property.
(5) "Special manufacturing inventory property" means tangible
personal property in the form of inventory of raw materials, goods
in process and finished goods employed exclusively in or resulting
exclusively from manufacturing.
§11-6H-3. Valuation of special manufacturing inventory property.
Notwithstanding any other provision of this code to the
contrary, the value of special manufacturing inventory property,
for the purpose of ad valorem property taxation under this chapter and under article X of the constitution of this state, shall be its
salvage value.
§11-6H-4. Initial determination by county assessor.
The assessor of the county in which a specific item of
property is located shall determine, in writing, whether that
specific item of property is special manufacturing inventory
property subject to valuation in accordance with this article. Upon
making a determination that a taxpayer has special manufacturing
inventory property, the county assessor shall notify the Tax
Commissioner of that determination, and shall provide information
to the Tax Commissioner as the Tax Commissioner requires.
§11-6H-5. Protest and appeal.
At any time after the property is returned for taxation but
prior to the first day of January of the assessment year, any
taxpayer may apply to the county assessor for information regarding
the issue of whether any particular item or items of property
constitute special manufacturing inventory property under this
article which should be subject to valuation in accordance with
this article. If the taxpayer believes that some portion of the
taxpayer's property is subject to the provisions of this article,
the taxpayer shall file objections in writing with the county
assessor. The county assessor shall decide the matter by either
sustaining the protest and making proper corrections or by stating,
in writing if requested, the reasons for the county assessor's refusal. The county assessor may, and if the taxpayer requests,
the county assessor shall, before the first day of January of the
assessment year, certify the question to the Tax Commissioner in a
statement sworn to by both parties, or if the parties are unable to
agree, in separate sworn statements. The sworn statement or
statements shall contain a full description of the property and its
uses and any other information which the Tax Commissioner requires.
The Tax Commissioner shall, as soon as possible on receipt of
the question, but in no case later than the twenty-eighth day of
February of the assessment year, instruct the county assessor as to
how the property shall be treated. The instructions issued and
forwarded by mail to the county assessor are binding upon the
county assessor, but either the county assessor or the taxpayer may
apply to the circuit court of the county for review of the question
of the applicability of this article to the property in the same
fashion as is provided for appeals from the county commission in
section twenty-five, article three of this chapter. The Tax
Commissioner shall prescribe forms on which the questions under
this section shall be certified and the Tax Commissioner has the
authority to pursue any inquiry and procure any information
necessary for disposition of the matter.
§11-6H-6. Effective date.
This article shall be effective for assessment years
commencing on and after the first day of July, two thousand nine.
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(NOTE: The purpose of this bill is to provide a methodology
for the valuation of all special manufacturing inventory property
for property tax purposes.
This article is new; therefore, strike-throughs and
underscoring have been omitted.)
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