ENROLLED
COMMITTEE SUBSTITUTE
FOR
H. B. 4088
(By Delegates Ireland, Anderson, Romine, Hartman,
Stemple, C. Miller, Blair, Evans and Williams)
[Passed March 8, 2008; in effect ninety days from passage.]
AN ACT to amend and reenact §11-6C-1, §11-6C-2, §11-6C-3, §11-6C-4
and §11-6C-5 of the Code of West Virginia, 1931, as amended,
all relating to a change in the calculation of farm equipment
dealers inventory to an average monthly basis rather than the
inventory as of the first day of July.
Be it enacted by the Legislature of West Virginia:
That §11-6C-1, §11-6C-2, §11-6C-3, §11-6C-4 and §11-6C-5 of
the Code of West Virginia, 1931, as amended, be amended and
reenacted, all to read as follows:
ARTICLE 6C. SPECIAL METHOD FOR APPRAISING DEALER VEHICLE
INVENTORY.
§11-6C-1. Inventory included within scope of article.
Notwithstanding any other provisions of law, 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, or held for sale or
lease by daily passenger car rental businesses licensed under the
provisions of article six-d of said chapter, inventory of
motorboats, as that term is defined in section one, article six of
said chapter, that is held for sale or lease by a recreational
vehicle dealer, as that term is defined in said section, that is
licensed under the authority of section three, article six of said
chapter, and farm equipment dealers' inventory, consisting 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 registered
with the Division of Motor Vehicles, shall be appraised for
assessment purposes, as set forth in this article:
Provided, That
house trailers and factory-built homes shall be included within the
scope of this article.
For the purposes of this article, 'farm equipment' means
equipment exclusively used in planting, cultivating, irrigation,
and harvesting of agricultural products, but not marketing of such
products. The term "farm equipment" includes, but is not limited
to, the following equipment, and also includes attachments and
repair parts for the following equipment: tractors; crawler
tractors (other than bulldozers); walking tractors; cultivators; plows; harrows; power tillers; rotary tillers; spading machines;
subsoilers; plastic mulch layers; planters and planting machines;
seeders; mechanical transplanters; manure spreaders; fertilizer
spreaders; insecticide and fertilizer sprayers; irrigation
equipment; harvesters; fixed and portable belt and screw type
conveyors exclusively used in agriculture; cotton pickers; hullers;
swathers; windrowers; balers; bale movers exclusively used in
agriculture; hay conditioners; hay mowers; mowing machines;
mower/conditioners; hay rakes; hay tedders; feed grinders; grain
carts; rock pickers; milking machines and milking machine
components, animal trailers, to the extent that they constitute
tangible personal property, apiary equipment. Provided, that the
term 'farm equipment' does not include: (1) property that is not
tangible personal property, (2) building materials and equipment
that is installed into a building or structure so as to be
converted upon installation into a fixture or into real property,
(3) cars, trucks, motorcycles and any other self-propelled machines
designed primarily for the transportation of persons or property on
a street or highway, (4) trailers, or towed machines or apparatus
designed primarily for the transportation of persons or property on
a street or highway, (5) fork lifts, backhoes, earth movers,
bulldozers, end loaders, power shovels, excavators or other
equipment primarily designed to be used in earth moving, excavation
or construction activity, or in the activity of warehouse materials handling and (6) airplanes, and other aircraft, and (7) all terrain
vehicles, motorcycles and other off road vehicles primarily
designed for recreational use; and 'farm equipment dealers' means
a person, partnership, corporation, association or other form of
business enterprise which primarily sells farm equipment as defined
above.
This article does not apply to units of inventory which are
included in fleet sales, 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", "dealer motorboat inventory", "daily passenger rental
car inventory", "farm equipment dealers inventory" and "house
trailer and factory-built homes inventory".
§11-6C-2. Method for determining market value of dealer vehicle
inventory, dealer motorboat inventory, farm equipment
dealers inventory, daily passenger rental car
inventory and house trailer and factory-built homes
inventory.
(a) For purposes of appraisal, the market value of dealer
vehicle inventory, dealer motorboat inventory and farm equipment
dealers inventory, as of the first day of July of each year, shall
be the gross sales or total annual sales of such inventory made by
such dealer during the preceding calendar year, divided by twelve, for a dealer with respect to which or whom sales were made during
the entire preceding year. 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 calendar year immediately preceding the first day
of July of that calendar year, the assessor shall estimate the
market value of such inventory based on such data as may be
available to him or her:
Provided, That the assessor may
extrapolate estimates using such sales data as may be available and
reliable when sales are made for a period of three months or more
during the prior year
: Provided, however, That 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 year. In all cases, the
market value, so derived, shall serve as the basis for calculating
the appraised value.
(b) For purposes of appraisal, the market value of daily
passenger rental car inventory, as of the first day of July of each year, shall be the gross value of all daily passenger rental cars
made available by a daily passenger rental car business on the
first day of each month of the immediately preceding calendar year:
Provided, That the daily passenger rental car business shall add
together the gross values and divide that sum by twelve. For
purposes of this article, "gross value" means the lowest value for
each vehicle as shown in a nationally accepted used car guide
determined by the Tax Commissioner. To calculate the "gross value"
of any vehicle that does not appear in a nationally accepted used
car guide, the Tax Commissioner shall determine the percent of the
manufacturer's suggested retail price for each such vehicle held as
a daily passenger rental car without deduction on account of the
cost of any inventory, amounts paid for interest or any other
expenses whatsoever. In the case of daily passenger rental car
businesses that were not in business during the entire calendar
year immediately preceding the first day of July of that calendar
year, the assessor shall estimate the market value of such daily
passenger rental car inventory based on such data as may be
available to him or her:
Provided, however, That the assessor may
extrapolate estimates using the daily passenger rental car data
that is made available and reliable when rentals were made for a
period of three months or more during the prior year:
Provided
further, That there shall be excluded from the appraisal
calculations the value of those units which were not physically held as daily passenger rental car inventory by the owner of the
daily passenger rental car inventory at any time during the
preceding year. In all cases, the gross value of daily passenger
rental car inventory, so derived, shall serve as the basis for
calculating the appraised value of the inventory. For purposes of
this article, "daily passenger rental car inventory" includes all
motor vehicles licensed as a Class A motor vehicle as defined in
section one, article ten, chapter seventeen-a of this code.
(c) For purposes of appraisal, the market value of house
trailer and factory-built homes inventory, as of the first day of
July of each year, shall be the gross sales or total annual sales
of such inventory made by such dealer during the preceding calendar
year, divided by twelve, for a dealer with respect to which or whom
sales were made during the entire preceding year. 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 calendar year
immediately preceding the first day of July of that calendar year, the assessor shall estimate the market value of such inventory
based on such data as may be available to him or her
: Provided,
That the assessor may extrapolate estimates using such sales data
as may be available and reliable when sales are made for a period
of three months or more during the prior year
: Provided, however,
That 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 year.
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, daily passenger rental
car inventory, dealer motorboat inventory, farm equipment dealers
inventory, or house trailer and factory-built homes 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, daily
passenger rental car inventory, dealer motorboat
inventory, farm equipment dealers inventory or house
trailer and factory-built homes inventory.
The annual amount of tax levied upon the dealer vehicle
inventory, daily passenger rental car inventory, dealer motorboat inventory, farm equipment dealers inventory or house trailer and
factory-built homes inventory pursuant to article eight of this
chapter shall be based upon the market value as 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 the personal property held
as new and used dealer vehicle inventory, daily passenger rental
car inventory, dealer motorboat inventory, farm equipment dealers
inventory or house trailer and factory-built homes inventory.
Accordingly, the Legislature finds and declares that the adoption
of this article will provide a more reliable and uniform method of
determining market value of dealer vehicle inventory, daily
passenger rental car inventory, dealer motorboat inventory, farm
equipment dealers inventory or house trailer and factory-built
homes inventory; minimize audit problems associated with such
property; provide a predictable revenue stream for levying bodies;
maximize the owner's ability to manage inventory; and provide clear
guidance to local authorities by superseding the wide variety of
otherwise lawful appraisal methods now in use in this state.
(b) The Tax Commissioner shall have the power to promulgate such rules as may be necessary to implement the provisions of this
article.