ENGROSSED
COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 203
(By Senators Chafin, Tomblin, Mr. President, Manchin, Bailey,
Dittmar, Schoonover, Wagner, Buckalew, Deem, Dugan, Plymale,
Wooton and Jackson.)
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{Originating in the Committee on Finance;
reported March 1, 1995.}
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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 dealer inventory;
inventory to include house trailers and factory-built homes;
reporting market value; legislative intent; and tax
commissioner rules.
Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article six-c, 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-c, chapter seventeen-a of this code, provided that
house trailers and factory-built homes shall be included within the
scope of this article, 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.
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".
§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, 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 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 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
regulations.
(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.
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; 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 and regulations as may be necessary to implement the
provisions of the article:
Provided, That the tax commissioner
shall provide to the joint committee on government and finance by
the first day of January for the next two fiscal years, a report
detailing the results of the administration of this article.