ENROLLED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 357
(Senators Boley and Burdette, Mr. President,
original sponsors)
____________
[Passed March 10, 1994; in effect from passage.]
____________
AN ACT to amend and reenact section nine, article three, chapter
eleven of the code of West Virginia, one thousand nine
hundred thirty-one, as amended; and to amend and reenact
sections two-d, two-m and two-n, article thirteen of said
chapter, all relating to taxation of municipally-owned
property; and making it clear that the property tax
exemption for property owned by political subdivisions of
other states applies only if such property is used for West
Virginia public purposes and that business and occupation
taxes for municipally-owned power generating facilities is
applied to municipalities established under the laws of this
state.
Be it enacted by the Legislature of West Virginia:
That section nine, article three, chapter eleven of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted; and that sections two-d, two-mand two-n, article thirteen of said chapter be amended and
reenacted, all to read as follows:
ARTICLE 3. ASSESSMENTS GENERALLY.
§11-3-9. Property exempt from taxation.
All property, real and personal, described in this section,
and to the extent herein limited, shall be exempt from taxation,
that is to say: Property belonging to the United States, other
than property permitted by the United States to be taxed under
state law; property belonging exclusively to the state; property
belonging exclusively to any county, district, city, village or
town in this state, and used wholly for public purposes:
Provided,
That property belonging to such subdivision prior to
the effective date of amendment of this section enacted by the
Legislature during its regular session in the year one thousand
nine hundred ninety-four shall be exempt from taxation if such
property is used in whole or in part for public purposes as
otherwise provided in this code; property located in this state,
belonging to any city, town, village, county or any other
political subdivision of another state, and used wholly for
public purposes of this state or any subdivision thereof;
property used exclusively for divine worship; parsonages and the
household goods and furniture pertaining thereto; mortgages,
bonds and other evidence of indebtedness in the hands of bona
fide owners and holders hereafter issued and sold by churches and
religious societies for the purposes of securing money to be used
in the erection of church buildings used exclusively for divine
worship or for the purpose of paying indebtedness thereon;
cemeteries; property belonging to, or held in trust for,colleges, seminaries, academies and free schools, if used for
educational, literary or scientific purposes, including books,
apparatus, annuities and furniture; property belonging to, or
held in trust for, colleges or universities located in West
Virginia, or any public or private nonprofit foundation or
corporation which receives contributions exclusively for such
college or university, if the property or dividends, interest,
rents or royalties derived therefrom are used or devoted to
educational purposes of such college or university; public and
family libraries; property used for charitable purposes and not
held or leased out for profit; property used for the public
purposes of distributing water or natural gas or providing sewer
service by a duly chartered nonprofit corporation when such
property is not held, leased out or used for profit; property
used for area economic development purposes by nonprofit
corporations when such property is not leased out for profit; all
real estate not exceeding one-half acre in extent, and the
buildings thereon, and used exclusively by any college or
university society as a literary hall, or as a dormitory or
clubroom, if not leased or otherwise used with a view to profit;
all property belonging to benevolent associations, not conducted
for private profit; property belonging to any public institution
for the education of the deaf, dumb or blind or any hospital not
held or leased out for profit; house of refuge, lunatic or orphan
asylum; homes for children or for the aged, friendless or infirm,
not conducted for private profit; fire engines and implements for
extinguishing fires, and property used exclusively for the
safekeeping thereof, and for the meeting of fire companies; allproperty on hand to be used in the subsistence of livestock on
hand at the commencement of the assessment year; household goods
to the value of two hundred dollars, whether or not held or used
for profit; bank deposits and money; household goods (which term
is deemed for purposes of this section to mean only personal
property and household goods commonly found within the house and
items used to care for the house and its surrounding property)
when not held or used for profit and personal effects (which term
is deemed for purposes of this section to mean only articles and
items of personal property commonly worn on or about the human
body or carried by a person and normally thought to be associated
with the person) when not held or used for profit; dead victuals
laid away for family use and any other property or security
exempted by any other provision of law; but no property shall be
exempt from taxation which shall have been purchased or procured
for the purpose of evading taxation, whether temporarily holding
the same over the first day of the assessment year or otherwise:
Provided,
That real property which is exempt from taxation by
this section shall be entered upon the assessor's books, together
with the true and actual value thereof, but no taxes shall be
levied upon the same or extended upon the assessor's books.
Notwithstanding any other provisions of this section,
however, no language herein shall be construed to exempt from
taxation any property owned by, or held in trust for,
educational, literary, scientific, religious or other charitable
corporations or organizations, including any public or private
nonprofit foundation or corporation existing for the support of
any college or university located in West Virginia, unless suchproperty, or the dividends, interest, rents or royalties derived
therefrom, is used primarily and immediately for the purposes of
such corporations or organizations.
The tax commissioner shall, by issuance of regulations,
provide each assessor with guidelines to ensure uniform
assessment practices statewide to effect the intent of this
section.
ARTICLE 13. BUSINESS AND OCCUPATION TAX.
§11-13-2d. Public service or utility business.
(a) Upon any person engaging or continuing within this state
in any public service or utility business, except railroad,
railroad car, express, pipeline, telephone and telegraph
companies, water carriers by steamboat or steamship and motor
carriers, the tax imposed by section two of this article shall be
equal to the gross income of the business derived from such
activity or activities multiplied by the respective rates as
follows:
(1) Street and interurban and electric railways, one and
four-tenths percent;
(2) Water companies, four and four-tenths percent, except as
to income received by municipally-owned water plants;
(3) Electric light and power companies, four percent on
sales and demand charges for domestic purposes and commercial
lighting and four percent on sales and demand charges for all
other purposes, and except as to income received by
municipally-owned plants producing or purchasing electricity and
distributing same:
Provided,
That electric light and power
companies which engage in the supplying of public service butwhich do not generate or produce in this state the electric power
they supply shall be taxed on the gross income derived from sales
of power which they do not generate in this state at the rate of
three percent on sales and demand charges for domestic purposes
and commercial lighting and three percent on sales and demand
charges for all other purposes, except as to income received by
plants owned by a municipality, as defined in section two,
article one, chapter eight of this code:
Provided, however,
That
the sale of electric power under this section shall be taxed at
the rate of two percent on that portion of the gross proceeds
derived from the sale of electric power to a plant location of a
customer engaged in a manufacturing activity, if the contract
demand at such plant location exceeds two hundred thousand
kilowatts per hour per year, or if the usage of such plant
location exceeds two hundred thousand kilowatts per hour in a
year:
Provided further,
That the sale of electric power under
this section shall be exempt from the tax imposed by this section
and section two of this article if it is separately metered and
consumed in an electrolytic process for the manufacture of
chlorine in this state, or is separately metered and consumed in
the manufacture of ferroalloy in this state, and the rate
reduction herein provided to the taxpayer shall be passed on to
the manufacturer of the chlorine or ferroalloy. As used in this
section, the term "ferroalloy" means any of various alloys of
iron and one or more other elements used as a raw material in the
production of steel:
And provided further,
That the term does
not include the final production of steel;
(4) Natural gas companies, four and twenty-nine hundredthspercent on the gross income:
Provided,
That the sale of natural
gas under this section shall be exempt from the tax imposed by
this section and section two of this article to the extent that
the natural gas is separately metered and is gas from which the
purchaser derives hydrogen and carbon monoxide for use in the
manufacture of chemicals in this state, and the full economic
benefit of the exception herein provided to the taxpayer shall be
passed on to such purchaser of the natural gas:
Provided,
however,
That there shall be no exemption for the sale of any
natural gas from which the purchaser derives carbon monoxide or
hydrogen for the purpose of resale;
(5) Toll bridge companies, four and twenty-nine hundredths
percent; and
(6) Upon all other public service or utility business, two
and eighty-six hundredths percent.
(b) The measure of this tax shall not include gross income
derived from commerce between this state and other states of the
United States or between this state and foreign countries. The
measure of the tax under this section shall include only gross
income received from the supplying of public service. The gross
income of the taxpayer from any other activity shall be included
in the measure of the tax imposed upon such other activity by the
appropriate section or sections of this article.
(c) Beginning the first day of March, one thousand nine
hundred eighty-nine, electric light and power companies shall
determine their liability for payment of tax under this section
and sections two-m and two-n of this article. If for taxable
months beginning on or after the first day of March, one thousandnine hundred eighty-nine, liability for tax under section two-n
of this article is equal to or greater than the sum of the power
company's liability for payment of tax under subdivision (3),
subsection (a) of this section and section two-m of this article,
then the company shall pay the tax due under section two-n of
this article and not the tax due under subdivision (3),
subsection (a) of this section and section two-m of this article.
If tax liability under section two-n of this article is less,
then tax shall be paid under subdivision (3), subsection (a) of
this section and section two-m of this article and the tax due
under section two-n of this article shall not be paid. The
provisions of subdivision (3), subsection (a) of this section
shall expire and become null and void for taxable years beginning
on or after the first day of January, one thousand nine hundred
ninety-eight.
§11-13-2m. Business of generating or producing electric power;
exception; rates.
(a) Upon every person engaging or continuing within this
state in the business of generating or producing electric power
for sale, profit or commercial use, either directly or through
the activity of others, in whole or in part, when the sale
thereof is not subject to tax under section two-d of this
article, the amount of the tax to be equal to the value of the
electric power, as shown by the gross proceeds derived from the
sale thereof by the generator or producer of the same multiplied
by a rate of four percent, except that the rate shall be two
percent on that portion of the gross proceeds derived from the
sale of electric power to a plant location of a customer engagedin a manufacturing activity, if the contract demand at such plant
location exceeds two hundred thousand kilowatts per hour per
year, or if the usage at such plant location exceeds two hundred
thousand kilowatts per hour in a year.
(b) The measure of this tax shall be the value of all
electric power generated or produced in this state for sale,
profit or commercial use, regardless of the place of sale or the
fact that transmission may be to points outside this state:
Provided,
That the gross income received by a municipality, as
defined in section two, article one, chapter eight of this code,
from plants owned by the municipality and generating or producing
electricity shall not be subject to tax under this article.
(c) Beginning the first day of March, one thousand nine
hundred eighty-nine, every person taxable under this section
shall determine their liability for payment of tax under this
section and under subdivision (3), subsection (a), section two-d
of this article and section two-n of this article. If for
taxable months beginning on or after the first day of March, one
thousand nine hundred eighty-nine, such person's liability for
payment of tax under this section and subdivision (3), subsection
(a), section two-d of this article is less than the amount of
such person's liability for payment of tax under section two-n of
this article, then such person shall pay the tax due under
section two-n and not the sum of the amount of tax due under this
section and under subdivision (3), subsection (a), section two-d
of this article. If the tax due under section two-n of this
article is less, then the amount of tax due under this section
and subdivision (3), subsection (a), section two-d of thisarticle shall be paid. The provisions of this section shall
expire and become null and void for taxable years beginning on or
after the first day of January, one thousand nine hundred
ninety-eight.
§11-13-2n. Business of generating or producing or selling
electric power; exemptions; rates.
(a)
Rate of tax. --
Upon every person engaging or continuing
within this state in the business of generating or producing
electricity for sale, profit or commercial use, either directly
or indirectly through the activity of others, in whole or in
part, or in the business of selling electricity to consumers, or
in both businesses, the tax imposed by section two of this
article shall be equal to:
(1) Twenty-six hundredths of one cent times the kilowatt
hours of net generation available for sale that was generated or
produced in this state by the taxpayer during the taxable year,
except that this rate shall be five hundredths of one cent times
the kilowatt hours of net generation available for sale that was
generated or produced in this state by the taxpayer and sold to
a plant location of a customer engaged in manufacturing activity
if the contract demand at such plant location exceeds two hundred
thousand kilowatts per hour per year or if the usage at such
plant location exceeds two hundred thousand kilowatts per hour in
a year:
Provided,
That in order to encourage the development of
industry to improve the environment of this state, the tax
imposed by this section on any person generating or producing
electric power and an alternative form of energy at a facility
located within this state substantially from gob or other minerefuse shall be equal to five hundredths of one cent times the
kilowatt hours of net generation or production available for
sale. The measure of tax under this subdivision shall be equal
to the total kilowatt hours of net generation available for sale
that was generated or produced in this state by the taxpayer
during the taxable year, regardless of the place of sale or use,
or the fact that transmission may be made to points outside this
state.
(2) Nineteen hundredths of one cent times the kilowatt hours
of electricity sold to consumers in this state that were not
generated or produced in this state by the taxpayer, except that
the rate shall be five hundredths of one cent times the kilowatt
hours of electricity not generated or produced in this state by
the taxpayer which is sold to a plant location in this state of
a customer engaged in manufacturing activity if the contract
demand at such plant location exceeds two hundred thousand
kilowatts per hour per year or if the usage at such plant
location exceeds two hundred thousand kilowatts per hour in a
year. The measure of tax under this subdivision shall be equal
to the total kilowatt hours of electricity sold to consumers in
this state during the taxable year, that were not generated or
produced in this state by the taxpayer, to be determined by
subtracting from the total kilowatt hours of electricity sold to
consumers in the state the net kilowatt hours of electricity
generated or produced in the state by the taxpayer during the
taxable year.
The West Virginia public service commission shall, upon
application of a public utility, allow an immediate pass-throughto the utility's customers in this state in the form of a rate
surcharge the increase enacted by the Legislature during its
third extraordinary session, one thousand nine hundred ninety, in
the tax imposed by this article upon electricity generated or
produced in this state and sold to consumers in this state and
upon electricity not generated or produced in this state that is
sold to consumers in this state.
(b)
Exemptions. --
The provisions of this section shall not
apply to:
(1) Kilowatt hours of electricity generated and sold, or
purchased and resold, by a plant owned by a municipality, as
defined in section two, article one, chapter eight of this code.
(2) Kilowatt hours of electric power that are separately
metered and consumed in an electrolytic process for the
manufacture of chlorine.
(3) Kilowatt hours of electric power that are separately
metered and consumed in the manufacture of ferroalloy. As used
in this subdivision, the term "ferroalloy" means any of the
various alloys of iron and one or more other elements used as a
raw material in the production of steel but shall not include
electric power used in the production of steel.
(4) The full economic benefits provided to the taxpayer by
subdivisions (2) and (3) of this subsection shall be passed on to
the manufacturer of the chlorine or ferroalloy.
(c)
Credit. --
Any person taxable under subdivision (2),
subsection (a) of this section shall be allowed a credit against
the amount of tax due under that subdivision for any electric
power generation taxes paid by the taxpayer with respect to suchelectric power to the state in which such power was generated or
produced. The amount of credit allowed shall not exceed the tax
liability arising under subdivision (2), subsection (a) of this
section with respect to the sale of such power.
(d)
Transition rule. --
Beginning the first day of March,
one thousand nine hundred eighty-nine, electric light and power
companies shall determine their liability for payment of tax
under this section and sections two-d and two-m of this article.
If for taxable months beginning on or after the first day of
March, one thousand nine hundred eighty-nine, liability for tax
under this section is equal to or greater than the sum of the
power company's liability for payment of tax under subdivision
(3), subsection (a), section two-d and section two-m of this
article, then the company shall pay the tax due under this
section and not the tax due under subdivision (3), subsection
(a), section two-d and section two-m of this article. If tax
liability under this section is less, then tax shall be paid
under subdivision (3), subsection (a), section two-d and section
two-m of this article and the tax due under this section shall
not be paid. The provisions of this subsection shall expire and
become null and void for taxable years beginning on or after the
first day of January, one thousand nine hundred ninety-eight.
(e)
Effective date. --
The amendments to this section made
in the year one thousand nine hundred ninety shall take effect on
the first day of October, one thousand nine hundred ninety:
Provided,
That as to calendar months ending before such date, the
tax rates specified in this section, as then in effect, shall be
fully and completely preserved.