Senate Bill No. 753
(By Senators Oliverio, Fanning, Anderson, Ball, Bowman, Craigo,
Plymale, Ross, Sharpe, Buckalew, Kimble and Sprouse)
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[Originating in the Committee on Small Business;
reported March 2, 1998.]
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A BILL to amend and reenact sections nine-d and twenty, article
fifteen, chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; to amend and
reenact sections three-d and eleven, article fifteen-a of said
chapter; and to amend and reenact section seventy-four,
article twenty-one of said chapter, all relating to increasing
the minimum threshold amount of consumers sales and service
tax to be remitted before a vendor must file a monthly tax
return; providing a threshold amount for the annual filing of
direct pay consumers sales and service tax and use tax returns
and for the annual payment of tax; increasing the threshold
for annual filing and remittance of employer withholdings of
employee personal income tax; authorizing the filing of annual
state personal income tax withholdings in parallel with
federal reporting for domestic and household employees;
prescribing threshold amounts by promulgating rules; authorizing the tax commissioner to promulgate legislative
rules; and specifying effective dates.
Be it enacted by the Legislature of West Virginia:
That sections nine-d and twenty, article fifteen,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended and
reenacted; that sections three-d and eleven, article
fifteen-a of said chapter be amended and reenacted; and
that section seventy-four, article twenty-one of said
chapter be amended and reenacted, all to read as follows:
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
§11-15-9d. Direct pay permits.
(a) Notwithstanding any other provision of this
article, the tax commissioner may, pursuant to rules
promulgated by him or her in accordance with article
three, chapter twenty-nine-a of this code, authorize a
person that is a user, consumer, distributor or lessee to
which sales or leases of tangible personal property are
made or services provided, to pay any tax levied by this
article or article fifteen-a of this chapter directly to
the tax commissioner and waive the collection of the tax
by that person's vendor. No such authority shall be
granted or exercised except upon application to the tax
commissioner and after issuance by the tax commissioner of a direct pay permit. Each direct pay permit granted
pursuant to this section is valid until surrendered by the
holder or canceled for cause by the commissioner. The
commissioner shall prescribe by rules promulgated in
accordance with article three, chapter twenty-nine-a of
this code, those activities which will cause cancellation
of a direct pay permit issued pursuant to this section.
Upon issuance of a direct pay permit, payment of the tax
imposed or assertion of the exemptions allowed by this
article or article fifteen-a of this chapter on sales and
leases of tangible personal property and sales of taxable
services from the vendors of the personal property or
services shall be made directly to the tax commissioner by
the permit holder.
(b) On or before the fifteenth day of each month,
every permit holder shall make and file with the tax
commissioner a consumers sales and use tax direct pay
permit return for the preceding month in the form
prescribed by the tax commissioner showing the total value
of the tangible personal property used, the amount of
taxable services purchased, the amount of consumers sales
and use taxes due from the permit holder, which shall be
paid to the tax commissioner with the return, and such
other information as the tax commissioner considers necessary:
Provided, That if the amount of consumers sales
and use taxes due averages less than
one two hundred
dollars per month, the tax commissioner may permit the
filing of quarterly returns in lieu of monthly returns and
the amount of tax shown on the returns to be due shall be
remitted on or before the fifteenth day following the
close of the calendar quarter; and if the amount due
averages less than
fifty one hundred fifty dollars per
calendar quarter, the tax commissioner may permit the
filing of an annual direct pay permit return and the
amount of tax shown on the return to be due shall be
remitted on or before the last day of January each year
:
Provided, That the tax commissioner may, by nonemergency
legislative rules promulgated pursuant to chapter twenty- nine-a of this code, change the foregoing minimum amounts.
The tax commissioner, upon written request by the permit
holder, may grant a reasonable extension of time, upon
such terms as the tax commissioner may require, for the
making and filing of direct pay permit returns and paying
the tax due. Interest on the tax shall be chargeable on
every extended payment at the rate specified in section
seventeen, article ten of this chapter.
(c) A permit issued pursuant to this section is
valid until expiration of the taxpayers registration year under article twelve of this chapter. This permit shall
automatically be renewed when the taxpayers business
registration certificate is issued for the next succeeding
fiscal year, unless the permit is surrendered by the
holder or canceled for cause by the tax commissioner.
(d) Persons who hold a direct payment permit which
has not been canceled are not required to pay the tax to
the vendor as otherwise provided in this article or
article fifteen-a of this chapter. They shall notify each
vendor from whom tangible personal property is purchased
or leased or from whom services are purchased of their
direct payment permit number and that the tax is being
paid directly to the tax commissioner. Upon receipt of the
notice, the vendor is absolved from all duties and
liabilities imposed by this chapter for the collection and
remittance of the tax with respect to sales of tangible
personal property and sales of services to the permit
holder. Vendors who make sales upon which the tax is not
collected by reason of the provisions of this section
shall maintain records in such manner that the amount
involved and identity of each purchaser may be
ascertained.
(e) Upon the expiration, cancellation or surrender
of a direct payment permit, the provisions of this chapter, without regard to this section, shall thereafter
apply to the person who previously held the permit, and
that person shall promptly notify in writing vendors from
whom tangible personal property or services are purchased
or leased of the cancellation or surrender. Upon receipt
of the notice, the vendor is subject to the provisions of
this chapter, without regard to this section, with respect
to all sales, distributions, leases or storage of tangible
personal property, thereafter made to or for that person.
(f) The amendments to this section enacted in the
year one thousand nine hundred ninety-eight shall be
effective for tax years beginning on or after the first
day of January, one thousand nine hundred ninety-nine.
§11-15-20. Quarterly and annual returns.
(a) When the total
consumers sales and use tax
remittance for which a person is liable does not exceed
an
average monthly amount over the taxable year of fifty two
hundred fifty dollars
for any month, he may
pay such tax
and make a quarterly return on or before the fifteenth day
of the first month in the next succeeding quarter in lieu
of monthly returns
: Provided, That the tax commissioner
may, by nonemergency legislative rules promulgated
pursuant to chapter twenty-nine-a of this code, change the
foregoing minimum amount.
(b) When the total consumers sales and use tax
remittance for which a person is liable does not in the
aggregate exceed six hundred dollars for the taxable year,
he may pay such tax and make an annual return on or before
the fifteenth day of the first month next succeeding the
end of his taxable year: Provided, That the tax
commissioner may, by nonemergency legislative rules
promulgated pursuant to chapter twenty-nine-a of this
code, change the foregoing minimum amount.
(c) The amendments to this section enacted in the
year one thousand nine hundred ninety-eight shall be
effective for tax years beginning on or after the first
day of January, one thousand nine hundred ninety-nine.
ARTICLE 15A. USE TAX.
§11-15A-3d. Direct pay permits.
(a) Notwithstanding any other provision of this
article, the tax commissioner may, pursuant to rules
promulgated by him in accordance with article three,
chapter twenty-nine-a of this code, authorize a person (as
defined in section two of article fifteen) that is a user,
consumer, distributor or lessee to which sales or leases
of tangible personal property are made or services
provided to pay any tax levied by this article or article
fifteen of this chapter directly to the tax commissioner and waive the collection of the tax by that person's
vendor. No such authority shall be granted or exercised
except upon application to the tax commissioner and after
issuance by the tax commissioner of a direct pay permit.
Each direct pay permit granted pursuant to this section
shall continue to be valid until surrendered by the holder
or canceled for cause by the commissioner. The
commissioner shall prescribe by rules promulgated in
accordance with article three, chapter twenty-nine-a of
this code, those activities which will cause cancellation
of a direct pay permit issued pursuant to this section.
Upon issuance of such direct pay permit, payment of the
tax imposed or assertion of the exemptions allowed by this
article or article fifteen of this chapter on sales and
leases of tangible personal property and sales of taxable
services from the vendors thereof shall be made directly
to the tax commissioner by the permit holder.
(b) On or before the fifteenth day of each month,
every permit holder shall make and file with the tax
commissioner a consumers sales and use tax direct pay
permit return for the preceding month in the form
prescribed by the tax commissioner showing the total value
of the tangible personal property so used, the amount of
taxable services purchased, the amount of tax due from the permit holder, which amount shall be paid to the tax
commissioner with such return, and such other information
as the tax commissioner deems necessary:
Provided, That if
the amount of consumers sales and use taxes due averages
less than
one two hundred
fifty dollars per month, the tax
commissioner may permit the filing of quarterly returns in
lieu of monthly returns and the amount of tax shown
thereon to be due shall be remitted on or before the
fifteenth day following the close of the calendar quarter;
and if the amount due averages less than
fifty one hundred
fifty dollars per calendar quarter, the tax commissioner
may permit the filing of an annual direct pay permit
return and the amount of tax shown thereon to be due shall
be remitted on or before the last day of January each
year
: Provided, That the tax commissioner may, by
nonemergency legislative rules promulgated pursuant to
chapter twenty-nine-a of this code, change the foregoing
minimum amounts. The tax commissioner, upon written
request filed by the permit holder before the due date of
the return, may grant a reasonable extension of time, upon
such terms as the tax commissioner may require, for the
making and filing of direct pay permit returns and paying
the tax due. Interest on such tax shall be chargeable on
every such extended payment at the rate specified in section seventeen, article ten of this chapter.
(c) A permit issued pursuant to this section shall
continue to be valid until expiration of the taxpayer's
registration year under article twelve of this chapter.
This permit shall automatically be renewed when the
taxpayer's business registration certificate is issued for
the next succeeding fiscal year, unless the permit is
surrendered by the holder or canceled for cause by the tax
commissioner.
(d) Persons who hold a direct payment permit which
has not been canceled shall not be required to pay the tax
to the vendor as otherwise provided in this article or
article fifteen of this chapter. Such persons shall notify
each vendor from whom tangible personal property is
purchased or leased or from whom services are purchased of
their direct payment permit number and that the tax is
being paid directly to the tax commissioner. Upon receipt
of such notice, such vendor shall be absolved from all
duties and liabilities imposed by this chapter for the
collection and remittance of the tax with respect to
sales, distributions, leases or storage of tangible
personal property and sales of services to such permit
holder. Vendors who make sales upon which the tax is not
collected by reason of the provisions of this section shall maintain records in such manner that the amount
involved and identity of each such purchaser may be
ascertained.
(e) Upon the expiration, cancellation or surrender
of a direct payment permit, the provisions of this
chapter, without regard to this section, shall thereafter
apply to the person who previously held such permit, and
such person shall promptly so notify in writing vendors
from whom tangible personal property or services are
purchased of such cancellation or surrender. Upon receipt
of such notice, the vendor shall be subject to the
provisions of this chapter, without regard to this
section, with respect to all sales of tangible personal
property or taxable services, thereafter made to or for
such person.
(f) The amendments to this section enacted in the
year one thousand nine hundred ninety-eight shall be
effective for tax years beginning on or after the first
day of January, one thousand nine hundred ninety-nine.
§11-15A-11. Liability of user.
(a) Any person who uses any tangible personal
property upon which the tax herein imposed has not been
paid either to a retailer or direct to the tax
commissioner as herein provided, shall be liable therefor, and
persons required by law to hold a West Virginia
business registration certificate shall on or before the
fifteenth day of the month next succeeding each quarterly
period pay the tax herein imposed upon all such property
used by him during the preceding quarterly period in such
manner and accompanied by such returns as the tax
commissioner shall prescribe:
Provided, That if the
aggregate annual tax liability of such persons under this
article is six hundred dollars or less, such persons
shall, in lieu of the quarterly payment and filing, pay
the tax on or before the fifteenth day of the first month
next succeeding the end of his taxable year, and shall
file such annual return as may be prescribed by the tax
commissioner. The tax commissioner may, by nonemergency
legislative rules promulgated pursuant to chapter twenty- nine-a of this code, change the foregoing minimum amounts.
(b) Any individual who is not required by law to hold
a West Virginia business registration certificate, who
uses any tangible personal property or taxable service
upon which the West Virginia use tax has not been paid
either to a retailer or directly to the tax commissioner
shall be liable for the West Virginia use tax upon such
property or taxable services, and, notwithstanding the
amount of the annual aggregate annual tax liability, shall pay the use tax imposed upon all such property or taxable
services used by him during the taxpayer's federal taxable
year on or before the fifteenth day of April of the
taxpayer's next succeeding federal tax year, and shall
file such annual return therewith as the tax commissioner
may authorize or require.
(c) All of the provisions of section ten of this
article with reference to
such quarterly or annual returns
and payments shall be applicable to the returns and
payments
herein required
under this section.
(d) The amendments to this section enacted in the
year one thousand nine hundred ninety-eight shall be
effective for tax years beginning on or after the first
day of January, one thousand nine hundred ninety-nine.
ARTICLE 21. PERSONAL INCOME TAX.
§11-21-74. Employer's return and payment of withheld
taxes.
(a)
General. -- Every employer required to deduct
and withhold tax under this article shall, for each
calendar quarter, on or before the last day of the month
following the close of such calendar quarter, file a
withholding return as prescribed by the tax commissioner
and pay over to the tax commissioner the taxes so required
to be deducted and withheld. Where the
aggregate average quarterly amount so deducted and withheld by any employer
is less than
twenty-five one hundred fifty dollars
in a
calendar quarter, and the aggregate for the calendar year
can reasonably be expected to be less than
one six hundred
dollars, the tax commissioner may by regulation permit an
employer to file an annual return and pay over to the tax
commissioner the taxes deducted and withheld on or before
the last day of the month following the close of such
calendar year
: Provided, That the tax commissioner may, by
nonemergency legislative rules promulgated pursuant to
chapter twenty-nine-a of this code, change the foregoing
minimum amounts. The tax commissioner may, if he believes
such action necessary for the protection of the revenues,
require any employer to make such return and pay to him
the tax deducted and withheld at any time, or from time to
time.
(b)
Monthly returns and payments of withheld tax on
and after June 1, 1971. -- Notwithstanding the provisions
of subsection (a) of this section, on and after the first
day of June, one thousand nine hundred seventy-one, every
employer required to deduct and withhold tax under this
article shall, for each of the first eleven months of the
calendar year, on or before the twentieth day of the
succeeding month and for the last calendar month of the year, on or before the last day of the succeeding month,
file a withholding return as prescribed by the tax
commissioner and pay over to the tax commissioner the
taxes so required to be deducted and withheld, if such
withheld taxes aggregate
one hundred twenty-five two
hundred
fifty dollars or more for such month; except any
employer with respect to whom the tax commissioner may
have by regulation provided otherwise in accordance with
the provisions of subsection (a) of this section
:
Provided, That in accordance with regulations promulgated
by the tax commissioner, a payment of withheld tax may be
subject to the credit set forth in section nine-b, article
fifteen of this chapter and the credit set forth in
section three-b, article fifteen-a of this chapter.
(c) Employers of domestic and household employees
whose withholdings of federal income tax are annually paid
and reported by the employer pursuant to the filing of
Schedule H of federal form 1040, 1040A, 1040NR, 1040NR-EZ,
1040-SS or 1041 may, on or before the thirty-first day of
January next succeeding the end of the calendar year for
which withholdings are deducted and withheld, file an
annual withholding return with the tax commissioner and
annually remit to the tax commissioner West Virginia
personal income taxes deducted and withheld for such employees. The tax commissioner may promulgate legislative
or other rules pursuant to chapter twenty-nine-a of this
code for implementation of this subsection.
(c)(d) Deposit in trust for tax commissioner. --
Whenever any employer fails to collect, truthfully account
for, or pay over the tax, or to make returns of the tax as
required in this section, the tax commissioner may serve
a notice requiring such employer to collect the taxes
which become collectible after service of such notice, to
deposit such taxes in a bank approved by the tax
commissioner, in a separate account, in trust for and
payable to the tax commissioner, and to keep the amount of
such tax in such account until payment over to the tax
commissioner. Such notice shall remain in effect until a
notice of cancellation is served by the tax commissioner.
(d) (e) Accelerated payment.
(1) Notwithstanding the provisions of subsections (a)
and (b) of this section, for calendar years beginning
after the thirty-first day of December, one thousand nine
hundred ninety, every employer required to deduct and
withhold tax whose average payment per calendar month for
the preceding calendar year under subsection (b) of this
section exceeded one hundred thousand dollars shall remit
the tax attributable to the first fifteen days of June each year on or before the twenty-third day of said month
of June.
(2) For purposes of complying with subdivision (1) of
this subsection
(d), the employer shall remit an amount
equal to the withholding tax due under this article on
employee compensation subject to withholding tax payable
or paid to employees for the first fifteen days of June
or, at the employer's election, the employer may remit an
amount equal to fifty percent of the employer's liability
for withholding tax under this article on compensation
payable or paid to employees for the preceding month of
May.
(3) For an employer which has not been in business
for a full calendar year, the total amount the employer
was required to deduct and withhold under subsection (b)
for such prior calendar year shall be divided by the
number of months, including fractions of a month, that it
was in business during such prior calendar year, and if
that amount exceeds one hundred thousand dollars, the
employer shall remit the tax attributable to the first
fifteen days of June each year on or before the twenty- third day of said month of June, as provided in
subdivision (2) of this subsection
(d).
(4) When an employer required to make an advanced payment of withholding tax under subdivision (1) of this
subsection
(d) makes out its return for the month of June,
which is due on the twentieth day of July, such employer
may claim as a credit against its liability under this
article for tax on employee compensation paid or payable
for employee services rendered during the month of June
the amount of the advanced payment of tax made under
subdivision (1) of this subsection
(d).
(f) The amendments to this section enacted in the
year one thousand nine hundred ninety-eight shall be
effective for tax years beginning on or after the first
day of January, one thousand nine hundred ninety-nine.
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(Note: The purpose of this bill is to increase the
threshold amount for the remittance of consumers sales and
service tax and use tax on a quarterly basis (rather than
a monthly basis), to provide a threshold amount for the
filing of direct pay consumers sales and service tax and
use tax returns and for the payment of tax on an annual
basis (rather than a quarterly basis), and to increase the
threshold amount of personal income tax withholdings
required in order for the employer to be obligated to
remit withholdings on a quarterly basis (rather than a
monthly basis). The bill also authorizes the filing of
annual state personal income tax withholdings in parallel
with federal reporting for domestic and household
employees. The bill authorizes the Tax Commissioner to
prescribe the threshold amounts by legislative regulation.
Strike-throughs indicate language that would be
stricken from the present law, and underscoring indicates
new language that would be added.)