H. B. 2270
(By Delegates Kiss, (By Request) and Rowe, Mezzatesta,
Martin, Staton, Ashley and Faircloth)
[Introduced January 27, 1995; referred to the
Committee on the Judiciary then Finance.]
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, assessing and
collecting tax; method of determining market value and tax
of dealer inventory; reporting market value; escrow; payment
of tax; legislative intent; severability; 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, ASSESSING AND
COLLECTING TAX LEVIED UPON DEALER VEHICLE
INVENTORY.
§11-6C-1. Inventory included within scope of article.
The provisions of this article apply to inventory that:
(1) Is held for sale or lease, or both, by new or used vehicle
dealers licensed under the provisions of article six, chapter
seventeen-a of this code; and (2) consists of individual units of
personal new or used property, each unit of which, when sold to
a retail purchaser, is required, by law, to be titled in the name
of the retail purchaser and registered with the division of
motor vehicles. For purposes of this article, inventory subject
to the provisions of this article are denoted "dealer vehicle
inventory."
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.
§11-6C-2. Method for determining market value of dealer vehicle
inventory.
For purposes of appraisal, the market value of dealer
vehicle inventory shall be calculated as of the first day of July
of each year. For any dealer who made sales during the entire
preceding twelve-month period, the market value shall be the
total annual sales of the inventory made during the preceding
year, divided by twelve. For any dealer not in business during
the entire preceding twelve-month period, the assessor shall
estimate the market value of the inventory based on data which
may be available to the assessor:
Provided, That the assessor
shall extrapolate estimates using sales data which may be
available and reliable when sales are made for a period of three
months or more during the prior year. In all cases, the market
value, so derived, shall serve as the basis for calculating the
assessed value.
§11-6C-3. Owner to file return estimating market value.
The owner of dealer vehicle inventory shall report the
market value of the inventory, derived as set forth in section
two of this article, to the assessor, as a part of the return
required by this chapter.
§11-6C-4. Owner to assign, collect and escrow estimated vehicle
inventory tax at the time of sale.
Each owner of dealer vehicle inventory shall establish an
escrow account for the benefit of the levying bodies. The escrow
account shall be established pursuant to an agreement with a
financial institution authorized to do business in this state.
Beginning the first day of January of each year, the owner
shall, when any unit is sold: (1) Assign as property tax
applicable to the unit an amount equal to sixty percent of the
sale price times the estimated unit property tax factor; and (2)
pay that amount into an escrow account. The estimated unit
property tax factor shall be calculated by dividing the most
recent county aggregate tax levy rate by twelve. For purposes of
this subsection, the most recent county aggregate tax rate shall
be the total combined levy rates established by law and
applicable to owners of similarly situated property in the same
county for the prior tax year. Any interest earned on the escrow
account shall remain in the escrow account and be paid over to
the sheriff when he or she collects the tax due on dealer vehicle
inventory. The assigned amount of tax to be escrowed shall be
collected from the purchaser of each unit and disclosed to the purchaser at the time of sale as a separate item on each sales
contract and retail installment agreement.
§11-6C-5. Determination of tax on dealer vehicle inventory.
The amount of tax levied upon the dealer vehicle inventory
pursuant to article eight of this chapter shall be based upon an
assessed value equal to sixty percent of the market value, as
determined pursuant to this article.
§11-6C-6. Payment of tax.
Upon receipt of tax tickets or other statements of ad
valorem tax due with regard to dealer vehicle inventory, the
dealer shall pay over to the sheriff the total estimated tax then
held in escrow, plus the difference, if any, between the tax due
for the relevant period and the amount paid from the escrow
account. Except in cases of voided transactions, dealer refunds,
mistakes and clerical errors, no dealer or purchaser may be
entitled to recover any moneys held in escrow.
§11-6C-7. Intent of this article; severability; 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.
Accordingly, the Legislature finds and declares that the adoption
of this article will: (1) Provide a more reliable and uniform
method of determining market value of dealer vehicle inventory;
(2) minimize audit problems associated with such property;
(3) provide a predictable revenue stream for levying bodies;
(4) maximize the owner's ability to manage inventory; (5) provide
for an efficient method of payment of taxes due; and (6) disclose
to purchasers the inventory tax on a unit of dealer vehicle
inventory, at the time of sale.
(b) The provisions of this article shall not be severable,
it being the intent of the Legislature that the provisions hereof
are so interrelated as to constitute a single object of
legislative purpose.
(c) The tax commissioner may promulgate rules as may be
necessary to implement the provisions of this article.
NOTE: The purpose of this bill is to provide for uniform
appraisal, assessment and collection of property taxes levied on
vehicles in inventory held for sale by new and used vehicle
dealers.
This article is new; therefore, strike-throughs and
underscoring have been omitted.
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