WEST virginia legislature
2019 regular session
Introduced
House Bill 2819
By Delegates Householder and
Criss
[By Request of the West Virginia State Tax Division]
[Introduced February 1,
2019; Referred
to the Committee on Finance.]
A BILL to amend and reenact §11-12-19 of the Code of West Virginia, 1931, as amended; and to amend and reenact §11-15-8b of said code, all relating generally to contractors; defining certain terms; clarifying business registration requirements in case of both nonresident contractors and nonresident subcontractors; clarifying bonding requirements in case of both nonresident contractors and nonresident subcontractors for purposes of consumers sales and service and use taxes, and including municipal consumers sales and use taxes and special district excise tax within bonding specifications, as applicable.
Be it enacted by the Legislature of West Virginia:
ARTICLE 12. BUSINESS REGISTRATION TAX.
§11-12-19. Contractors and subcontractors.
(a) General. --
Every person who engages in this state in any contracting business or activity
shall have a copy of his or her business registration certificate
available at every construction site in this state until his or her work
at such the site is completed.
(b) Definitions. -- For purposes of this section:
(1) “Contracting business
or activity” means and includes the furnishing of work, or both work and
materials for the erecting, building, constructing, altering, repairing,
removing or demolishing of any road, bridge, pipeline, dam, building or
other structure, or other improvement appurtenant to any such road, bridge,
pipeline, dam, building or other structure, or for altering, improving or
developing of property, under and by virtue of a contract with the owner for an
agreed lump sum or upon any other basis of settlement and payment agreed to by
the parties, whether such the contract be is an
oral agreement or in writing. The term “contracting business or activity” shall
also include includes the furnishing of work or both work and
materials or equipment under and by virtue of a subcontract with a general
contractor for an agreed contract price, or by day, or by piece, or by other
basis of payment agreed to by parties, whether such the contract be
is an oral agreement or in writing. Notwithstanding any provision of
this code to the contrary, for purposes of §11-12-1 et seq., §11-15-1 et
seq., and §11-15A-1 et seq. of this code, contracting activity
includes an infrastructure development and maintenance project regardless of
how the project is treated under generally accepted accounting principles.
(2) “Contractor” “or construction contractor” means every person, including a subcontractor, who agrees by a written or oral contract to engage in contracting activity.
(3) “Construction site” means the area in which the contractor is working or beginning to work when engaging in contracting activity.
(4) “Infrastructure development and maintenance project” means a project in this state the purpose of which is to construct, improve, maintain, repair or otherwise extend the useful life of new or existing infrastructure facilities. For purposes of this article, “infrastructure facility” means, but is not limited to, transportation, communication, sewage, water and electric systems, pipelines, roads, bridges, related facilities and other public improvements owned by the state or any county, county board of education, municipality or public corporation created by any of the preceding entities.
(5) “Nonresident contractor” means a construction contractor, or subcontractor, who is not a resident contractor.
(6) “Principal place of business” means the place where the business’s officers or management employees direct, control, and coordinate the activities of the business.
(7) “Prime or general contractor” includes: (A) Any person who contracts with the owner, lessee or other person having authority to enter into a contract involving the premises or property that is the subject matter of the contract, to perform services or furnish materials, or both, for the construction, alteration or improvement of any real property or project; or (B) any person who owns or leases real estate for the purpose of developing the real estate other than for his or her own occupancy, and who, in the development of the real estate, contracts, alters or makes improvements on the real estate.
(8) “Resident contractor” means a construction contractor, or subcontractor, as the case may be, who owns, or leases, real property located in this state that is continuously used by the construction contractor, or subcontractor, as an office, warehouse, store, factory, or other regular and permanent place of business in this state and who maintains a permanent work force of three or more employees who are residents of this state. For purposes of this definition, a temporary office, building, storage site, or facility at the site of a construction project is not real property continuously used as an office, warehouse, store, factory, or other regular place of business in this state.
(9) “Subcontractor” means a person who is engaged in contracting and who contracts with a prime contractor, or general contractor, to perform all or any part of the contract of the prime contractor, or general contractor, or who contracts with a subcontractor who has contracted to perform any part of the contract entered into by the prime contractor, or general contractor.
(c) Penalty for failure to
have available. -- In addition to other penalties provided by law, any
contractor, or subcontractor, who fails to have available at the
construction site during the time he or she is furnishing or
performing contracting activity at such the site, his or
her business registration certificate or a copy thereof, shall is
not be entitled to enforce the mechanics' lien created by §38-2-1 or
§38-2-2 of this code, for contracting or relating to activity provided
by him or her at such the construction site.
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
§11-15-8b. Nonresident contractor--registration, bond, etc.
(a) Eve0ry nonresident contractor and every nonresident subcontractor shall register with the Tax Commissioner as provided in §11-12-1 et seq. of this code prior to engaging in the performance of a contract or subcontract in this state.
(b) (1) At the time of
registration, the contractor or subcontractor, as the case may be, shall
deposit with the Tax Commissioner six seven percent of the amount
the nonresident contractor, or nonresident subcontractor, as the case
may be, is to receive for the performance of the contract, or
subcontract, which deposit shall be held within a Contractors Use
Tax Fund pending the completion of the contract, or subcontract, and pending
the determination of the taxes due this state under this article and §11-15A-1 et
seq. of this code, because of such and any municipal consumers
sales and use tax imposed under §8-13C-1 et seq. or §8-1-5a of this code, and any special district excise tax imposed under §7-22-1 et seq. or §8-38-1 et
seq. of this code due on
purchases and uses of tangible personal property and services relating to the contract, or subcontract, and the payment of
the tax taxes due.
(2) In lieu of the deposit,
the nonresident contractor, or nonresident subcontractor may
provide a corporate surety bond to be approved by the Tax Commissioner as to
form, sufficiency, value, amount, stability, and other features necessary to
provide a guarantee of payment of the compensating tax due this state taxes
due under the provisions subdivision (1) of this subsection.
(c) In addition, within 30 days
after registration, under this section, the every nonresident contractor
and every nonresident subcontractor, as the case may be, shall file a
statement with the Tax Commissioner itemizing the machinery, materials,
supplies, and equipment that he or she has or will have on hand at the
time he or she begins the fulfillment of the contract, including where such
the tangible personal property has been brought, shipped, or transported
from outside this state upon which neither the tax imposed by this article nor §11-15A-1
et seq. of this code has been paid, and shall pay the tax due thereon at
the time of filing the statement and thereafter shall report and pay the
taxes as required by this article and §11-15A-1 et seq. of this code, and
any other taxes due under the aforementioned provisions.
NOTE: The purpose of this bill is to amend §11-12-19 of the code so as to expressly clarify that fact that business registration requirements apply to both nonresident contractors and nonresident subcontractors, and to amend §11-15-8b of the code so that the requirement to post bond applies to both nonresident contractors and nonresident subcontractors, and to specifically include within the bonding requirement, municipal consumers sales and service tax and use tax, special district excise tax, as applicable.
Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.