H. B. 2999
(By Delegates White, Campbell, Kominar,
Doyle and Carmichael)
[Introduced March 9, 2009; referred to the
Committee on Finance.]
A BILL to amend and reenact §11-15B-2, §11-15B-21, §11-15B-24,
§11-15B-28 and §11-15B-32 of the Code of West Virginia, 1931,
as amended, all relating to the Streamlined Sales and Use Tax
Agreement and the West Virginia consumers sales and service
tax and use tax; adding new definition; providing relief from
liability in specified circumstances; providing administrative
exemptions; specifying the requirements of certified service
providers; and specifying the effective date.
Be it enacted by the Legislature of West Virginia:
That §11-15B-2, §11-15B-21, §11-15B-24, §11-15B-28 and
§11-15B-32 of the Code of West Virginia, 1931, as amended, be
amended and reenacted, all to read as follows:
ARTICLE 15B. STREAMLINED SALES AND USE TAX ADMINISTRATION ACT.
§11-15B-2. Definitions.
(a) General. -- When used in this article and articles fifteen and fifteen-a of this chapter, words defined in subsection (b) of
this section
shall have the meanings ascribed to them in this
section, except in those instances where a different meaning is
distinctly expressed or the context in which the term is used
clearly indicates that a different meaning is intended by the Legislature.
(b)
Terms defined. --
(1) "Agent" means a person appointed by a seller to represent
the seller before the member states.
(2) "Agreement" means the Streamlined Sales and Use Tax
Agreement as defined in section two-a of this article.
(3) "Alcoholic beverages" means beverages that are suitable
for human consumption and contain one half of one percent or more
of alcohol by volume.
(4) "Bundled transaction" means the retail sale of two or more
products, except real property and services to real property,
where: (i) The products are otherwise distinct and identifiable;
and (ii) the products are sold for one nonitemized price. A
"bundled transaction" does not include the sale of any products in
which the "sales price" varies, or is negotiable, based on the
selection by the purchaser of the products included in the transaction.
(A) "Distinct and identifiable products" does not include:
(i) Packaging such as containers, boxes, sacks, bags and
bottles or other materials such as wrapping, labels, tags and
instruction guides that accompany the "retail sale" of the products and are incidental or immaterial to the "retail sale" thereof.
Examples of packaging that are incidental or immaterial include
grocery sacks, shoe boxes, dry cleaning garment bags and express
delivery envelopes and boxes;
(ii) A product provided free of charge with the required
purchase of another product. A product is "provided free of
charge" if the "sales price" of the product purchased does not vary
depending on the inclusion of the product "provided free of
charge"; or
(iii) Items included in the member state's definition of
"sales price", as defined in this section.
(B) The term "one nonitemized price" does not include a price
that is separately identified by product on binding sales or other
supporting sales-related documentation made available to the
customer in paper or electronic form including, but not limited to,
an invoice, bill of sale, receipt, contract, service agreement,
lease agreement, periodic notice of rates and services, rate card
or price list.
(C) A transaction that otherwise meets the definition of a
"bundled transaction", as defined in this subdivision, is not a
"bundled transaction" if it is:
(i) The "retail sale" of tangible personal property and a
service where the tangible personal property is essential to the
use of the service and is provided exclusively in connection with the service and the true object of the transaction is the service;
or
(ii) The "retail sale" of services where one service is
provided that is essential to the use or receipt of a second
service and the first service is provided exclusively in connection
with the second service and the true object of the transaction is
the second service; or
(iii) A transaction that includes taxable products and
nontaxable products and the "purchase price" or "sales price" of
the taxable products is de minimis.
(I) "De minimis" means the seller's "purchase price" or "sales
price" of the taxable products is ten percent or less of the total
"purchase price" or "sales price" of the bundled products.
(II) Sellers shall use either the "purchase price" or the
"sales price" of the products to determine if the taxable products
are de minimis. Sellers may not use a combination of the "purchase
price" and "sales price" of the products to determine if the
taxable products are de minimis.
(III) Sellers shall use the full term of a service contract to
determine if the taxable products are de minimis; or
(iv) A transaction that includes products taxable at the
general rate of tax and food or food ingredients taxable at a lower
rate of tax and the "purchase price" or "sales price" of the
products taxable at the general sales tax rate is de minimis. For purposes of this subparagraph, the term "de minimis" has the same
meaning as ascribed to it under subparagraph (iii) of this paragraph.
(v) The "retail sale" of exempt tangible personal property, or
food and food ingredients taxable at a lower rate of tax, and
tangible personal property taxable at the general rate of tax where:
(I) The transaction includes "food and food ingredients",
"drugs", "durable medical equipment", "mobility-enhancing
equipment", "over-the-counter drugs", "prosthetic devices" or
medical supplies, all as defined in this article ; and
(II) Where the seller's "purchase price" or "sales price" of
the taxable tangible personal property taxable at the general rate
of tax is fifty percent or less of the total "purchase price" or
"sales price" of the bundled tangible personal property. Sellers
may not use a combination of the "purchase price" and "sales price"
of the tangible personal property when making the fifty percent
determination for a transaction.
(5) "Candy" means a preparation of sugar, honey or other
natural or artificial sweeteners in combination with chocolate,
fruits, nuts or other ingredients or flavorings in the form of
bars, drops or pieces. "Candy"
shall does not include any
preparation containing flour and
shall require requires no refrigeration.
(6) "Clothing" means all human wearing apparel suitable for
general use. The following list contains examples and is not
intended to be an all-inclusive list.(A) "Clothing"
shall include includes:
(i) Aprons, household and shop;
(ii) Athletic supporters;
(iii) Baby receiving blankets;
(iv) Bathing suits and caps;
(v) Beach capes and coats;
(vi) Belts and suspenders;
(vii) Boots;
(viii) Coats and jackets;
(ix) Costumes;
(x) Diapers, children and adult, including disposable diapers;
(xi) Ear muffs;
(xii) Footlets;
(xiii) Formal wear;
(xiv) Garters and garter belts;
(xv) Girdles;
(xvi) Gloves and mittens for general use;
(xvii) Hats and caps;
(xviii) Hosiery;
(xix) Insoles for shoes;
(xx) Lab coats;
(xxi) Neckties;
(xxii) Overshoes;
(xxiii) Pantyhose;(xxiv) Rainwear;
(xxv) Rubber pants;
(xxvi) Sandals;
(xxvii) Scarves;
(xxviii) Shoes and shoe laces;
(xxix) Slippers;
(xxx) Sneakers;
(xxxi) Socks and stockings;
(xxxii) Steel-toed shoes;
(xxxiii) Underwear;
(xxxiv) Uniforms, athletic and nonathletic; and
(xxxv) Wedding apparel.
(B) "Clothing"
shall does not include:
(i) Belt buckles sold separately;
(ii) Costume masks sold separately;
(iii) Patches and emblems sold separately;
(iv) Sewing equipment and supplies including, but not limited
to, knitting needles, patterns, pins, scissors, sewing machines,
sewing needles, tape measures and thimbles; and
(v) Sewing materials that become part of "clothing" including,
but not limited to, buttons, fabric, lace, thread, yarn and zippers.
(7) "Clothing accessories or equipment" means incidental items
worn on the person or in conjunction with "clothing". "Clothing
accessories or equipment" are mutually exclusive of and may be taxed differently than apparel within the definition of "clothing",
"sport or recreational equipment" and "protective equipment". The
following list contains examples and is not intended to be an
all-inclusive list. "Clothing accessories or equipment"
shall
include includes:
(a) Briefcases;
(b) Cosmetics;
(c) Hair notions, including, but not limited to, barrettes,
hair bows and hair nets;
(d) Handbags;
(e) Handkerchiefs;
(f) Jewelry;
(g) Sunglasses, nonprescription;
(h) Umbrellas;
(i) Wallets;
(j) Watches; and
(k) Wigs and hair pieces.
(8) "Certified automated system" or "CAS" means software
certified under the agreement to calculate the tax imposed by each
jurisdiction on a transaction, determine the amount of tax to remit
to the appropriate state and maintain a record of the transaction.
(9) "Certified service provider" or "CSP" means an agent
certified under the agreement to perform all of the seller's sales
and use tax functions other than the seller's obligation to remit tax on its own purchases.
(10) "Computer" means an electronic device that accepts
information in digital or similar form and manipulates the
information for a result based on a sequence of instructions.
(11) "Computer software" means a set of coded instructions
designed to cause a "computer" or automatic data processing
equipment to perform a task.
(12) "Delivered" means delivered to the purchaser by means
other than tangible storage media.
(13) "Delivery charges" means charges by the seller of
personal property or services for preparation and delivery to a
location designated by the purchaser of personal property or
services including, but not limited to, transportation, shipping,
postage, handling, crating and packing.
(14) "Dietary supplement" means any product, other than
"tobacco", intended to supplement the diet that:
(A) Contains one or more of the following dietary ingredients:
(i) A vitamin;
(ii) A mineral;
(iii) An herb or other botanical;
(iv) An amino acid;
(v) A dietary substance for use by humans to supplement the
diet by increasing the total dietary intake; or
(vi) A concentrate, metabolite, constituent, extract or combination of any ingredient described in subparagraph (i) through
(v), inclusive, of this paragraph;
(B) And is intended for ingestion in tablet, capsule, powder,
softgel, gelcap or liquid form, or if not intended for ingestion in
such a form, is not represented as conventional food and is not
represented for use as a sole item of a meal or of the diet; and
(C) Is required to be labeled as a dietary supplement,
identifiable by the "Supplemental Facts" box found on the label as
required pursuant to 21 CFR §101.36 or in any successor section of
the Code of Federal Regulations.
(15) "Direct mail" means printed material delivered or
distributed by United States mail or other delivery service to a
mass audience or to addressees on a mailing list provided by the
purchaser or at the direction of the purchaser when the cost of the
items are not billed directly to the recipients. "Direct mail"
includes tangible personal property supplied directly or indirectly
by the purchaser to the direct mail seller for inclusion in the
package containing the printed material. "Direct mail" does not
include multiple items of printed material delivered to a single address.
(16) "Drug" means a compound, substance or preparation, and
any component of a compound, substance or preparation, other than
food and food ingredients, dietary supplements or alcoholic beverages:
(A) Recognized in the official United States Pharmacopoeia,
official Homeopathic Pharmacopoeia of the United States or official National Formulary, and supplement to any of them;
(B) Intended for use in the diagnosis, cure, mitigation,
treatment or prevention of disease in humans; or
(C) Intended to affect the structure or any function of the
human body.
(17) "Durable medical equipment" means equipment including
repair and replacement parts for the equipment, but does not
include "mobility-enhancing equipment", which:
(A) Can withstand repeated use;
(B) Is primarily and customarily used to serve a medical purpose;
(C) Generally is not useful to a person in the absence of
illness or injury; and
(D) Is not worn in or on the body.
(18) "Electronic" means relating to technology having
electrical, digital, magnetic, wireless, optical, electromagnetic
or similar capabilities.
(19) "Eligible property" means an item of a type, such as
clothing, that qualifies for a sales tax holiday exemption in this
state.
(20) "Energy Star qualified product" means a product that
meets the energy efficient guidelines set by the United States
Environmental Protection Agency and the United States Department of
Energy that are authorized to carry the Energy Star label. Covered
products are those listed at www.energystar.gov or successor address.(21) "Entity-based exemption" means an exemption based on who
purchases the product or service or who sells the product or
service. An exemption that is available to all individuals
shall
not be considered is not an entity-based exemption.
(22) "Food and food ingredients" means substances, whether in
liquid, concentrated, solid, frozen, dried or dehydrated form, that
are sold for ingestion or chewing by humans and are consumed for
their taste or nutritional value. "Food and food ingredients" does
not include alcoholic beverages, prepared food or tobacco.
(23) "Food sold through vending machines" means food dispensed
from a machine or other mechanical device that accepts payment.
(24) "Fur clothing" means "clothing" that is required to be
labeled as a fur product under the Federal Fur Products Labeling
Act (15 U.S.C. §69) and the value of the fur components in the
product is more than three times the value of the next most
valuable tangible component. "Fur clothing" is human-wearing
apparel suitable for general use but may be taxed differently from
"clothing". For the purposes of the definition of "fur clothing",
the term "fur" means any animal skin or part thereof with hair,
fleece or fur fibers attached thereto, either in its raw or
processed state, but
shall does not include
such skins that have
been converted into leather or suede, or which in processing, the
hair, fleece or fur fiber has been completely removed.
(25) "Governing board" means the governing board of the Streamlined Sales and Use Tax Agreement.
(26) "Grooming and hygiene products" are soaps and cleaning
solutions, shampoo, toothpaste, mouthwash, antiperspirants and sun
tan lotions and screens, regardless of whether the items meet the
definition of "over-the-counter drugs".
(27) "Includes" and "including" when used in a definition
contained in this article is not considered to exclude other things
otherwise within the meaning of the term being defined.
(28) "Layaway sale" means a transaction in which property is
set aside for future delivery to a customer who makes a deposit,
agrees to pay the balance of the purchase price over a period of
time and, at the end of the payment period, receives the property.
An order is accepted for layaway by the seller when the seller
removes the property from normal inventory or clearly identifies
the property as sold to the purchaser.
(29) "Lease" includes rental, hire and license. "Lease" means
any transfer of possession or control of tangible personal property
for a fixed or indeterminate term for consideration. A lease or
rental may include future options to purchase or extend.
(A) "Lease" does not include:
(i) A transfer of possession or control of property under a
security agreement or deferred payment plan that requires the
transfer of title upon completion of the required payments;
(ii) A transfer or possession or control of property under an agreement that requires the transfer of title upon completion of
required payments and payment of an option price does not exceed
the greater of $100 or one percent of the total required payments;
or
(iii) Providing tangible personal property along with an
operator for a fixed or indeterminate period of time. A condition
of this exclusion is that the operator is necessary for the
equipment to perform as designed. For the purpose of this
subparagraph, an operator must do more than maintain, inspect or
set-up the tangible personal property.
(iv) "Lease" or "rental" includes agreements covering motor
vehicles and trailers where the amount of consideration may be
increased or decreased by reference to the amount realized upon
sale or disposition of the property as defined in 26 U. S. C. 7701(h)(1).
(B) This definition shall be used for sales and use tax
purposes regardless if a transaction is characterized as a lease or
rental under generally accepted accounting principles, the Internal
Revenue Code, the Uniform Commercial Code or other provisions of
federal, state or local law.
(30) "Load and leave" means delivery to the purchaser by use
of a tangible storage media where the tangible storage media is not
physically transferred to the purchaser.
(31) "Mobility-enhancing equipment" means equipment, including
repair and replacement parts to the equipment, but does not include "durable medical equipment", which:
(A) Is primarily and customarily used to provide or increase
the ability to move from one place to another and which is
appropriate for use either in a home or a motor vehicle;
(B) Is not generally used by persons with normal mobility; and
(C) Does not include any motor vehicle or equipment on a motor
vehicle normally provided by a motor vehicle manufacturer.
(32) "Model I seller" means a seller that has selected a
certified service provider as its agent to perform all the seller's
sales and use tax functions, other than the seller's obligation to
remit tax on its own purchases.
(33) "Model II seller" means a seller that has selected a
certified automated system to perform part of its sales and use tax
functions, but retains responsibility for remitting the tax.
(34) "Model III seller" means a seller that has sales in at
least five member states, has total annual sales revenue of at
least $500 million, has a proprietary system that calculates the
amount of tax due each jurisdiction and has entered into a
performance agreement with the member states that establishes a tax
performance standard for the seller. As used in this definition,
a seller includes an affiliated group of sellers using the same
proprietary system.
(35) "Over-the-counter drug" means a drug that contains a
label that identifies the product as a drug as required by 21 CFR §201.66. The "over-the-counter drug" label includes:
(A) A "drug facts" panel; or
(B) A statement of the "active ingredient(s)" with a list of
those ingredients contained in the compound, substance or preparation.
(36) "Person" means an individual, trust, estate, fiduciary,
partnership, limited liability company, limited liability
partnership, corporation or any other legal entity.
(37) "Personal service" includes those:
(A) Compensated by the payment of wages in the ordinary course
of employment; and
(B) Rendered to the person of an individual without, at the
same time, selling tangible personal property, such as nursing,
barbering, manicuring and similar services.
(38) (A) "Prepared food" means:
(i) Food sold in a heated state or heated by the seller;
(ii) Two or more food ingredients mixed or combined by the
seller for sale as a single item; or
(iii) Food sold with eating utensils provided by the seller,
including plates, knives, forks, spoons, glasses, cups, napkins or
straws. A plate does not include a container or packaging used to
transport the food.
(B) "Prepared food" in subparagraph (ii), paragraph (A) of
this subdivision does not include food that is only cut, repackaged
or pasteurized by the seller, and eggs, fish, meat, poultry and foods containing these raw animal foods requiring cooking by the
consumer as recommended by the Food and Drug Administration in
Chapter 3, Part 401.11 of its Food Code of 2001 so as to prevent
food-borne illnesses.
(C) Additionally, "prepared food" as defined in this
subdivision does not include:
(i) Food sold by a seller whose proper primary NAICS
classification is manufacturing in Sector 311, except Subsection
3118 (bakeries);
(ii) Food sold in an unheated state by weight or volume as a
single item; or
(iii) Bakery items, including bread, rolls, buns, biscuits,
bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies,
tarts, muffins, bars, cookies, tortillas.
(39) "Prescription" means an order, formula or recipe issued
in any form of oral, written, electronic or other means of
transmission by a duly licensed practitioner authorized by the laws
of this state to issue prescriptions.
(40) "Prewritten computer software" means "computer software",
including prewritten upgrades, which is not designed and developed
by the author or other creator to the specifications of a specific
purchaser.
(A) The combining of two or more prewritten computer software
programs or prewritten portions thereof does not cause the combination to be other than prewritten computer software.
(B) "Prewritten computer software" includes software designed
and developed by the author or other creator to the specifications
of a specific purchaser when it is sold to a person other than the
specific purchaser. Where a person modifies or enhances computer
software of which the person is not the author or creator, the
person is considered to be the author or creator only of the
person's modifications or enhancements.
(C) "Prewritten computer software" or a prewritten portion
thereof that is modified or enhanced to any degree, where the
modification or enhancement is designed and developed to the
specifications of a specific purchaser, remains prewritten computer
software
: Provided, That where there is a reasonable, separately
stated charge or an invoice or other statement of the price given
to the purchaser for the modification or enhancement, the
modification or enhancement does not constitute prewritten computer
software.
(41) "Product-based exemption" means an exemption based on the
description of the product or service and not based on who
purchases the product or service or how the purchaser intends to
use the product or service.
(42) "Prosthetic device" means a replacement, corrective or
supportive device, including repair and replacement parts for the
device worn on or in the body, to:(A) Artificially replace a missing portion of the body;
(B) Prevent or correct physical deformity or malfunction of
the body; or
(C) Support a weak or deformed portion of the body.
(43) "Protective equipment" means items for human wear and
designed as protection of the wearer against injury or disease or
as protections against damage or injury of other persons or
property but not suitable for general use.
(44) "Purchase price" means the measure subject to the tax
imposed by article fifteen or fifteen-a of this chapter and has the
same meaning as sales price.
(45) "Purchaser" means a person to whom a sale of personal
property is made or to whom a service is furnished.
(46) "Registered under this agreement" means registration by
a seller with the member states under the central registration
system provided in article four of the agreement.
(47) "Retail sale" or "sale at retail" means:
(A) Any sale, lease or rental for any purpose other than for
resale as tangible personal property, sublease or subrent; and
(B) Any sale of a service other than a service purchased for
resale.
(48) (A) "Sales price" means the measure subject to the tax
levied under articles fifteen or fifteen-a of this chapter and
includes the total amount of consideration, including cash, credit, property and services, for which personal property or services are
sold, leased or rented, valued in money, whether received in money
or otherwise, without any deduction for the following:
(i) The seller's cost of the property sold;
(ii) The cost of materials used, labor or service cost,
interest, losses, all costs of transportation to the seller, all
taxes imposed on the seller and any other expense of the seller;
(iii) Charges by the seller for any services necessary to
complete the sale, other than delivery and installation charges;
(iv) Delivery charges; and
(v) Installation charges.
(B) "Sales price" does not include:
(i) Discounts, including cash, term or coupons that are not
reimbursed by a third party that are allowed by a seller and taken
by a purchaser on a sale;
(ii) Interest, financing and carrying charges from credit
extended on the sale of personal property, goods or services, if
the amount is separately stated on the invoice, bill of sale or
similar document given to the purchaser; or
(iii) Any taxes legally imposed directly on the consumer that
are separately stated on the invoice, bill of sale or similar
document given to the purchaser.
(C) "Sales price"
shall include includes consideration
received by the seller from third parties if:(i) The seller actually receives consideration from a party
other than the purchaser and the consideration is directly related
to a price reduction or discount on the sale;
(ii) The seller has an obligation to pass the price reduction
or discount through to the purchaser;
(iii) The amount of the consideration attributable to the sale
is fixed and determinable by the seller at the time of the sale of
the item to the purchaser; and
(iv) One of the following criteria is met:
(I) The purchaser presents a coupon, certificate or other
documentation to the seller to claim a price reduction or discount
where the coupon, certificate or documentation is authorized,
distributed or granted by a third party with the understanding that
the third party will reimburse any seller to whom the coupon,
certificate or documentation is presented;
(II) The purchaser identifies himself or herself to the seller
as a member of a group or organization entitled to a price
reduction or discount (a "preferred customer" card that is
available to any patron does not constitute membership in such a
group); or
(III) The price reduction or discount is identified as a
third-party price reduction or discount on the invoice received by
the purchaser or on a coupon, certificate or other documentation
presented by the purchaser.(49) "Sales tax" means the tax levied under article fifteen of
this chapter.
(50) "School art supply" means an item commonly used by a
student in a course of study for artwork. The term is mutually
exclusive of the terms "school supply", "school instructional
material" and "school computer supply" and may be taxed
differently. The following is an all-inclusive list:
(A) Clay and glazes;
(B) Paints; acrylic, tempora and oil;
(C) Paintbrushes for artwork;
(D) Sketch and drawing pads; and
(E) Watercolors.
(51) "School instructional material" means written material
commonly used by a student in a course of study as a reference and
to learn the subject being taught. The term is mutually exclusive
of the terms "school supply", "school art supply" and "school
computer supply" and may be taxed differently. The following is an
all-inclusive list:
(A) Reference books;
(B) Reference maps and globes;
(C) Textbooks; and
(D) Workbooks.
(52) "School computer supply" means an item commonly used by
a student in a course of study in which a computer is used. The term is mutually exclusive of the terms "school supply", "school
art supply" and "school instructional material" and may be taxed
differently. The following is an all-inclusive list:
(A) Computer storage media; diskettes, compact disks;
(B) Handheld electronic schedulers, except devices that are
cellular phones;
(C) Personal digital assistants, except devices that are
cellular phones;
(D) Computer printers; and
(E) Printer supplies for computers; printer paper, printer ink.
(53) "School supply" means an item commonly used by a student
in a course of study. The term is mutually exclusive of the terms
"school art supply", "school instructional material" and "school
computer supply" and may be taxed differently. The following is an
all-inclusive list of school supplies:
(A) Binders;
(B) Book bags;
(C) Calculators;
(D) Cellophane tape;
(E) Blackboard chalk;
(F) Compasses;
(G) Composition books;
(H) Crayons;
(I) Erasers;(J) Folders; expandable, pocket, plastic and manila;
(K) Glue, paste and paste sticks;
(L) Highlighters;
(M) Index cards;
(N) Index card boxes;
(O) Legal pads;
(P) Lunch boxes;
(Q) Markers;
(R) Notebooks;
(S) Paper; loose-leaf ruled notebook paper, copy paper, graph
paper, tracing paper, manila paper, colored paper, poster board and
construction paper;
(T) Pencil boxes and other school supply boxes;
(U) Pencil sharpeners;
(V) Pencils;
(W) Pens;
(X) Protractors;
(Y) Rulers;
(Z) Scissors; and
(AA) Writing tablets.
(54) "Seller" means any person making sales, leases or rentals
of personal property or services.
(55) "Service" or "selected service" includes all
nonprofessional activities engaged in for other persons for a consideration which involve the rendering of a service as
distinguished from the sale of tangible personal property, but does
not include contracting, personal services, services rendered by an
employee to his or her employer, any service rendered for resale or
any service furnished by a business that is subject to the control
of the Public Service Commission when the service or the manner in
which it is delivered is subject to regulation by the Public
Service Commission of this state. The term "service" or "selected
service" does not include payments received by a vendor of tangible
personal property as an incentive to sell a greater volume of such
tangible personal property under a manufacturer's, distributor's or
other third-party's marketing support program, sales incentive
program, cooperative advertising agreement or similar type of
program or agreement and these payments are not considered to be
payments for a "service" or "selected service" rendered, even
though the vendor may engage in attendant or ancillary activities
associated with the sales of tangible personal property as required
under the programs or agreements.
(56) "Soft drink" means nonalcoholic beverages that contain
natural or artificial sweeteners. "Soft drinks" do not include
beverages that contain milk or milk products, soy, rice or similar
milk substitutes or greater than fifty percent of vegetable or
fruit juice by volume.
(57) "Specified digital products" means electronically transferred:
(A)(i) "Digital audio-visual works" which means a series of
related images which, when shown in succession, impart an
impression of motion, together with accompanying sounds, if any;
(ii) "Digital audio works" which means works that result from
the fixation of a series of musical, spoken or other sounds,
including ringtones; and
(iii) "Digital books" which means works that are generally
recognized in the ordinary and usual sense as "books."
(B) For purposes of the definition of "digital audio works",
"ringtones" means digitized sound files that are downloaded onto a
device and that may be used to alert the customer with respect to
a communication.
(C) For purposes of the definition of "specified digital
products", "transferred electronically" means obtained by the
purchaser by means other than tangible storage media.
(57) (58) "Sport or recreational equipment" means items
designed for human use and worn in conjunction with an athletic or
recreational activity that are not suitable for general use.
"Sport or recreational equipment" are mutually exclusive of and may
be taxed differently than apparel within the definition of
"clothing", "clothing accessories or equipment" and "protective
equipment". The following list contains examples and is not
intended to be an all-inclusive list. "Sport or recreational equipment"
shall include includes:
(A) Ballet and tap shoes;
(B) Cleated or spiked athletic shoes;
(C) Gloves, including, but not limited to, baseball, bowling,
boxing, hockey and golf;
(D) Goggles;
(E) Hand and elbow guards;
(F) Life preservers and vests;
(G) Mouth guards;
(H) Roller and ice skates;
(I) Shin guards;
(J) Shoulder pads;
(K) Ski boots;
(L) Waders; and
(M) Wetsuits and fins.
(58) (59) "State" means any state of the United States, the
District of Columbia and the Commonwealth of Puerto Rico.
(59) (60) "Tangible personal property" means personal property
that can be seen, weighed, measured, felt or touched or that is in
any manner perceptible to the senses. "Tangible personal property"
includes, but is not limited to, electricity, steam, water, gas and
prewritten computer software.
(60) (61) "Tax" includes all taxes levied under articles
fifteen and fifteen-a of this chapter and additions to tax, interest and penalties levied under article ten of this chapter.
(61) (62) "Tax Commissioner" means the State Tax Commissioner
or his or her delegate. The term "delegate" in the phrase "or his
or her delegate", when used in reference to the Tax Commissioner,
means any officer or employee of the State Tax Division duly
authorized by the Tax Commissioner directly, or indirectly by one
or more redelegations of authority, to perform the functions
mentioned or described in this article or rules promulgated for
this article.
(62) (63) "Taxpayer" means any person liable for the taxes
levied by articles fifteen and fifteen-a of this chapter or any
additions to tax penalties imposed by article ten of this chapter.
(63) (64) "Telecommunications service" or "telecommunication
service" when used in this article and articles fifteen and
fifteen-a shall have has the same meaning as that term is defined
in section two-b of this article.
(64) (65) "Tobacco" means cigarettes, cigars, chewing or pipe
tobacco or any other item that contains tobacco.
(65) (66) "Use tax" means the tax levied under article
fifteen-a of this chapter.
(66) (67) "Use-based exemption" means an exemption based on a
specified use of the product or service by the purchaser.
(67) (68) "Vendor" means any person furnishing services taxed
by article fifteen or fifteen-a of this chapter or making sales of tangible personal property or custom software. "Vendor" and
"seller" are used interchangeably in this article and in articles
fifteen and fifteen-a of this chapter.
(c) Additional definitions. -- Other terms used in this
article are defined in articles fifteen and fifteen-a of this
chapter, which definitions are incorporated by reference into this
article. Additionally, other sections of this article may define
terms primarily used in the section in which the term is defined.
§11-15B-21. Notice for state tax changes.
(a) General. -- The Tax Commissioner shall provide sellers
with as much advance notice as practicable of a rate change for a
tax levied by article fifteen or fifteen-a of this chapter.
(b) Effective date of rate changes. -- Unless the Legislature
expressly provides a different effective date for a rate change,
the change shall take takes effect on the first day of the calendar
quarter that begins on or after the effective date of the act of
the Legislature that makes the rate change and that is more than
sixty days after passage of the bill making the rate change.
(c) Notification of changes to tax base. -- The Tax
Commissioner shall make reasonable efforts to notify sellers of
legislative changes to the tax base and to amendments to sales and
use tax rules, as that term is defined in section two, article one,
chapter twenty-nine-a of this code.
(d) Liability of seller.
(1) Failure of a seller to receive notice or failure of the
state to provide notice of a rate change or a change in the tax
base, or to limit the effective date of a rate change, does not
relieve the seller of its obligation to collect sales or use taxes
for this state.
(2) Failure of the Tax Commissioner to provide at least thirty
days between the enactment of the statute providing a rate change
and the effective date of the rate change relieves the seller of
liability for failing to collect tax at the new rate if:
(A) The seller collected tax at the immediately preceding
effective rate; and
(B) The seller's failure to collect at the newly effective
rate does not extend beyond thirty days after the date of the
enactment of the new rate.
(e) Notwithstanding subdivision (2), subsection (d) of this
section, if the seller fraudulently failed to collect at the new
rate or solicits purchasers based on the immediately preceding
effective rate this relief does not apply.
§11-15B-24. Administration of exemptions.
(a) General rules. -- When a purchaser claims an exemption
from paying tax under article fifteen or fifteen-a of this chapter:
(1) Sellers shall obtain identifying information of the
purchaser and the reason for claiming a tax exemption at the time
of the purchase, as determined by the governing board.
(2) A purchaser is not required to provide a signature to
claim an exemption from tax unless a paper exemption certificate is
used.
(3) The seller shall use the standard form for claiming an
exemption electronically that is adopted by the governing board.
(4) The seller shall obtain the same information for proof of
a claimed exemption regardless of the medium in which the
transaction occurred.
(5) The Tax Commissioner may utilize use a system wherein the
purchaser exempt from the payment of the tax is issued an
identification number that is presented to the seller at the time
of the sale.
(6) The seller shall maintain proper records of exempt
transactions and provide the records to the Tax Commissioner or the
Tax Commissioner's designee.
(7) The Tax Commissioner shall administer use-based and
entity-based exemptions when practicable through a direct pay
permit, an exemption certificate or another means that does not
burden sellers.
(8) After December 31, 2007, in the case of drop shipments, a
third-party vendor such as a drop shipper may claim a resale
exemption based on an exemption certificate provided by its
customer/reseller or any other acceptable information available to
the third-party vendor evidencing qualification for a resale exemption, regardless of whether the customer/reseller is
registered to collect and remit sales and use taxes in this state,
when the sale is sourced to this state.
(b) The Tax Commissioner shall relieve sellers that follow the
requirements of this section from any the tax otherwise applicable
if it is determined that the purchaser improperly claimed an
exemption and shall hold the purchaser liable for the nonpayment of
tax. This relief from liability does not apply:
(A) To a seller who fraudulently fails to collect the tax;
(B) To a seller who solicits purchasers to participate in the
unlawful claim of an exemption;
(C) To a seller who accepts an exemption certificate when the
purchaser claims an entity-based exemption when: (i) The subject
of the transaction sought to be covered by the exemption
certificate is actually received by the purchaser at a location
operated by the seller; and (ii) the state in which that location
resides provides an exemption certificate that clearly and
affirmatively indicates (graying out exemption reason types on
uniform form and posting it on a state's web site is an indicator)
that the claimed exemption is not available in that state.
(c) Time within which seller must obtain exemption
certificates. -- A seller is relieved from paying tax otherwise
applicable under article fifteen or fifteen-a of this chapter if
the seller obtains a fully completed exemption certificate or captures the required data elements within ninety days subsequent
to the date of sale.
(1) If the seller has not obtained an exemption certificate or
all required data elements, the seller may, within one hundred
twenty days subsequent to a request for substantiation by the Tax
Commissioner, either prove that the transaction was not subject to
tax by other means or obtain a fully completed exemption
certificate from the purchaser, taken in good faith. For purposes
of this section, the Tax Commissioner may continue to apply this
state's standards of good faith until a uniform standard for good
faith is defined in the Streamlined Sales and Use Tax Agreement.
(2) Nothing in this section shall affect affects the ability
of the Tax Commissioner to require purchasers to update exemption
certificate information or to reapply with the state to claim
certain exemptions.
(3) Notwithstanding the preceding provisions of this section,
when an exemption may be claimed by exemption certificate, a seller
is relieved from paying the tax otherwise applicable if the seller
obtains a blanket exemption certificate from a purchaser with which
the seller has a recurring business relationship. The Tax
Commissioner may not request from the seller renewal of blanket
certificates or updates of exemption certificate information or
data elements when there is a recurring business relationship
between the buyer and seller. For purposes of this subdivision, a recurring business relationship exists when a period of no more
than twelve months elapses between sales transactions.
(d) Exception. -- No exemption certificate or direct pay
permit number is required when the sale is exempt per se from the
taxes imposed by articles fifteen and fifteen-a of this chapter.
§11-15B-28. Confidentiality and privacy protections under Model I.
(a) Purpose. -- The purpose of this section is to set forth
the policy of this state for the protection of the confidentiality
rights of all participants in the streamlined sales and use tax
administration and collection system and of the privacy interests
of consumers who deal with Model I sellers.
(b) Certain terms defined. -- As used in this section:
(1) The term "confidential taxpayer information" means all
information that is protected under section five-d, article ten of
this chapter;
(2) The term "personally identifiable information" means
information that identifies a person; and
(3) The term "anonymous data" means information that does not
identify a person.
(c) Certified service providers. -- With very limited
exceptions, a certified service provider shall perform its tax
calculation, remittance and reporting functions without retaining
the personally identifiable information of consumers.
(d) Certification of service providers. -- The governing board may certify a service provider only if that certified service
provider certifies that:
(1) Its system has been designed and tested to ensure that the
fundamental precept of anonymity is respected;
(2) That personally identifiable information is only used and
retained to the extent necessary for the administration of Model I
with respect to exempt purchasers and proper identification of
taxing jurisdictions;
(3) It provides consumers clear and conspicuous notice of its
information practices, including what information it collects, how
it collects the information, how it uses the information, how long,
if at all, it retains the information and whether it discloses the
information to member states. This notice is satisfied by a
written privacy policy statement accessible by the public on the
official web site of the certified service provider;
(4) Its collection, use and retention of personally
identifiable information is limited to that required by the states
that are members of the Streamlined Sales and Use Tax Agreement to
ensure the validity of exemptions from taxation that are claimed by
reason of a consumer's status or the intended use of the goods or
services purchased and for documentation of the correct assignment
of taxing jurisdictions; and
(5) It provides adequate technical, physical and
administrative safeguards as to protect personally identifiable information from unauthorized access and disclosure.
(e) State notification of privacy policy. -- The Tax
Commissioner shall provide public notification to consumers,
including their exempt purchasers, of this state's practices
relating to the collection, use and retention of personally
identifiable information.
(f) Destruction of confidential information. -- When any
personally identifiable information that has been collected and
retained by the Tax Commissioner is no longer required for the
purposes set forth in subdivision (4), subsection (d) of this
section, the information shall may no longer be retained by the Tax
Commissioner.
(g) Review and correction by individuals. -- When personally
identifiable information regarding an individual is retained by or
on behalf of the Tax Commissioner, the commissioner shall provide
reasonable access by an individual to his or her own information in
the commissioner's possession and a right to correct any
inaccurately recorded information.
(h) Discovery by other persons. -- If anyone other than the
individual, or a person authorized in writing by the individual, or
by controlling law seeks to discover personally identifiable
information, the Tax Commissioner shall make a reasonable and
timely effort to notify the individual of the request.
(i) Enforcement. -- This privacy policy shall be enforced by the Tax Commissioner or the Attorney General of this state.
(j) This section shall not be interpreted as limiting or
abrogating does not limit or abrogate any other statutory or
regulatory provision of this state regarding the collection, use
and maintenance of confidential taxpayer information, which
provisions remain fully applicable and binding. This section and
the Streamlined Sales and Use Tax Agreement do not enlarge or limit
the authority of this state to:
(1) Conduct audits or other reviews as provided under the
Streamlined Sales and Use Tax Agreement and state law;
(2) Provide records pursuant to the Freedom of Information
Act, disclosure laws with governmental agencies or other laws or
regulations rules;
(3) Prevent, consistent with state law, disclosures of
confidential taxpayer information;
(4) Prevent, consistent with federal law, disclosures or
misuse of federal return information obtained under a disclosure
agreement with the Internal Revenue Service; or
(5) Collect, disclose, disseminate or otherwise use anonymous
data for governmental purposes.
(k) Service provider's confidentiality policy may be more
restrictive. -- This privacy policy does not preclude the governing
board from certifying a certified service provider whose privacy
policy is more protective of confidential taxpayer information or personally identifiable information than is required by the
agreement or the laws of this state.
§11-15B-32. Effective date.
(a) The provisions of this article, as amended or added during
the regular legislative session in the year 2003, shall take effect
the January 1, 2004, and apply to all sales made on or after that
date and to all returns and payments due on or after that day,
except as otherwise expressly provided in section five of this
article.
(b) The provisions of this article, as amended or added during
the second extraordinary legislative session in the year 2003,
shall take effect January 1, 2004, and apply to all sales made on
or after that date.
(c) The provisions of this article, as amended or added by act
of the Legislature in the year 2004, shall apply to all sales made
on or after the date of passage in the year 2004.
(d) The provisions of this article, as amended or added during
the regular legislative session in the year 2008, shall apply to
all sales made on or after the date of passage and to all returns
and payments due on or after that day, except as otherwise
expressly provided in this article.
(e) The provisions of this article, as amended or added during
the regular legislative session in the year 2009, apply to all
sales made on or after the date of passage and to all returns and payments due on or after that day, except as otherwise expressly
provided in this article.
NOTE: The purpose of this bill is to conform the provisions of
the West Virginia Streamlined Sales and Use Tax statute, West
Virginia Code §11-15B, to the current provisions of the Streamlined
Sales and Use Tax Agreement.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.