H. B. 4349
(By Delegates Doyle, Campbell, Boggs, Stalnaker,
Houston, Anderson and G. White)
(Originating in the Committee on Finance)
[February 6, 2004]
A BILL to amend and reenact §11-15-9 of the code of West Virginia,
1931, as amended; to amend and reenact §11-15B-2, §11-15B-2a,
§11-15B-15, 11-15B-30, 11-15B-32 and §11-15B-36 of said code;
and to amend said code by adding thereto two new sections,
designated §11-15B-19 and §11-15B-20, all relating generally
to consumers sales and service tax; clarifying that exemption
from tax for durable medical goods, mobility enhancing
equipment and prosthetic devices purchased with prescription
was not intended to be repealed when house bill 3014 was
enacted during the 2003 regular session of the Legislature;
deleting language made obsolete when that bill was enacted;
making technical corrections in streamlined sales and use tax
administration act; updating certain definitions used in that
act; providing sourcing rules and definitions for
telecommunications services and retail floral sales based on
streamlined sales and use tax agreement; clarifying
application of hold harmless rule; deleting obsolete language; and specifying effective date.
Be it enacted by the Legislature of West Virginia:
That §11-15-9 of the code of West Virginia, 1931, as amended,
be amended and reenacted; that §11-15B-2, §11-15B-2a, §11-15B-15,
11-15B-30, 11-15B-32 and §11-15B-36 of said code be amended and
reenacted; and that said code be amended by adding thereto two new
sections, designated §11-15B-19 and §11-15B-20, all to read as
follows:
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.
§11-15-9. Exemptions.
(a)
Exemptions for which exemption certificate may be issued.
- A person having a right or claim to any exemption set forth in
this subsection may, in lieu of paying the tax imposed by this
article and filing a claim for refund, execute a certificate of
exemption, in the form required by the tax commissioner, and
deliver it to the vendor of the property or service in the manner
required by the tax commissioner. However, the tax commissioner
may, by rule, specify those exemptions authorized in this
subsection for which exemption certificates are not required. The
following sales of tangible personal property and services are
exempt as provided in this subsection:
(1) Sales of gas, steam and water delivered to consumers
through mains or pipes and sales of electricity;
(2) Sales of textbooks required to be used in any of the
schools of this state or in any institution in this state which qualifies as a nonprofit or educational institution subject to the
West Virginia department of education and the arts, the board of
trustees of the university system of West Virginia or the board of
directors for colleges located in this state;
(3) Sales of property or services to this state, its
institutions or subdivisions, governmental units, institutions or
subdivisions of other states:
Provided, That the law of the other
state provides the same exemption to governmental units or
subdivisions of this state and to the United States, including
agencies of federal, state or local governments for distribution in
public welfare or relief work;
(4) Sales of vehicles which are titled by the division of
motor vehicles and which are subject to the tax imposed by section
four, article three, chapter seventeen-a of this code or like tax;
(5) Sales of property or services to churches which make no
charge whatsoever for the services they render:
Provided, That the
exemption granted in this subdivision applies only to services,
equipment, supplies, food for meals and materials directly used or
consumed by these organizations and does not apply to purchases of
gasoline or special fuel;
(6) Sales of tangible personal property or services to a
corporation or organization which has a current registration
certificate issued under article twelve of this chapter, which is
exempt from federal income taxes under Section 501(c)(3) or (c)(4)
of the Internal Revenue Code of 1986, as amended, and which is:
(A) A church or a convention or association of churches as defined in Section 170 of the Internal Revenue Code of 1986, as
amended;
(B) An elementary or secondary school which maintains a
regular faculty and curriculum and has a regularly enrolled body of
pupils or students in attendance at the place in this state where
its educational activities are regularly carried on;
(C) A corporation or organization which annually receives more
than one half of its support from any combination of gifts, grants,
direct or indirect charitable contributions or membership fees;
(D) An organization which has no paid employees and its gross
income from fundraisers, less reasonable and necessary expenses
incurred to raise the gross income (or the tangible personal
property or services purchased with the net income), is donated to
an organization which is exempt from income taxes under Section
501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as
amended;
(E) A youth organization, such as the girl scouts of the
United States of America, the boy scouts of America or the YMCA
Indian guide/princess program and the local affiliates thereof,
which is organized and operated exclusively for charitable purposes
and has as its primary purpose the nonsectarian character
development and citizenship training of its members;
(F) For purposes of this subsection:
(i) The term "support" includes, but is not limited to:
(I) Gifts, grants, contributions or membership fees;
(II) Gross receipts from fundraisers which include receipts from admissions, sales of merchandise, performance of services or
furnishing of facilities in any activity which is not an unrelated
trade or business within the meaning of Section 513 of the Internal
Revenue Code of 1986, as amended;
(III) Net income from unrelated business activities, whether
or not the activities are carried on regularly as a trade or
business;
(IV) Gross investment income as defined in Section 509(e) of
the Internal Revenue Code of 1986, as amended;
(V) Tax revenues levied for the benefit of a corporation or
organization either paid to or expended on behalf of the
organization; and
(VI) The value of services or facilities (exclusive of
services or facilities generally furnished to the public without
charge) furnished by a governmental unit referred to in Section
170(c)(1) of the Internal Revenue Code of 1986, as amended, to an
organization without charge. This term does not include any gain
from the sale or other disposition of property which would be
considered as gain from the sale or exchange of a capital asset or
the value of an exemption from any federal, state or local tax or
any similar benefit;
(ii) The term "charitable contribution" means a contribution
or gift to or for the use of a corporation or organization,
described in Section 170(c)(2) of the Internal Revenue Code of
1986, as amended; and
(iii) The term "membership fee" does not include any amounts paid for tangible personal property or specific services rendered
to members by the corporation or organization;
(G) The exemption allowed by this subdivision does not apply
to sales of gasoline or special fuel or to sales of tangible
personal property or services to be used or consumed in the
generation of unrelated business income as defined in Section 513
of the Internal Revenue Code of 1986, as amended. The
provisions of
this subdivision apply to sales made after the thirtieth day of
June, one thousand nine hundred eighty-nine: Provided, That the
exemption granted in this subdivision applies only to services,
equipment, supplies and materials used or consumed in the
activities for which the organizations qualify as tax-exempt
organizations under the Internal Revenue Code and does not apply to
purchases of gasoline or special fuel;
(7) An isolated transaction in which any taxable service or
any tangible personal property is sold, transferred, offered for
sale or delivered by the owner of the property or by his or her
representative for the owner's account, the sale, transfer, offer
for sale or delivery not being made in the ordinary course of
repeated and successive transactions of like character by the owner
or on his or her account by the representative:
Provided, That
nothing contained in this subdivision may be construed to prevent
an owner who sells, transfers or offers for sale tangible personal
property in an isolated transaction through an auctioneer from
availing himself or herself of the exemption provided in this
subdivision, regardless of where the isolated sale takes place. The tax commissioner may propose a legislative rule for promulgation
pursuant to article three, chapter twenty-nine-a of this code which
he or she considers necessary for the efficient administration of
this exemption;
(8) Sales of tangible personal property or of any taxable
services rendered for use or consumption in connection with the
commercial production of an agricultural product the ultimate sale
of which is subject to the tax imposed by this article or which
would have been subject to tax under this article:
Provided, That
sales of tangible personal property and services to be used or
consumed in the construction of or permanent improvement to real
property and sales of gasoline and special fuel are not exempt:
Provided, however, That nails and fencing may not be considered as
improvements to real property;
(9) Sales of tangible personal property to a person for the
purpose of resale in the form of tangible personal property:
Provided, That sales of gasoline and special fuel by distributors
and importers is taxable except when the sale is to another
distributor for resale:
Provided, however, That sales of building
materials or building supplies or other property to any person
engaging in the activity of contracting, as defined in this
article, which is to be installed in, affixed to or incorporated by
that person or his or her agent into any real property, building or
structure is not exempt under this subdivision;
(10) Sales of newspapers when delivered to consumers by route
carriers;
(11) Sales of drugs
, durable medical goods, mobility enhancing
equipment and prosthetic devices dispensed upon prescription and
sales of insulin to consumers for medical purposes
. The amendment
to this subdivision shall apply to sales made after the thirty-
first day of December, two thousand three;
(12) Sales of radio and television broadcasting time,
preprinted advertising circulars and newspaper and outdoor
advertising space for the advertisement of goods or services;
(13) Sales and services performed by day care centers;
(14) Casual and occasional sales of property or services not
conducted in a repeated manner or in the ordinary course of
repetitive and successive transactions of like character by a
corporation or organization which is exempt from tax under
subdivision (6) of this subsection on its purchases of tangible
personal property or services.
(A) For purposes of this
subdivision, the term "casual and occasional sales not conducted in
a repeated manner or in the ordinary course of repetitive and
successive transactions of like character" means sales of tangible
personal property or services at fundraisers sponsored by a
corporation or organization which is exempt, under subdivision (6)
of this subsection, from payment of the tax imposed by this article
on its purchases when the fundraisers are of limited duration and
are held no more than six times during any twelve-month period and
"limited duration" means no more than eighty-four consecutive
hours:
Provided, That sales for volunteer fire departments and
volunteer school support groups, with duration of events being no more than eighty-four consecutive hours at a time, which are held
no more than eighteen times in a twelve-month period for the
purposes of this subdivision are considered "casual and occasional
sales not conducted in a repeated manner or in the ordinary course
of repetitive and successive transactions of a like character;
and
(B) The provisions of this subdivision apply to sales made
after the thirtieth day of June, one thousand nine hundred
eighty-nine;
(15) Sales of property or services to a school which has
approval from the board of trustees of the university system of
West Virginia or the board of directors of the state college system
to award degrees, which has its principal campus in this state and
which is exempt from federal and state income taxes under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended:
Provided, That sales of gasoline and special fuel are taxable;
(16) Sales of mobile homes to be used by purchasers as their
principal year-round residence and dwelling: Provided, That these
mobile homes are subject to tax at the three-percent rate;
(17)(16) Sales of lottery tickets and materials by licensed
lottery sales agents and lottery retailers authorized by the state
lottery commission, under the provisions of article twenty-two,
chapter twenty-nine of this code;
(18)(17) Leases of motor vehicles titled pursuant to the
provisions of article three, chapter seventeen-a of this code to
lessees for a period of thirty or more consecutive days
. This
exemption applies to leases executed on or after the first day of July, one thousand nine hundred eighty-seven, and to payments under
long-term leases executed before that date for months of the lease
beginning on or after that date;
(19)(18) Notwithstanding the provisions of section eighteen
or
eighteen-b of this article or any other provision of this article
to the contrary, sales of propane to consumers for poultry house
heating purposes, with any seller to the consumer who may have
prior paid the tax in his or her price, to not pass on the same to
the consumer, but to make application and receive refund of the tax
from the tax commissioner pursuant to rules which are promulgated
after being proposed for legislative approval in accordance with
chapter twenty-nine-a of this code by the tax commissioner;
(20)(19) Any sales of tangible personal property or services
purchased
after the thirtieth day of September, one thousand nine
hundred eighty-seven, and lawfully paid for with food stamps
pursuant to the federal food stamp program codified in 7 U. S. C.
§2011, et seq., as amended, or with drafts issued through the West
Virginia special supplement food program for women, infants and
children codified in 42 U. S. C. §1786;
(21)(20) Sales of tickets for activities sponsored by
elementary and secondary schools located within this state;
(22)(21) Sales of electronic data processing services and
related software:
Provided, That, for the purposes of this
subdivision, "electronic data processing services" means:
(A) The processing of another's data, including all processes
incident to processing of data such as keypunching, keystroke verification, rearranging or sorting of previously documented data
for the purpose of data entry or automatic processing and changing
the medium on which data is sorted, whether these processes are
done by the same person or several persons; and
(B) Providing access to computer equipment for the purpose of
processing data or examining or acquiring data stored in or
accessible to the computer equipment;
(23)(22) Tuition charged for attending educational summer
camps;
(24)(23) Dispensing of services performed by one corporation,
partnership or limited liability company for another corporation,
partnership or limited liability company when the entities are
members of the same controlled group or are related taxpayers as
defined in Section 267 of the Internal Revenue Code. "Control"
means ownership, directly or indirectly, of stock, equity interests
or membership interests possessing fifty percent or more of the
total combined voting power of all classes of the stock of a
corporation, equity interests of a partnership or membership
interests of a limited liability company entitled to vote or
ownership, directly or indirectly, of stock, equity interests or
membership interests possessing fifty percent or more of the value
of the corporation, partnership or limited liability company;
(25)(24) Food for the following are exempt:
(A) Food purchased or sold by a public or private school,
school-sponsored student organizations or school-sponsored
parent-teacher associations to students enrolled in the school or to employees of the school during normal school hours; but not
those sales of food made to the general public;
(B) Food purchased or sold by a public or private college or
university or by a student organization officially recognized by
the college or university to students enrolled at the college or
university when the sales are made on a contract basis so that a
fixed price is paid for consumption of food products for a specific
period of time without respect to the amount of food product
actually consumed by the particular individual contracting for the
sale and no money is paid at the time the food product is served or
consumed;
(C) Food purchased or sold by a charitable or private
nonprofit organization, a nonprofit organization or a governmental
agency under a program to provide food to low-income persons at or
below cost;
(D) Food sold by a charitable or private nonprofit
organization, a nonprofit organization or a governmental agency
under a program operating in West Virginia for a minimum of five
years to provide food at or below cost to individuals who perform
a minimum of two hours of community service for each unit of food
purchased from the organization;
(E) Food sold in an occasional sale by a charitable or
nonprofit organization, including volunteer fire departments and
rescue squads, if the purpose of the sale is to obtain revenue for
the functions and activities of the organization and the revenue
obtained is actually expended for that purpose;
(F) Food sold by any religious organization at a social or
other gathering conducted by it or under its auspices, if the
purpose in selling the food is to obtain revenue for the functions
and activities of the organization and the revenue obtained from
selling the food is actually used in carrying out those functions
and activities:
Provided, That purchases made by the organizations
are not exempt as a purchase for resale;
(G) Food sold
after the thirty-first day of July, two thousand
two, by volunteer fire departments and rescue squads that are
exempt from federal income taxes under Section 501(c)(3) or (c)(4)
of the Internal Revenue Code of 1986, as amended, when the purpose
of the sale is to obtain revenue for the functions and activities
of the organization and the revenue obtained is exempt from federal
income tax and actually expended for that purpose;
(26)(25) Sales of food by little leagues, midget football
leagues, youth football or soccer leagues, band boosters or other
school or athletic booster organizations supporting activities for
grades kindergarten through twelve and similar types of
organizations, including scouting groups and church youth groups,
if the purpose in selling the food is to obtain revenue for the
functions and activities of the organization and the revenues
obtained from selling the food is actually used in supporting or
carrying on functions and activities of the groups:
Provided, That
the purchases made by the organizations are not exempt as a
purchase for resale;
(27)(26) Charges for room and meals by fraternities and sororities to their members:
Provided, That the purchases made by
a fraternity or sorority are not exempt as a purchase for resale;
(28)(27) Sales of or charges for the transportation of
passengers in interstate commerce;
(29)(28) Sales of tangible personal property or services to
any person which this state is prohibited from taxing under the
laws of the United States or under the constitution of this state;
(30)(29) Sales of tangible personal property or services to
any person who claims exemption from the tax imposed by this
article or article fifteen-a of this chapter pursuant to the
provision of any other chapter of this code;
(31)(30) Charges for the services of opening and closing a
burial lot;
(32)(31) Sales of livestock, poultry or other farm products in
their original state by the producer of the livestock, poultry or
other farm products or a member of the producer's immediate family
who is not otherwise engaged in making retail sales of tangible
personal property; and sales of livestock sold at public sales
sponsored by breeders or registry associations or livestock auction
markets:
Provided, That the exemptions allowed by this subdivision
apply to sales made on or after the first day of July, one thousand
nine hundred ninety, and may be claimed without presenting or
obtaining exemption certificates
: Provided, however, That provided
the farmer
shall maintain maintains adequate records;
(33)(32) Sales of motion picture films to motion picture
exhibitors for exhibition if the sale of tickets or the charge for admission to the exhibition of the film is subject to the tax
imposed by this article and sales of coin-operated video arcade
machines or video arcade games to a person engaged in the business
of providing the machines to the public for a charge upon which the
tax imposed by this article is remitted to the tax commissioner:
Provided, That the exemption provided in this subdivision
applies
to sales made on or after the first day of July, one thousand nine
hundred ninety, and may be claimed by presenting to the seller a
properly executed exemption certificate;
(34)(33) Sales of aircraft repair, remodeling and maintenance
services when the services are to an aircraft operated by a
certified or licensed carrier of persons or property, or by a
governmental entity, or to an engine or other component part of an
aircraft operated by a certificated or licensed carrier of persons
or property, or by a governmental entity and sales of tangible
personal property that is permanently affixed or permanently
attached as a component part of an aircraft owned or operated by a
certificated or licensed carrier of persons or property, or by a
governmental entity, as part of the repair, remodeling or
maintenance service and sales of machinery, tools or equipment,
directly used or consumed exclusively in the repair, remodeling or
maintenance of aircraft, aircraft engines or aircraft component
parts, for a certificated or licensed carrier of persons or
property, or for a governmental entity;
(35)(34) Charges for memberships or services provided by
health and fitness organizations relating to personalized fitness programs;
(36)(35) Sales of services by individuals who baby-sit for a
profit:
Provided, That the gross receipts of the individual from
the performance of baby-sitting services do not exceed five
thousand dollars in a taxable year;
(37)(36) Sales of services
after the thirtieth day of June,
one thousand nine hundred ninety-seven, by public libraries or by
libraries at academic institutions or by libraries at institutions
of higher learning;
(38)(37) Commissions received
after the thirtieth day of June,
one thousand nine hundred ninety-seven, by a manufacturer's
representative;
(39)(38) Sales of primary opinion research services
after the
thirtieth day of June, one thousand nine hundred ninety-seven,
when:
(A) The services are provided to an out-of-state client;
(B) The results of the service activities, including, but not
limited to, reports, lists of focus group recruits and compilation
of data are transferred to the client across state lines by mail,
wire or other means of interstate commerce, for use by the client
outside the state of West Virginia; and
(C) The transfer of the results of the service activities is
an indispensable part of the overall service.
For the purpose of this subdivision, the term "primary
opinion research" means original research in the form of telephone
surveys, mall intercept surveys, focus group research, direct mail surveys, personal interviews and other data collection methods
commonly used for quantitative and qualitative opinion research
studies;
(40)(39) Sales of property or services
after the thirtieth day
of June, one thousand nine hundred ninety-seven, to persons within
the state when those sales are for the purposes of the production
of value-added products:
Provided, That the exemption granted in
this subdivision applies only to services, equipment, supplies and
materials directly used or consumed by those persons engaged solely
in the production of value-added products:
Provided, however, That
this exemption may not be claimed by any one purchaser for more
than five consecutive years, except as otherwise permitted in this
section.
For the purpose of this subdivision, the term "value-added
product" means the following products derived from processing a raw
agricultural product, whether for human consumption or for other
use. For purposes of this subdivision, the following enterprises
qualify as processing raw agricultural products into value-added
products: Those engaged in the conversion of:
(A) Lumber into furniture, toys, collectibles and home
furnishings;
(B) Fruits into wine;
(C) Honey into wine;
(D) Wool into fabric;
(E) Raw hides into semifinished or finished leather products;
(F) Milk into cheese;
(G) Fruits or vegetables into a dried, canned or frozen
product;
(H) Feeder cattle into commonly accepted slaughter weights;
(I) Aquatic animals into a dried, canned, cooked or frozen
product; and
(J) Poultry into a dried, canned, cooked or frozen product;
(41)(40) After the thirtieth day of June, one thousand nine
hundred ninety-seven, sales Sales of music instructional services
by a music teacher and artistic services or artistic performances
of an entertainer or performing artist pursuant to a contract with
the owner or operator of a retail establishment, restaurant, inn,
bar, tavern, sports or other entertainment facility or any other
business location in this state in which the public or a limited
portion of the public may assemble to hear or see musical works or
other artistic works be performed for the enjoyment of the members
of the public there assembled when the amount paid by the owner or
operator for the artistic service or artistic performance does not
exceed three thousand dollars:
Provided, That nothing contained
herein may be construed to deprive private social gatherings,
weddings or other private parties from asserting the exemption set
forth in this subdivision. For the purposes of this exemption,
artistic performance or artistic service means and is limited to
the conscious use of creative power, imagination and skill in the
creation of aesthetic experience for an audience present and in
attendance and includes, and is limited to, stage plays, musical
performances, poetry recitations and other readings, dance presentation, circuses and similar presentations and does not
include the showing of any film or moving picture, gallery
presentations of sculptural or pictorial art, nude or strip show
presentations, video games, video arcades, carnival rides, radio or
television shows or any video or audio taped presentations or the
sale or leasing of video or audio tapes, air shows, or any other
public meeting, display or show other than those specified herein:
Provided, however, That nothing contained herein may be construed
to exempt the sales of tickets from the tax imposed in this
article. The state tax commissioner shall propose a legislative
rule pursuant to article three, chapter twenty-nine-a of this code
establishing definitions and eligibility criteria for asserting
this exemption which is not inconsistent with the provisions set
forth herein:
Provided further, That nude dancers or strippers may
not be considered as entertainers for the purposes of this
exemption;
(42)(41) After the thirtieth day of June, one thousand nine
hundred ninety-seven, charges Charges to a member by a membership
association or organization which is exempt from paying federal
income taxes under Section 501(c)(3) or (c)(6) of the Internal
Revenue Code of 1986, as amended, for membership in the association
or organization, including charges to members for newsletters
prepared by the association or organization for distribution
primarily to its members, charges to members for continuing
education seminars, workshops, conventions, lectures or courses put
on or sponsored by the association or organization, including charges for related course materials prepared by the association or
organization or by the speaker or speakers for use during the
continuing education seminar, workshop, convention, lecture or
course, but not including any separate charge or separately stated
charge for meals, lodging, entertainment or transportation taxable
under this article:
Provided, That the association or organization
pays the tax imposed by this article on its purchases of meals,
lodging, entertainment or transportation taxable under this article
for which a separate or separately stated charge is not made. A
membership association or organization which is exempt from paying
federal income taxes under Section 501(c)(3) or (c)(6) of the
Internal Revenue Code of 1986, as amended, may elect to pay the tax
imposed under this article on the purchases for which a separate
charge or separately stated charge could apply and not charge its
members the tax imposed by this article or the association or
organization may avail itself of the exemption set forth in
subdivision (9) of this subsection relating to purchases of
tangible personal property for resale and then collect the tax
imposed by this article on those items from its member;
(43)(42) Sales of governmental services or governmental
materials
after the thirtieth day of June, one thousand nine
hundred ninety-seven, by county assessors, county sheriffs, county
clerks or circuit clerks in the normal course of local government
operations;
(44)(43) Direct or subscription sales by the division of
natural resources of the magazine currently entitled "Wonderful West Virginia" and by the division of culture and history of the
magazine currently entitled "Goldenseal" and the journal currently
entitled "West Virginia History";
(45)(44) Sales of soap to be used at car wash facilities;
(46)(45) Commissions received by a travel agency from an
out-of-state vendor;
(47)(46) The service of providing technical evaluations for
compliance with federal and state environmental standards provided
by environmental and industrial consultants who have formal
certification through the West Virginia department of environmental
protection or the West Virginia bureau for public health or both.
For purposes of this exemption, the service of providing technical
evaluations for compliance with federal and state environmental
standards includes those costs of tangible personal property
directly used in providing such services that are separately billed
to the purchaser of such services and on which the tax imposed by
this article has previously been paid by the service provider;
(48)(47) Sales of tangible personal property and services by
volunteer fire departments and rescue squads that are exempt from
federal income taxes under Section 501(c)(3) or (c)(4) of the
Internal Revenue Code of 1986, as amended, during fundraising
activities held after the thirty-first day of July, two thousand
two, if the sole purpose of the sale is to obtain revenue for the
functions and activities of the organization and the revenue
obtained is exempt from federal income tax and actually expended
for that purpose;
(49)(48) Lodging franchise fees, including royalties,
marketing fees, reservation system fees or other fees
assessed
after the first day of December, one thousand nine hundred
ninety-seven, that have been or may be imposed by a lodging
franchiser as a condition of the franchise agreement; and
(50)(49) Sales of the regulation size United States flag and
the regulation size West Virginia flag for display.
(b)
Refundable exemptions. - Any person having a right or
claim to any exemption set forth in this subsection shall first pay
to the vendor the tax imposed by this article and then apply to the
tax commissioner for a refund or credit, or as provided in section
nine-d of this article, give to the vendor his or her West Virginia
direct pay permit number. The following sales of tangible personal
property and services are exempt from tax as provided in this
subsection:
(1) Sales of property or services to bona fide charitable
organizations who make no charge whatsoever for the services they
render:
Provided, That the exemption granted in this subdivision
applies only to services, equipment, supplies, food, meals and
materials directly used or consumed by these organizations and does
not apply to purchases of gasoline or special fuel;
(2) Sales of services, machinery, supplies and materials
directly used or consumed in the activities of manufacturing,
transportation, transmission, communication, production of natural
resources, gas storage, generation or production or selling
electric power, provision of a public utility service or the operation of a utility service or the operation of a utility
business, in the businesses or organizations named in this
subdivision and does not apply to purchases of gasoline or special
fuel;
(3) Sales of property or services to nationally chartered
fraternal or social organizations for the sole purpose of free
distribution in public welfare or relief work:
Provided, That sales
of gasoline and special fuel are taxable;
(4) Sales and services, fire fighting or station house
equipment, including construction and automotive, made to any
volunteer fire department organized and incorporated under the laws
of the state of West Virginia:
Provided, That sales of gasoline and
special fuel are taxable; and
(5) Sales of building materials or building supplies or other
property to an organization qualified under Section 501(c)(3) or
(c)(4) of the Internal Revenue Code of 1986, as amended, which are
to be installed in, affixed to or incorporated by the organization
or its agent into real property or into a building or structure
which is or will be used as permanent low-income housing,
transitional housing, an emergency homeless shelter, a domestic
violence shelter or an emergency children and youth shelter if the
shelter is owned, managed, developed or operated by an organization
qualified under Section 501(c)(3) or (c)(4) of the Internal Revenue
Code of 1986, as amended.
ARTICLE 15B. STREAMLINED SALES AND USE TAX AGREEMENT.
§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) "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.
(5) "Certified service provider" or "CSP" means an agent
certified under the agreement to perform all of the seller's sales
tax functions.
(6) "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.
(7) "Computer software" means a set of coded instructions designed to cause a "computer" or automatic data processing
equipment to perform a task.
(8) "Delivered electronically" means delivered to the
purchaser by means other than tangible storage media.
(9) "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.
(10) "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) A 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) of this subdivision;
(B) 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 C.F.R. §101.36, or in any successor section
of the code of federal regulations.
(11) "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.
(12) "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.
(13) "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.
(14) "Electronic" means relating to technology having
electrical, digital, magnetic, wireless, optical, electromagnetic,
or similar capabilities.
(15) "Entity-based exemption" means an exemption based on who
purchases the product or service or who sells the product or
service.
(16) "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 or tobacco.
(17) "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.
(18) "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 one hundred dollars 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.
(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.
(19) "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.
(20) "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.
(21) "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.
(22) "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.
(23) "Model III seller" means a seller that has sales in at
least five member states, has total annual sales revenue of at
least five hundred million dollars, 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.
(24) "Person" means an individual, trust, estate, fiduciary,
partnership, limited liability company, limited liability
partnership, corporation or any other legal entity.
(25) "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.
(26) "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.
(27) "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
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.
(28) "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.
(29) "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.
(30) "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.
(31) "Purchase price" means the measure subject to the tax
imposed by article fifteen or article fifteen-a of this chapter and
has the same meaning as sales price.
(32) "Purchaser" means a person to whom a sale of personal
property is made or to whom a service is furnished.
(33) "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.
(34) "Retail sale" or "sale at retail" means:
(A) Any sale or lease 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.
(35)(A) "Sales price" means the measure subject to the tax
levied by this article 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;
(v) Installation charges;
(vi) The value of exempt personal property given to the
purchaser where taxable and exempt personal property have been
bundled together and sold by the seller as a single product or
piece of merchandise; and
(vii) Credit for the fair market value of any trade-in.
(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; and
(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.
(36) "Sales tax" means the tax levied under article fifteen of
this chapter.
(37) "Seller" means any person making sales, leases or rentals
of personal property or services.
(38) "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.
(39) "State" means any state of the United States and the
District of Columbia.
(40) "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, water, gas, and
prewritten computer software.
(41) "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.
(42) "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.
(43) "Taxpayer" means any person liable for the taxes levied
by articles fifteen and fifteen-a of this chapter or any additions
to tax,
interest and
penalties imposed by article ten of this
chapter.
(44) "Tobacco" means cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco.
(45) "Use tax" means the tax levied under article fifteen-a of
this chapter.
(46) "Use based exemption" means an exemption based on the
purchaser's use of the product or service.
(47) "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 article
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 article
fifteen-b. Additionally, other sections of this article may define
terms primarily used in the section in which the term is defined.
§11-15B-2a. Streamlined sales and use tax agreement defined.
As used in this article and articles fifteen and fifteen-a of
this chapter, the term "streamlined sales and use tax agreement" or
"agreement" means the agreement adopted the twelfth day of
November, two thousand two, by states that enacted authority to
engage in multistate discussions similar to that provided in section four of this article, except when the context in which the
term is used clearly indicates that a different meaning is intended
by the Legislature. "Agreement" includes amendments to the
agreement adopted by the implementing states in calendar year two
thousand three but does not include any substantive changes in the
agreement adopted after the Legislature enacts this section in the
year two thousand three thirty-first day of December, two thousand
three.
§11-15B-15. General transaction sourcing rules.
(a) General rule. - For purposes of articles fifteen and
fifteen-a of this chapter, the retail sale, excluding lease or
rental, of a product shall be sourced as follows:
(1) When the product is received by the purchaser at a
business location of the seller, the sale is sourced to that
business location.
(2) When the product is not received by the purchaser at a
business location of the seller, the sale is sourced to the
location where receipt by the purchaser or the purchaser's
designated donee occurs, including the location indicated by
instructions for delivery to the purchaser or donee, known to the
seller.
(3) When subdivisions (1) and (2) of this subsection do not
apply, the sale is sourced to the location indicated by an address
for the purchaser that is available from the business records of
the seller that are maintained in the ordinary course of the
seller's business when use of this address does not constitute bad faith.
(4) When subdivisions (1), (2) and (3) of this subsection do
not apply, the sale is sourced to the location indicated by an
address for the purchaser obtained during the consummation of the
sale, including the address of a purchaser's payment instrument, if
no other address is available, provided use of this address does
not constitute bad faith.
(5) When none of the previous subdivisions of this subsection
apply, including the circumstance in which the seller is without
sufficient information to apply the previous rules, then the
location will be determined by the address from which tangible
personal property was shipped, or computer software delivered
electronically was first available for transmission by the seller,
or from which the service was provided: Provided, That any location
that merely provided the digital transfer of the product sold is
disregarded for these purposes.
(b) Lease or rental. - The lease or rental of tangible
personal property, other than property identified in subsection (c)
or subsection (d) of this section, shall be sourced as follows:
(1) For a lease or rental that requires recurring periodic
payments, the first periodic payment is sourced the same as a
retail sale in accordance with the provisions of subsection (a) of
this section. Periodic payments made subsequent to the first
payment are sourced to the primary property location for each
period covered by the payment. The primary property location is as
indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the
ordinary course of business, when use of this address does not
constitute bad faith. The property location may not be altered by
intermittent use at different locations, such as use of business
property that accompanies employees on business trips and service
calls.
(2) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail sale
in accordance with the provisions of subsection (a) of this
section.
(3) This subsection does not affect the imposition or
computation of sales or use tax on leases or rentals based on a
lump sum or accelerated basis, or on the acquisition of property
for lease.
(c) Vehicles. - The lease or rental of motor vehicles,
trailers, semi-trailers, or aircraft that do not qualify as
transportation equipment, as defined in subsection (d) of this
section, shall be sourced as follows:
(1) For a lease or rental that requires recurring periodic
payments, each periodic payment is sourced to the primary property
location. The primary property location is indicated by an address
for the property provided by the lessee that is available to the
lessor from its records maintained in the ordinary course of
business, when use of this address does not constitute bad faith.
This location shall not be altered by intermittent use at different
locations.
(2) For a lease or rental that does not require recurring
periodic payments, the payment is sourced the same as a retail sale
in accordance with the provisions of subsection (a) of this
section.
(3) This subsection does not affect the imposition or
computation of sales or use tax on leases or rentals based on a
lump sum or accelerated basis, or on the acquisition of property
for lease.
(d) Sale or lease or rental of transportation equipment. -
The retail sale, including lease or rental, of transportation
equipment is sourced the same as a retail sale in accordance with
the provisions of subsection (a) of this section, notwithstanding
the exclusion of lease or rental in subsection (a) of this section.
"Transportation equipment" means any of the following:
(1) Locomotives and railcars that are utilized for the
carriage of persons or property in interstate commerce.
(2) Trucks and truck-tractors with a gross vehicle weight
rating of ten thousand pounds or greater, trailers, semitrailers,
or passenger buses that are:
(A) Registered through the international registration plan;
and
(B) Operated under authority of a carrier authorized and
certificated by the United States department of transportation or
another federal authority to engage in the carriage of persons or
property in interstate commerce.
(3) Aircraft that are operated by air carriers authorized and certificated by the U.S. department of transportation or another
federal or foreign authority to engage in the carriage of persons
or property in interstate or foreign commerce.
(4) Containers designed for use on and component parts
attached or secured on the items set forth in subdivisions (1)
through (3) of this subsection.
(e) Exceptions. - Subsections (a) and (b) of this section
shall not apply to the following goods or services:
(1) Telecommunications services, as set out in section twenty
of this article, shall be sourced in accordance with section
nineteen of this article; and
(2) Until the first day of January, two thousand six, a seller
who is primarily engaged in the retail sale of cut flowers and
flower arrangements taking the original order to sell tangible
personal property shall source the sale to the place where order
was taken. For purposes of this exception, "primarily" means more
than fifty percent of the seller's total gross sales or receipts
are derived from that activity. In determining if a seller is
primarily a florist, the total sales price of cut flowers and
floral arrangements includes separately stated delivery or service
charges. After the thirty-first day of December, two thousand
five, sales by florists shall be subject to the general sourcing
rules stated in subsection (a) of this section.
(f) Product defined. - As used in subsection (a) of this
section, "product" includes tangible personal property, custom
software or a service, or any combination thereof.
§11-15B-19. Telecommunications sourcing rule.
(a) Except for the defined telecommunication services in
subsection (c), the sale of telecommunication service sold on a
call-by-call basis shall be sourced to: (1) Each level of taxing
jurisdiction where the call originates and terminates in that
jurisdiction; or (2) each level of taxing jurisdiction where the
call either originates or terminates and in which the service
address is also located.
(b) Except for the defined telecommunication services in
subsection (c), a sale of telecommunication service sold on a basis
other than a call-by-call basis, is sourced to the customer's place
of primary use.
(c) The sale of the following telecommunication services shall
be sourced to each level of taxing jurisdiction as follows:
(1) A sale of mobile telecommunication service, other than
air-to-ground radiotelephone service and prepaid calling service,
is sourced to the customer's place of primary use, as required by
the Mobile Telecommunications Sourcing Act.
(2) A sale of post-paid calling service is sourced to the
origination point of the telecommunications signal as first
identified by either: (A) The seller's telecommunications system,
or (B) information received by the seller from its service
provider, where the system used to transport such signals is not
that of the seller.
(3) A sale of prepaid calling service is sourced in accordance
with section fifteen of this article: Provided, That in the case of a sale of mobile telecommunication service that is a prepaid
telecommunication service, the rule provided in subdivision (5),
subsection (a), section fifteen of this article shall include, as
an option, the location associated with the mobile telephone
number.
(4) A sale of a private communication service is sourced as
follows:
(A) Service for a separate charge related to a customer
channel termination point is sourced to each level of jurisdiction
in which such customer channel termination point is located.
(B) Service where all customer termination points are located
entirely within one jurisdiction or levels of jurisdiction is
sourced in such jurisdiction in which the customer channel
termination points are located.
(C) Service for segments of a channel between two customer
channel termination points located in different jurisdictions and
which segment of channel are separately charged is sourced fifty
percent in each level of jurisdiction in which the customer channel
termination points are located.
(D) Service for segments of a channel located in more than one
jurisdiction or levels of jurisdiction and which segments are not
separately billed is sourced in each jurisdiction based on the
percentage determined by dividing the number of customer channel
termination points in such jurisdiction by the total number of
customer channel termination points.
§11-15B-20. Telecommunication sourcing definitions.
For the purpose of section nineteen of this article, the
following definitions apply:
(1) "Air-to-Ground radiotelephone service" means a radio
service, as that term is defined in 47 CFR 22.99, in which common
carriers are authorized to offer and provide radio
telecommunications service for hire to subscribers in aircraft.
(2) "Call-by-call Basis" means any method of charging for
telecommunications services where the price is measured by
individual calls.
(3) "Communications channel" means a physical or virtual path
of communications over which signals are transmitted between or
among customer channel termination points.
(4) "Customer" means the person or entity that contracts with
the seller of telecommunications services. If the end user of
telecommunications services is not the contracting party, the end
user of the telecommunications service is the customer of the
telecommunication service, but this sentence only applies for the
purpose of sourcing sales of telecommunications services under
section nineteen of this article. "Customer" does not include a
reseller of telecommunications service or for mobile
telecommunications service of a serving carrier under an agreement
to serve the customer outside the home service provider's licensed
service area.
(5) "Customer channel termination point" means the location
where the customer either inputs or receives the communications.
(6) "End user" means the person who utilizes the telecommunication service. In the case of an entity, "end user"
means the individual who utilizes the service on behalf of the
entity.
(7) "Home service provider" means the same as that term is
defined in Section 124(5) of Public Law 106-252 (Mobile
Telecommunications Sourcing Act).
(8) "Mobile telecommunications service" means the same as that
term is defined in Section 124(5) of Public Law 106-252 (Mobile
Telecommunications Sourcing Act).
(9) "Place of primary use" means the street address
representative where the customer's use of the telecommunication
service primarily occurs, which must be the residential street
address or the primary business street address of the customer. In
the case of mobile telecommunications services, "place of primary
use" must be within the licensed service area of the home service
provider.
(10) "Post-paid calling service" means the telecommunication
service obtained by making a payment on a call-by-call basis,
either through the use of a credit card or payment mechanism such
as a bank card, travel card, credit card, or debit card, or by
charge made to a telephone number which is not associated with the
origination or termination of the telecommunication service. A
post-paid calling service includes a telecommunication service that
would be a prepaid calling service except it is not exclusively a
telecommunication service.
(11) "Prepaid calling service" means the right to access exclusively telecommunications services, which must be paid for in
advance and which enables the origination of calls using an access
number or authorization code, whether manually or electronically
dialed, and that is sold in predetermined units or dollars of which
the number declines with use in a known amount.
(12) "Private communication service" means a telecommunication
service that entitles the customer to exclusive or priority use of
a communications channel or group of channels between or among
termination points, regardless of the manner in which such channel
or channels are connected, and includes switching capacity,
extension lines, stations, and any other associated services that
are provided in connection with the use of such channel or
channels.
(13) "Service address" means:
(A) The location of the telecommunications equipment to which
a customer's call is charged and from which the call originates or
terminates, regardless of where the call is billed or paid.
(B) If the location in paragraph (A) of this subdivision (13)
is not known, service address means the origination point of the
signal of the telecommunications services first identified by
either the seller's telecommunications system or in information
received by the seller from its service provider, where the system
used to transport such signals is not that of the seller.
(C) If the location in paragraphs (A) and (B) of this
subdivision (13) are not known, then "service address" means the
location of the customer's place of primary use.
§11-15B-30. Monetary allowances for new technological models for
sales tax collection; delayed effective date.
(a) Monetary allowance under Model I. --
(1) The tax commissioner shall provide a monetary allowance to
a certified service provider in Model I. This allowance shall be in
accordance with the terms of the contract between the governing
board of the streamlined sales and use tax agreement and the
certified service provider. The details of this monetary allowance
shall be developed and provided through the contract process. The
contract shall provide that the allowance be funded entirely from
money collected in Model I.
(2) The contract between the governing board and the certified
service provider may base the monetary allowance to a certified
service provider on one or more of the following:
(A) A base rate that applies to taxable transactions processed
by the certified service provider; or
(B) For a period not to exceed twenty-four months following a
voluntary seller's registration through the agreement's central
registration process, a percentage of tax revenue generated for a
member state by the voluntary seller for each member state for
which the seller does not have a requirement to register to collect
the tax.
(b) Monetary allowance for Model II sellers. - The monetary
allowance to sellers under Model II may be based on the following:
(1) All sellers shall receive a base rate for a period not to exceed twenty-four months following the commencement of
participation by a seller. The base rate is set by the governing
board of the streamlined sales and use tax agreement after the base
rate has been established for Model I certified service providers.
This allowance is in addition to any vendor or seller discount
afforded by each member state at the time.
(2) Following the conclusion of the twenty-four month period,
a seller will only be entitled to a vendor discount afforded under
each member state's law at the time the base rate expires.
(c) Monetary allowance for Model III sellers and all other
sellers that are not under Models I or II. - A monetary allowance
to sellers under Model III and to all other sellers registered
under the agreement that are not sellers under Models I or II may
be allowed based on the following:
(1) For a period not to exceed twenty-four months following a
voluntary seller's registration through the agreement's central
registration process, a percentage of tax revenue generated for a
member state by the voluntary seller for each member state for
which the seller does not have a requirement to register to collect
the tax; and
(2) Vendor discounts afforded under each member state's law.
(d) Prohibition on allowance or payment of monetary
allowances. - Notwithstanding subsections (a), (b) and (c) of this
section, the tax commissioner may not allow any vendor, seller or
certified service provider any monetary allowance, discount or
other compensation for collecting and remitting the taxes levied by articles fifteen and fifteen-a of this chapter, or for making and
filing the periodic reports required by this article, or articles
fifteen and fifteen-a of this chapter, until this section is
amended by the Legislature the cost of collection study required by
the agreement is completed and the monetary allowances are based on
the results of that study, or on requirements of federal law
requiring remote sellers to collect sales and use taxes for states
that have signed the agreement.
(e) Findings and declarations. - The Legislature finds that
the vendor cost of collection study was not completed for use by
the governing board of the streamlined sales and use tax agreement
or this Legislature before this Legislature was asked to authorize
the tax commissioner to sign the streamlined sales and use tax
agreement. Additionally, no preliminary findings or conclusions of
the study regarding vendor costs of collection are available upon
which the tax commissioner or the Legislature can reasonably
project the effect the payment of the monetary allowances provided
for in subsections (a) through (c) of this section will have on net
sales and use tax collections. Because the cost of allowing
monetary allowances under collection Models I through IV may reduce
net sales and use tax collections, at least in the early years of
the agreement, because many states including this state are
experiencing revenue shortfalls, and because the Legislature is
constitutionally required to pass a balanced budget, the
Legislature finds and declares that it is both reasonable and
prudent to delay approving this aspect of the agreement until adequate information does become available and the effect the
monetary allowances will have on West Virginia sales and use tax
collections can reasonably be quantified. The Legislature declares
its support for the streamlined sales and use tax agreement by
adopting in this enactment all substantive changes in West
Virginia's sales and use tax laws necessary for West Virginia's
sales and use tax laws to be in substantial compliance with the
streamlined sales and use tax agreement. Additionally, the
Legislature declares that it can quickly act to reconsider
subsection (d) of this section once the requisite information
becomes available.
§11-15B-32. Effective date.
(a) The provisions of this article, as amended or added during
the regular legislative session in the year two thousand three,
shall take effect the first day of January, two thousand four, 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 two
thousand three, shall take effect the first day of January, two
thousand four, and apply to all sales made on or after that date.
(c) The provisions of this article, as amended or added by
this act of the Legislature, shall apply to all sales made on or
after the date of passage of this act in the year two thousand
four.
§11-15B-36. Relief from certain liability for state and local
taxes.
(a) General. - Sellers and certified service providers
registered under the streamlined sales and use tax agreement to
collect sales and use taxes imposed by this state or the economic
opportunity development district excise tax imposed by a local
jurisdiction of this state who charged and collected the incorrect
amount of sales or use taxes or district excise taxes resulting
from the seller or the certified service provider relying on
erroneous data provided by this state on tax rates, boundaries or
taxing jurisdiction assignments shall be held harmless by the tax
commissioner and the local taxing jurisdiction.
(b) Exception. - A state that is a member of the streamlined
sales and use tax agreement and provides an address-based system
for assigning taxing jurisdictions pursuant to subsection (G),
section three hundred five of the agreement subdivision (4),
subsection (d), section thirty-five of this article, or pursuant to
the federal Mobile Telecommunications Sourcing Act, is not required
to provide liability relief for errors resulting from reliance on
information provided by the member state under subsection (F) of
section three hundred five subdivision (3), subsection (d), section
thirty-five of this article.
NOTE: The purpose of this bill is: (1) To clarify that H.B.
3014, enacted during the 2003 Regular Session conforming West
Virginia's sales and use tax law to provisions of the Streamlined
Sales and Use Tax Agreement beginning January 1, 2004, did not
intend to repeal the exemption from sales taxes for durable medical goods, mobility enhancing equipment and prosthetic devices
purchased pursuant to a prescription for the item; (2) to eliminate
language in section 11-15-9 made obsolete by enactment of HB 3014,
which language pertains to mobile homes used by the purchaser as
his or her principal year-round residence and dwelling. Prior to
enactment of HB 3014, these mobile homes were taxed at 3% of the
purchase price, as provided in subdivision 11-15-9(a)(9)(16).
Beginning January 1, 2004, these mobile homes are taxed at 6% of
50% of their purchase price, as provided in subsection 11-15-3(f)
of the present law; and (3) to make additional changes in West
Virginia's sales and use tax laws conforming to the Streamlined
Sales and Use Tax Agreement, which the Legislature authorized the
Tax Commissioner to sign in March of 2003, when H.B. 3014 was
enacted. More specifically:
1. The amendment to section 11-15B-2, found in subdivision
(b)(38), which defined the term "service," incorporates the
amendment to the definition of "service" made in section 11-15-2 by
S.B. 238, which passed after H.B. 3014 was enacted in 2003.
2. The amendment to section 11-15B-2a updates the definition
of "Streamlined Sales and Use Tax Agreement" to incorporate changes
made in the Agreement by the implementing states when they met
November 19, 2003.
3. The amendments to section 11-15B-15 clarify application of
the general sourcing rules and provides exceptions to these rules.
(a) Pending federal legislation pertaining to the
Streamlined Sales and Use Tax Agreement would require state
and local taxes on communication services, including
telecommunication services, to conform to certain requirements
of the Streamlined Sales and Use Tax Agreement. In addition
to sales taxes, the term "transaction tax" includes the West
Virginia telecommunications tax and municipal public utility
taxes on telephone services. For this reason, and to assure
that West Virginia's sales and use tax laws conform to
requirements of the Streamlined Sales and Use Tax Agreement,
subdivision 11-15B-15(d)(1) and new section 11-15B-19 and 11-
15B-20 would be added to the Code.
(b) Since at least 1955, West Virginia florists who take
the original order for the sale of cut flowers and floral
arrangements have been collecting West Virginia sales tax
orders even though the beneficiary of the order (the person
who received the flowers) may be located in another State.
Nationally, this is how most, if not all, of the 46 states
require florists to collect and remit sales tax. Nationally,
many small retail florists will not be able to comply with the
destination sourcing rule in subsection 11-15B-15(a) without
incurring significant administrative expenses. Some 12,000 of
these small retail florists have no payroll. For this reason,
the Implementing States, on November 19, 2003, amended the Streamlined Sales and Use Tax Agreement to permit States to
allow florists to continue their historic current practice of
collecting and remitting sales tax until January 1, 2006. It
is anticipated that, by that date, floral delivery networks
such as FTD will have systems in place to accommodate the
destination sourcing rule in section 11-15B-15(a). Most West
Virginia florists do not have sufficient physical presence in
any other state to constitutionally require the florist to
collect taxes for another state. Similarly, florists in
other states typically do not have a constitutional presence
in West Virginia to require the out-of-state florist to
collect West Virginia sales tax on floral orders originally
taken out-of-state for delivery to persons located in West
Virginia. Subdivision 11-15B-15(e)(2) would allow florists to
continue using past practice until January 1, 2006.
(c) New subdivision 11-15B-15(f) clarifies application of
subsection 11-15B-15(a).
4. The language of new section 11-15B-19 is based upon Section
314 of the Streamlined Sales and Use Tax Agreement.
5. The language of new section 11-15B-20 is based upon Section
315 of the Streamlined Sales and Use Tax Agreement.
6. Subsections (d) and (e) of section 11-15B-30 are not part
of the Streamlined Sales and Use Tax Agreement and certain language
in subsection (d) and all of subsection (e) need to be deleted so
that West Virginia can have a seat on the governing board
administering the Streamlined Sales and Use Tax Agreement.
7. The amendment to section 11-15B-30 specifies that these
amendments are effective upon passage of this bill.
8. The amendment to section 11-15B-36 is required by the
Streamlined Sales and Use Tax Agreement and clarifies application
of the hold harmless rule.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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