Source: http://www.legis.state.wv.us/Bulletin_Board/2017/1X/s_journal/sdj2017-05-16-13.htm
Timestamp: 2017-10-21 05:40:10
Document Index: 727969177

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Charleston, West Virginia, Tuesday, May 16, 2017
Prayer was offered by the Honorable Charles S. Trump IV, a senator from the fifteenth district.
Pending the reading of the Journal of Monday, May 15, 2017,
At the request of Senator Unger, unanimous consent being granted, the Journal was approved and the further reading thereof dispensed with.
Senate Executive Message 1, dated May 4, 2017, requesting confirmation by the Senate of the nominations mentioned therein. The following list of names from Executive Message 1 is submitted:
1. For Member, West Virginia Board of Physical Therapy, D.C. Offutt, Jr., Barboursville, Cabell County, for the term ending June 30, 2019.
2. For Member, West Virginia Board of Physical Therapy, Jessica Santrock, Culloden, Lincoln County, for the term ending June 30, 2020.
3. For Member, Council for Community and Technical College Education, Charles A. Parker, Ripley, Jackson County, for the term ending December 20, 2018.
4. For Member, Council for Community and Technical College Education, Kenneth Boggs, Keyser, Mineral County, for the term ending December 20, 2019.
5. For Member, Council for Community and Technical College Education, Tracy Karin Miller, Bridgeport, Harrison County, for the term ending December 20, 2018.
6. For Member, Council for Community and Technical College Education, The Honorable Harry Keith White, Gilbert, Mingo County, for the term ending December 20, 2020.
7. For Member, West Virginia Board of Education, Debra K. Sullivan, Charleston, Kanawha County, for the term ending November 4, 2025.
8. For Member, West Virginia Board of Education, Joseph Wallace, Elkins, Randolph County, for the term ending November 4, 2024.
9. For Member, Unemployment Compensation Board of Review, The Honorable Jack Yost, Wellsburg, Brooke County, for the term ending January 1, 2023.
10. For Member, Municipal Home Rule Board, Brian Jones, Morgantown, Monongalia County, to serve at the will and pleasure of the Governor.
11. For Member, Municipal Home Rule Board, Mark A. Polen, Cross Lanes, Kanawha County, to serve at the will and pleasure of the Governor.
12. For Member, National Coal Heritage Area Authority, Ralph Triplett, Branchland, Lincoln County, for the term ending June 30, 2021.
13. For Member, Industrial Council, Debra Scudiere, Westover, Monongalia County, for the term ending June 30, 2020.
14. For Member, Industrial Council, Bengy K. Swanson, Pentress, Monongalia County, for the term ending June 30, 2020.
15. For Director/State Forester, West Virginia Division of Forestry, Barry L. Cook, Beckley, Raleigh County, to serve at the will and pleasure of the Governor.
16. For Member, Design-Build Board, Richard Forren, Fairmont, Marion County, for the term ending July 7, 2017.
17. For Member, Design-Build Board, Roy M. Smith, Beckley, Raleigh County, for the term ending July 7, 2019.
18. For Member, Design-Build Board, Ronnie Spradling, St. Albans, Kanawha County, for the term ending July 7, 2019.
19. For Member, Design-Build Board, Jim Matheney, Charleston, Kanawha County, for the term ending July 7, 2017.
20. For Member, Design-Build Board, Chad Riley, Bridgeport, Harrison County, for the term ending July 7, 2017.
21. For Member, Design-Build Board, Keith A. McClanahan, Eleanor, Putnam County, for the term ending July 7, 2019.
22. For Member, Design-Build Board, David G. Hammond, Charleston, Kanawha County, for the term ending July 7, 2017.
23. For Member, Design-Build Board, Ginny Favede, Wheeling, Ohio County, for the term ending July 7, 2019.
Thereupon, Senator Carmichael (Mr. President) laid before the Senate the following executive messages:
Senate Executive Message 1, dated May 4, 2017 (shown in the Senate Journal of Thursday, May 4, 2017, pages 5 through 7, inclusive).
Senate Executive Message 2, dated May 15, 2017 (shown in the Senate Journal of yesterday, Monday, May 15, 2017, pages 3 and 4).
Senator Boley then moved that the Senate advise and consent to all of the executive nominations referred to in the foregoing report from the Committee on Confirmations.
The question being on the adoption of Senator Boley’s aforestated motion.
On this question, the yeas were: Azinger, Beach, Blair, Boley, Boso, Clements, Cline, Facemire, Ferns, Gaunch, Hall, Jeffries, Karnes, Mann, Maynard, Mullins, Ojeda, Palumbo, Plymale, Prezioso, Romano, Rucker, Smith, Swope, Sypolt, Trump, Unger, Weld, Woelfel and Carmichael (Mr. President)—30.
Absent: Maroney, Miller, Stollings and Takubo—4.
So, a majority of all the members elected to the Senate having voted in the affirmative, the President declared Senator Boley’s aforestated motion had prevailed.
Senator Boley then moved that the Senate advise and consent to all of the executive nominations referred to in Senate Executive Message 2.
Senate Bill 1005—A Bill to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §4-1-24; to amend said code by adding thereto a new section, designated §4-2-13; to amend said code by adding thereto a new section, designated §4-3-6; to amend said code by adding thereto a new article, designated §5-30-1, §5-30-2, §5-30-3, §5-30-4, §5-30-5 and §5-30-6; and to amend said code by adding thereto a new section, designated §51-3-19, all relating generally to the furlough of public employees during declared fiscal emergency; defining terms; permitting declaration of fiscal emergency by Governor under certain defined circumstances; permitting Governor to issue executive orders instituting furloughs of certain state employees; setting forth conditions of furlough; providing for termination of declared fiscal emergency; authorizing furlough of employees by constitutional officers; setting forth conditions of furlough of those employees; authorizing President of the Senate to furlough employees of State Senate; authorizing Speaker of the House of Delegates to furlough employees of the House of Delegates; authorizing President of the Senate and Speaker of the House of Delegates jointly to direct furlough of employees of Legislative Auditor and Joint Committee on Government and Finance; setting forth conditions of furlough of legislative employees; authorizing Supreme Court of Appeals to furlough employees and personnel of Supreme Court of Appeals; authorizing Supreme Court of Appeals to issue orders directing or authorizing furlough of other employees and personnel of circuit courts, family courts and magistrate courts; and setting forth terms of furlough of judicial employees.
Senate Bill 1006—A Bill to amend and reenact §11-14C-5 of the Code of West Virginia, 1931, as amended; to amend and reenact §11-15-3c and §11-15-18b of said code; to amend and reenact §17A-2-13 of said code; to amend and reenact §17A-3-4 of said code; to amend and reenact §17A-4-1 and §17A-4-10 of said code; to amend and reenact §17A-4A-10 of said code; to amend and reenact §17A-7-2 of said code; to amend and reenact §17A-10-3, §17A-10-10 and §17A-10-11 of said code; to amend said code by adding thereto a new section, designated §17A-10-3c; to amend and reenact §17B-2-1, §17B-2-3a, §17B-2-5, §17B-2-6, §17B-2-8 and §17B-2-11 of said code; to amend and reenact §17C-5A-2a of said code; and to amend and reenact §17D-2-2 of said code, all relating generally to increasing the funding for the State Road Fund; increasing rate of motor fuel excise tax as of specified date; increasing the minimum average wholesale price of motor fuels for purposes of the five percent variable fuel tax as of specified date; increasing the rate of consumers sales and service tax on sales of motor vehicles as of a specified date; deleting superfluous language relating to floorstocks; increasing Division of Motor Vehicles administrative fees, including increasing fees for various documents, records, registrations, certificates, titles, liens, releases, transfers, cards, stickers, decals, licenses and plates; requiring payment of certain fee for each attempt at the written and road skills test; increasing said administrative Division of Motor Vehicles fees every five years on September 1 based on the U. S. Department of Labor, Bureau of Labor Statistics most current Consumer Price Index; imposing annual registration fee for certain alternative fuel vehicles; and specifying effective dates.
At the request of Senator Ferns, unanimous consent being granted, reference of the bill to a committee was dispensed with, and it was taken up for immediate consideration, read a first time and ordered to second reading.
Senate Bill 1007—A Bill to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-13A-3f; to amend and reenact §11-15-2, §11-15-3, §11-15-9, §11-15-9b and §11-15-9h of said code; to amend said code by adding thereto two new sections, designated §11-15-3d and §11-15-3e; to amend and reenact §11-15A-2 and §11-15A-10 of said code; to amend and reenact §11-21-8a and §11-21-8e of said code; to amend said code by adding thereto three new sections, designated §11-21-4g, §11-21-4h and §11-21-12j; and to amend and reenact §11-24-23a of said code, all relating generally to the Tax Reform Act of 2017; imposing graduated rate severance tax on privilege of producing coal as of specified date and defining certain terms; increasing rate of consumers sales and service tax as of specified date; imposing tax on telecommunication services and ancillary telecommunication services as of specified date; imposing tax on digital code and digital products as of specified date; eliminating certain exemptions from consumers sales and service tax as of specified date; providing consumers sales and service tax exemption for services of professional employer organizations; increasing rate of use tax as of specified date; reducing number of classifications and rates of personal income tax as of January 1, 2018; providing for phase-out of personal income tax and specifying triggering event; exempting military retirement income from personal income tax after specified date; increasing amount of credit allowed against personal and corporation net income taxes for qualified building rehabilitation expenditures made after specified date; establishing limitations on carryback and carryforward of credit for qualified building rehabilitation expenditures; and making technical corrections in various sections.
On motion of Senator Ferns, the Senate recessed until 2 p.m. today.
On motion of Senator Ferns, the Senate recessed until 4 p.m. today.
At the request of Senator Ferns, and by unanimous consent, the Senate returned to the consideration of
Senate Bill 1007, Tax Reform Act of 2017.
Having been introduced, read a first time and ordered to second reading in earlier proceedings today, was again reported by the Clerk.
On motion of Senator Ferns, the constitutional rule requiring a bill to be read on three separate days was suspended by a vote of four fifths of the members present, taken by yeas and nays.
On suspending the constitutional rule, the yeas were: Azinger, Beach, Blair, Boley, Boso, Clements, Cline, Facemire, Ferns, Gaunch, Hall, Jeffries, Karnes, Mann, Maynard, Mullins, Ojeda, Palumbo, Plymale, Prezioso, Romano, Smith, Stollings, Swope, Sypolt, Trump, Unger, Weld, Woelfel and Carmichael (Mr. President)—30.
Absent: Maroney, Miller, Rucker and Takubo—4.
The bill (S. B. 1007) was read a second time.
On motion of Senator Karnes, the following amendment to the bill was reported by the Clerk:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §11-13A-3f; that §11-15-2, §11-15-3, §11-15-9, §11-15-9b and §11-15-9h of said code be amended and reenacted; that said code be amended by adding thereto two new sections, designated §11-15-3d and 11-15-3e; that §11-15A-2 and §11-15A-10 of said code be amended and reenacted; that §11-21-8a and §11-21-8e of said code be amended and reenacted; that said code be amended by adding thereto three new sections, designated §11-21-4g, §11-21-4h and §11-21-12j; that §11-24-23a of said code be amended and reenacted; and that said code be amended by adding thereto a new section, designated §11-24-4c, all to read as follows:
(1) “Business” includes all activities engaged in or caused to be engaged in with the object of gain or economic benefit, direct or indirect, and all activities of the state and its political subdivisions which involve sales of tangible personal property or the rendering of services when those service activities compete with or may compete with the activities of other persons.
(2) “Communication” means all telephone, radio, light, light wave, radio telephone, telegraph and other communication or means of communication, whether used for voice communication, computer data transmission or other encoded symbolic information transfers and includes commercial broadcast radio, commercial broadcast television and cable television.
(3) “Contracting”:
(A) In general. “Contracting” means and includes the furnishing of work, or both materials and work, for another (by a sole contractor, general contractor, prime contractor, subcontractor or construction manager) in fulfillment of a contract for the construction, alteration, repair, decoration or improvement of a new or existing building or structure, or any part thereof, or for removal or demolition of a building or structure, or any part thereof, or for the alteration, improvement or development of real property. Contracting also includes services provided by a construction manager so long as the project for which the construction manager provides the services results in a capital improvement to a building or structure or to real property.
(i) The term “structure” includes, but is not limited to, everything built up or composed of parts joined together in some definite manner and attached or affixed to real property or which adds utility to real property or any part thereof or which adds utility to a particular parcel of property and is intended to remain there for an indefinite period of time;
(ii) The term “alteration” means, and is limited to, alterations which are capital improvements to a building or structure or to real property;
(iii) The term “repair” means, and is limited to, repairs which are capital improvements to a building or structure or to real property;
(iv) The term “decoration” means, and is limited to, decorations which are capital improvements to a building or structure or to real property;
(v) The term “improvement” means, and is limited to, improvements which are capital improvements to a building or structure or to real property;
(vi) The term “capital improvement” means improvements that are affixed to or attached to and become a part of a building or structure or the real property or which add utility to real property, or any part thereof, and that last or are intended to be relatively permanent. As used herein, “relatively permanent” means lasting at least a year in duration without the necessity for regularly scheduled recurring service to maintain the capital improvement. “Regular recurring service” means regularly scheduled service intervals of less than one year;
(vii) Contracting does not include the furnishing of work, or both materials and work, in the nature of hookup, connection, installation or other services if the service is incidental to the retail sale of tangible personal property from the service provider’s inventory: Provided, That the hookup, connection or installation of the foregoing is incidental to the sale of the same and performed by the seller thereof or performed in accordance with arrangements made by the seller thereof. Examples of transactions that are excluded from the definition of contracting pursuant to this subdivision include, but are not limited to, the sale of wall-to-wall carpeting and the installation of wall-to-wall carpeting, the sale, hookup and connection of mobile homes, window air conditioning units, dishwashers, clothing washing machines or dryers, other household appliances, drapery rods, window shades, venetian blinds, canvas awnings, free-standing industrial or commercial equipment and other similar items of tangible personal property. Repairs made to the foregoing are within the definition of contracting if the repairs involve permanently affixing to or improving real property or something attached thereto which extends the life of the real property or something affixed thereto or allows or intends to allow the real property or thing permanently attached thereto to remain in service for a year or longer; and
(viii) The term “construction manager” means a person who enters into an agreement to employ, direct, coordinate or manage design professionals and contractors who are hired and paid directly by the owner or the construction manager. The business activities of a “construction manager” as defined in this subdivision constitute contracting, so long as the project for which the construction manager provides the services results in a capital improvement to a building or structure or to real property.
(4) (6) “Directly used or consumed” in the activities of manufacturing, transportation, transmission, communication or the production of natural resources means used or consumed in those activities or operations which constitute an integral and essential part of the activities, as contrasted with and distinguished from those activities or operations which are simply incidental, convenient or remote to the activities.
(5) (7) “Directly used or consumed” in the activities of gas storage, the generation or production or sale of electric power, the provision of a public utility service or the operation of a utility business means used or consumed in those activities or operations which constitute an integral and essential part of those activities or operation, as contrasted with and distinguished from activities or operations which are simply incidental, convenient or remote to those activities.
(6) (8) “Gas storage” means the injection of gas into a storage reservoir or the storage of gas for any period of time in a storage reservoir or the withdrawal of gas from a storage reservoir engaged in by businesses subject to the business and occupation tax imposed by sections two and two-e, article thirteen of this chapter.
(7) (9) “Generating or producing or selling of electric power” means the generation, production or sale of electric power engaged in by businesses subject to the business and occupation tax imposed by section two, two-d, two-m or two-n, article thirteen of this chapter.
(8) (10) “Gross proceeds” means the amount received in money, credits, property or other consideration from sales and services within this state, without deduction on account of the cost of property sold, amounts paid for interest or discounts or other expenses whatsoever. Losses may not be deducted, but any credit or refund made for goods returned may be deducted.
(9) (11) “Includes” and “including”, when used in a definition contained in this article, does not exclude other things otherwise within the meaning of the term being defined.
(10) (12) “Manufacturing” means a systematic operation or integrated series of systematic operations engaged in as a business or segment of a business which transforms or converts tangible personal property by physical, chemical or other means into a different form, composition or character from that in which it originally existed.
(11) (13) “Person” means any individual, partnership, association, corporation, limited liability company, limited liability partnership or any other legal entity, including this state or its political subdivisions or an agency of either, or the guardian, trustee, committee, executor or administrator of any person.
(12) (14) “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, shoe shining, manicuring and similar services.
(13) (15) “Prepaid wireless calling service” means a telecommunications service that provides the right to utilize mobile wireless service as well as other nontelecommunications services, including the download of digital products delivered electronically, content and ancillary services, which must be paid for in advance that is sold in predetermined units or dollars of which the number decline with use in a known amount.
(A) “Production of natural resources” means, except for oil and gas, the performance, by either the owner of the natural resources or another, of the act or process of exploring, developing, severing, extracting, reducing to possession and loading for shipment and shipment for sale, profit or commercial use of any natural resource products and any reclamation, waste disposal or environmental activities associated therewith and the construction, installation or fabrication of ventilation structures, mine shafts, slopes, boreholes, dewatering structures, including associated facilities and apparatus, by the producer or others, including contractors and subcontractors, at a coal mine or coal production facility.
(B) For the natural resources oil and gas, “production of natural resources” means the performance, by either the owner of the natural resources, a contractor or a subcontractor, of the act or process of exploring, developing, drilling, well-stimulation activities such as logging, perforating or fracturing, well-completion activities such as the installation of the casing, tubing and other machinery and equipment and any reclamation, waste disposal or environmental activities associated therewith, including the installation of the gathering system or other pipeline to transport the oil and gas produced or environmental activities associated therewith and any service work performed on the well or well site after production of the well has initially commenced.
(C) All work performed to install or maintain facilities up to the point of sale for severance tax purposes is included in the “production of natural resources” and subject to the direct use concept.
(D) “Production of natural resources” does not include the performance or furnishing of work, or materials or work, in fulfillment of a contract for the construction, alteration, repair, decoration or improvement of a new or existing building or structure, or any part thereof, or for the alteration, improvement or development of real property, by persons other than those otherwise directly engaged in the activities specifically set forth in this subdivision as “production of natural resources”.
(15) (17) “Providing a public service or the operating of a utility business” means the providing of a public service or the operating of a utility by businesses subject to the business and occupation tax imposed by sections two and two-d, article thirteen of this chapter.
(16) (18) “Purchaser” means a person who purchases tangible personal property, custom software or a service taxed by this article.
(17) (19) “Sale”, “sales” or “selling” includes any transfer of the possession or ownership of tangible personal property, digital code, digital products, or custom software for a consideration, including a lease or rental, when the transfer or delivery is made in the ordinary course of the transferor’s business and is made to the transferee or his or her agent for consumption or use or any other purpose. “Sale” also includes the furnishing of a service for consideration. Notwithstanding anything to the contrary in this code, effective after the thirtieth day of June, two thousand eight, “sale” also includes the furnishing of prepaid wireless calling service for consideration.
(18) (20) “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, digital code, digital products, or custom software, but does not include contracting, personal services or the services rendered by an employee to his or her employer or any service rendered for resale: Provided, That 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
(19) (21) “Streamlined Sales and Use Tax Agreement” or “agreement”, when used in this article, has the same meaning as when used in article fifteen-b of this chapter, except when the context in which the word “agreement” is used clearly indicates that a different meaning is intended by the Legislature.
(20) (22) “Tax” includes all taxes, additions to tax, interest and penalties levied under this article or article ten of this chapter.
(21) (23) “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.
(22) (24) “Taxpayer” means any person liable for the tax imposed by this article or additions to tax, penalties and interest imposed by article ten of this chapter.
(23) (25) “Transmission” means the act or process of causing liquid, natural gas or electricity to pass or be conveyed from one place or geographical location to another place or geographical location through a pipeline or other medium for commercial purposes: Provided: That on and after July 1, 2017, transmission shall not include the conveyance by pipeline of natural gas, natural gas liquids, oil or other mineral.
(24) (26) “Transportation” means the act or process of conveying, as a commercial enterprise, passengers or goods from one place or geographical location to another place or geographical location.
(25) (27) “Ultimate consumer” or “consumer” means a person who uses or consumes services, digital code, digital products, or personal property.
(26) (28) “Vendor” means any person engaged in this state in furnishing services taxed by this article or making sales of tangible personal property, digital code, digital products, or custom software. “Vendor” and “seller” are used interchangeably in this article.
(a) Vendor to collect. For the privilege of selling tangible personal property, digital code, digital products or custom software and for the privilege of furnishing certain selected services defined in sections two and eight of this article, the vendor shall collect from the purchaser the tax as provided under this article and article fifteen-b of this chapter, and shall pay the amount of tax to the Tax Commissioner in accordance with the provisions of this article or article fifteen-b of this chapter.
(b) Amount of tax. The general consumer sales and service tax imposed by this article shall be at the rate of 6¢ on the dollar six percent of the sales price of sales or services tangible personal property, digital code, digital product, custom software or taxable service purchased, excluding gasoline and special fuel sales, which remain taxable at the rate of 5¢ on the dollar of sales five percent: Provided, That on and after July 1, 2017, the tax imposed by this article shall be six and ninety-five hundredths percent of the purchase price, excluding sales of motor vehicles, which shall remain taxable as provided in section three-c of this article, and sales of motor fuels, which remain taxable at the rate of five percent of the average wholesale selling price of motor fuel.
(c) Calculation tax on fractional parts of a dollar until January 1, 2004. — There shall be no tax on sales where the monetary consideration is 5¢ or less. The amount of the tax shall be computed as follows:
(e) (d) No aggregation of separate sales transactions, exception for coin-operated devices. — Separate sales, such as daily or weekly deliveries, shall not be aggregated for the purpose of computation of the tax even though the sales are aggregated in the billing or payment therefor. Notwithstanding any other provision of this article, coin-operated amusement and vending machine sales shall be aggregated for the purpose of computation of this tax.
(f) (e) Rate of tax on certain mobile homes. – Notwithstanding any provision of this article to the contrary, after December 31, 2003, the tax levied on sales of mobile homes to be used by the owner thereof as his or her principal year-round residence and dwelling shall be an amount equal to six percent of fifty percent of the sales price: Provided, That on and after July 1, 2017, notwithstanding any provision of this article to the contrary, the tax levied on sales of mobile homes to be used by the owner thereof as his or her principal year-round residence and dwelling shall be an amount equal to six and ninety-five hundredths percent of fifty percent (50%) of the sales price.
(g) (f) Construction; custom software. – After December 31, 2003, whenever Whenever the words “tangible personal property” or “property” appear in this article, the same shall also include the words “custom software”.
(1) “Designated digital products” means digital audio works, digital audio-visual works, digital books, video game digital products and digital automated services that are electronically transferred to a purchaser.
(3) “Digital audio works” means works that result from the fixation of a series of musical, spoken, or other sounds including ringtones. Digital audio works includes such items as the following which may either be prerecorded or live: songs, music, readings of books or other written materials, speeches, ringtones, or other sound recordings. Digital audio works does not include audio greeting cards sent by electronic mail. Unless the context provides otherwise, in this chapter digital audio works includes the digital code, or a subscription to or access to a digital code, for receiving, accessing, or otherwise obtaining digital audio works.
(A) “Digital automated service,” except as provided in paragraph (B) of this subdivision (3), means any service transferred electronically that uses one or more software applications.
(B) “ Digital automated service “ does not include:
(ii) The loaning or transferring of money or the purchase, sale, or transfer of financial instruments. For purposes of this section, “financial instruments” include cash, accounts receivable and payable, loans and notes receivable and payable, debt securities, equity securities, as well as derivative contracts such as forward contracts, swap contracts, and options;
(A) “Digital goods,” except as provided in this subdivision, means sounds, images, data, facts, or information, or any combination thereof, transferred electronically, including, but not limited to, designated digital products and other products transferred electronically not included within the definition of designated digital products.
(B) The term “ digital goods “ does not include:
(8) “Digital products” means digital audio-visual works, digital audio works, digital automated services, digital books, other digital products and designated digital products.
(9) “Electronically transferred” or “transferred electronically” means obtained by the purchaser by means other than tangible storage media. It is not necessary that a copy of the product be physically transferred to the purchaser. So long as the purchaser may access the product, it will be considered to have been electronically transferred to the purchaser.
(10) “Internet access service” means a service that enables users to access content, information, electronic mail, or other services offered over the Internet and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. The term does not include telecommunications services.
(C) Video or electronic games.
(D) Newspapers or other news or information products.
(23) (22) 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;
(31) (30) 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 may be claimed without presenting or obtaining exemption certificates provided the farmer maintains adequate records;
(37) (35) Commissions received by a manufacturer’s representative;
(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:
(a) Sales of tangible personal property and services after June 30, 2002, directly used or consumed in the activity of research and development are exempt from tax imposed by this article. Any person having a right or claim to the exemption set forth in this section 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 give to the vendor the person’s West Virginia direct pay permit number in accordance with the provisions of section nine-d of this article.
(1) “Directly used or consumed in the activity of research and development” means used or consumed in those activities or operations which constitute an integral and essential part of research and development, as contrasted with and distinguished from those activities or operations which are simply incidental, convenient or remote to research and development.
(2) “Research and development” means systematic scientific, engineering or technological study and investigation in a field of knowledge in the physical, computer or software sciences, often involving the formulation of hypotheses and experimentation, for the purpose of revealing new facts, theories or principles, or increasing scientific knowledge, which may reveal the basis for new or enhanced products, equipment or manufacturing processes. Research and development includes, but is not limited to, design, refinement and testing of prototypes of new or improved products, or design, refinement and testing of manufacturing processes before commercial sales relating thereto have begun. For purposes of this section commercial sales include, but are not limited to, sales of prototypes or sales for market testing.
(c) No provision of this section may be interpreted to alter, abrogate or impede application of the exemption for sales of primary opinion research services set forth in section nine of this article
(a) An excise tax is hereby levied and imposed on the use in this state of tangible personal property, digital code, digital products, custom software or taxable services, to be collected and paid as provided in this article or article fifteen-b of this chapter, at the rate of six percent of the purchase price of the property or taxable services, except as otherwise provided in this article: Provided, That on and after July 1, 2017, the tax imposed by this article shall be collected and paid, as provided in this article or article fifteen-b of this chapter, at the rate of six and ninety-five hundredths percent of the purchase price of the tangible personal property, digital code, digital products, custom software or taxable services, except as otherwise provided in this article.
(c) “Taxable services,” for the purposes of this article, means services of the nature that are subject to the tax imposed by article fifteen of this chapter. In this article, wherever the words “tangible personal property” or “property” appear, the same shall include the words “or taxable services,” where the context so requires.
(d) Use tax is hereby imposed upon every person using tangible personal property, custom software, digital code, digital product, or telecommunication service, ancillary services, or other taxable service within this state. That person’s liability is not extinguished until the tax has been paid. A receipt with the tax separately stated thereon issued by a retailer engaged in business in this state, or by a foreign retailer who is authorized by the Tax Commissioner to collect the tax imposed by this article, relieves the purchaser from further liability for the tax to which the receipt refers.
(c) At that time, each retailer, seller or certified service provider shall file with the Tax Commissioner a return for the preceding monthly period, except as otherwise provided in this article or article fifteen‑b of this chapter, in the form prescribed by the Tax Commissioner showing the sales price of any or all tangible personal property, custom software and taxable services sold by the retailer or seller during the preceding quarterly period, the use of which is subject to the tax imposed by this article, and any other information the Tax Commissioner may consider necessary for the proper administration of this article. The return shall be accompanied by a remittance of the amount of the tax, for the period covered by the return, except as otherwise provided in this article or article fifteen‑b of this chapter: Provided, That where the tangible personal property or custom software is sold under a conditional sales contract, or under any other form of sale wherein the payment of the principal sum, or a part of the sum is extended over a period longer than sixty days from the date of the sale, the retailer may collect and remit each monthly period that portion of the tax equal to six six and ninety-five hundredths percent of that portion of the purchase price actually received during the monthly period.
(f) Accelerated payment. —
(2) For purposes of complying with subdivision (1) of this subsection, the taxpayer shall remit an amount equal to the amount of tax imposed by this article and article fifteen of this chapter on actual taxable sales of tangible personal property and custom software and sales of taxable services during the first fifteen days of June or, at the taxpayer’s election, taxpayer may remit an amount equal to fifty percent of taxpayer’s liability for tax under this article on taxable sales of tangible personal property and custom software and sales of taxable services made during the preceding month of May.
(a) General. – For taxable years beginning on and after January 1, 2018 but before January 1, 2019, the tax imposed by section three of this article shall be determined under either subsections (b) or (c) of this section, as appropriate.
$35,000 or more but less than $250,000 $1,042.50 plus 5.65% of taxable
$250,000 or more $13,190.00 plus 6.0% of taxable
income in excess of $250,000
$10,000 or more but less than $17,500 $225 plus 3.95% of taxable
$17,500 or more but less than $125,000 $521.25 plus 5.65% of taxable
$125,000 or more $6,595.00 plus 6% of taxable
§11-21-4h. Rate of tax – Taxable years beginning on or after January 1, 2019.
(a) General. – For taxable years beginning on and after January 1, 2019, the tax imposed by section three of this article shall be determined under either subsections (b), (c) or (d) of this section, as appropriate.
$35,000 or more but less than $250,000 $917.50 plus 5.45% of taxable
$250,000 or more $12,635.00 plus 6.0% of taxable
$10,000 or more but less than $17,500 $185 plus 3.65% of taxable
$17,500 or more but less than $125,000 $458.75 plus 5.45% of taxable
Over $125,000 $6,317.50 plus 6% of taxable
(d) Personal income tax rate reduction in years subsequent to 2019.
(1) Beginning in 2018, and each fiscal year thereafter in which the net amount of the increase in the general revenue fund from the previous rate reduction trigger exceeds $110 million, adjusted upward by one-half of the annual growth in the consumer price index for the current fiscal year, as compared to the consumer price index for the immediately preceding fiscal year, the rates of tax specified in subsections (b) and (c) of this section shall reduce by one-tenth of one percentage point until the rates become zero: Provided, That each rate reduction required by this subdivision shall take effect for the tax year that begins immediately after the current fiscal year ends.
(2) In any fiscal year when subdivision (1) of this subsection does not apply, but the net amount of increase deposited in the general revenue fund is 65% or more of the annually adjusted $110 million amount, adjusted upward by one-half of the annual growth in the consumer price index for the current fiscal year as compared to the consumer price index for the immediately preceding fiscal year, there shall be no rate reduction for the tax year immediately after the current fiscal year ends.
(3) In any fiscal year when subdivisions (1) and (2) of this subsection do not apply, but the net amount of increase deposited in the general revenue fund is less than 65% of the annually adjusted $110 million amount, adjusted upward by one-half of the annual growth in the consumer price index for the current fiscal year as compared to the consumer price index for the immediately preceding fiscal year, there shall be no rate reduction for the tax year immediately after the current fiscal year ends; and the annually adjusted $110 million amount, adjusted upward by one-half of the annual growth in the consumer price index for the current fiscal year as compared to the consumer price index for the immediately preceding fiscal year, shall be increased by 150 percent for the next ensuing fiscal year.
(4) When subdivision (3) of this subsection applies, and in the next ensuing fiscal year the increase in net revenue deposited in the general revenue fund exceeds 150 percent of the annually adjusted $110 million amount specified in subdivision (3), then the reduction of the rates of tax specified in subsection (b) and (c) shall resume for the taxable year that begins immediately after the current fiscal year.
(e) Rules.
(1) “Consumer price index” means the most recent consumer price index for all urban consumers published by the United States Department of Labor.
(2) “Consumer price index for any fiscal year” shall for purposes of this section mean the average of the federal consumer price index as of the close of the twelve-month period ending on the thirtieth day of June for the fiscal year.
(f) All tax liabilities, if any arising for tax years that begin prior to the tax year in which the rates of tax in subsections (b) and (c) become zero, shall be determined, administered, assessed, and collected using the tax rate or rates in effect for the taxable year in issue.
Certified historic structures. – For certified historic structures, the credit is equal to ten percent of qualified rehabilitation expenditures as defined in §47(c)(2), Title 26 of the United States Code, as amended: Provided, That for qualified rehabilitation expenditures made after June 30, 2017, the credit allowed by this section is equal to twenty-five percent of the qualified rehabilitation expenditure: Provided, however, That the credit authorized by this section for qualified rehabilitation expenditures made after June 30, 2017, may not be used to offset tax liabilities prior to the tax year beginning January 1, 2019: Provided further, That the taxpayer may not be entitled to this credit if the taxpayer is in arrears in the payment of any tax administered by the Tax Division or the taxpayer is delinquent in the payment of property taxes on the property containing the certified historic tax structure when the applicant begins to claim the credit and throughout the time period within which the credit is claimed. The Tax Commissioner shall promulgate procedural rules in accordance with article three, chapter twenty-nine-a of this code that provide what information must accompany any claim for the tax credit for the determination that the taxpayer is not in arrears in the payment of any tax administered by the Tax Division nor is the taxpayer delinquent in the payment of property taxes on the property containing the certified historic tax structure. This credit is available for both residential and nonresidential buildings located in this state, that are reviewed by the West Virginia Division of Culture and History and designated by the national park service, United States department of the interior as “certified historic structures,” and further defined as a “qualified rehabilitated building,” as defined under §47(c)(1), Title 26 of the United States Code, as amended.
Certified historic structures. – For certified historic structures, the credit is equal to ten percent of qualified rehabilitation expenditures as defined in §47(c)(2), Title 26 of the United States Code, as amended: Provided, That for qualified rehabilitation expenditures made after June 30, 2017, the credit allowed by this section is equal to twenty-five percent of the qualified rehabilitation expenditure: Provided, however, That the credit authorized by this section for qualified rehabilitation expenditures made after June 30, 2017, may not be used to offset tax liabilities prior to the tax year beginning January 1, 2019; Provided further, That the taxpayer may not be entitled to this credit if the taxpayer is in arrears in the payment of any tax administered by the Tax Division or if the taxpayer is delinquent in the payment of property taxes on the property containing the certified historic tax structure when the applicant begins to claim the credit and throughout the time period within which the credit is claimed. The Tax Commissioner shall promulgate procedural rules in accordance with article three, chapter twenty-nine-a of this code that provide what information must accompany any claim for the tax credit for the determination that the taxpayer is not in arrears in the payment of any tax administered by the Tax Division nor is the taxpayer delinquent in the payment of property taxes on the property containing the certified historic tax structure. This credit is available for both residential and nonresidential buildings located in this state that are reviewed by the West Virginia Division of Culture and History and designated by the national park service, United States department of the interior as “certified historic building”, and further defined as a “qualified rehabilitated building”, as defined under §47(c)(1), Title 26, of the United States Code, as amended.
On motions of Senators Prezioso, Beach, Facemire, Jeffries, Ojeda, Palumbo, Plymale, Romano, Stollings, Unger and Woelfel, the following amendments to Senator Karnes’ amendment to the bill (S. B. 1007) were reported by the Clerk and considered simultaneously:
On pages forty-seven and forty-eight, by striking out all of section four-g;
The question being on the adoption of the amendments offered by Senators Prezioso, Beach, Facemire, Jeffries, Ojeda, Palumbo, Plymale, Romano, Stollings, Unger and Woelfel to Senator Karnes’ amendment to the bill (S. B. 1007), and on this question, Senator Unger demanded the yeas and nays.
The roll being taken, the yeas were: Beach, Facemire, Jeffries, Ojeda, Palumbo, Plymale, Prezioso, Romano, Stollings, Sypolt, Unger and Woelfel—12.
The nays were: Azinger, Blair, Boley, Boso, Clements, Cline, Ferns, Gaunch, Hall, Karnes, Mann, Maynard, Mullins, Smith, Swope, Trump, Weld and Carmichael (Mr. President)—18.
So, a majority of those present and voting not having voted in the affirmative, the President declared Senators Prezioso, Beach, Facemire, Jeffries, Ojeda, Palumbo, Plymale, Romano, Stollings, Unger and Woelfel amendments to Senator Karnes’ amendment to the bill rejected.
The question now being on the adoption of Senator Karnes’ amendment to the bill, the same was put and prevailed.
Engrossed Senate Bill 1007 was then read a third time and put upon its passage.
On the passage of the bill, the yeas were: Azinger, Blair, Boley, Boso, Clements, Cline, Ferns, Gaunch, Hall, Karnes, Mann, Maynard, Mullins, Smith, Swope, Sypolt, Trump, Weld and Carmichael (Mr. President)—19.
The nays were: Beach, Facemire, Jeffries, Ojeda, Palumbo, Plymale, Prezioso, Romano, Stollings, Unger and Woelfel—11.
So, a majority of all the members present and voting having voted in the affirmative, the President declared the bill (Eng. S. B. 1007) passed.
Eng. Senate Bill 1007—A Bill to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-13A-3f; to amend and reenact §11-15-2, §11-15-3, §11-15-9, §11-15-9b and §11-15-9h of said code; to amend said code by adding thereto two new sections, designated §11-15-3d and §11-15-3e; to amend and reenact §11-15A-2 and §11-15A-10 of said code; to amend and reenact §11-21-8a and §11-21-8e of said code; to amend said code by adding thereto three new sections, designated §11-21-4g, §11-21-4h and §11-21-12j; to amend and reenact §11-24-23a of said code; and to amend said code by adding thereto a new section, designated §11-24-4c, all relating generally to the Tax Reform Act of 2017; imposing graduated rate severance tax on privilege of producing coal as of specified date and defining certain terms; increasing rate of consumers sales and service tax as of specified date; imposing tax on telecommunication services and ancillary telecommunication services as of specified date; imposing tax on digital code and digital products as of specified date; eliminating certain exemptions from consumers sales and service tax as of specified date; providing consumers sales and service tax exemption for services of professional employer organizations; increasing rate of use tax as of specified date; reducing number of classifications and rates of personal income tax as of January 1, 2018; providing for phase-out of personal income tax and specifying triggering event; exempting military retirement income from personal income tax after specified date; increasing amount of credit allowed against personal and corporation net income taxes for qualified building rehabilitation expenditures made after specified date; establishing limitations on carryback and carryforward of credit for qualified building rehabilitation expenditures; increasing rate of corporation net income tax as of specified date; and making technical corrections in various sections.
On this question, the yeas were: Azinger, Beach, Blair, Boley, Boso, Clements, Cline, Facemire, Ferns, Gaunch, Hall, Jeffries, Karnes, Mann, Maynard, Mullins, Ojeda, Palumbo, Plymale, Prezioso, Romano, Smith, Stollings, Swope, Sypolt, Trump, Unger, Weld, Woelfel and Carmichael (Mr. President)—30.
So, two thirds of all the members elected to the Senate having voted in the affirmative, the President declared the bill (Eng. S. B. 1007) takes effect July 1, 2017.
On motion of Senator Ferns, the Senate adjourned until tomorrow, Wednesday, May 17, 2017, at 11 a.m.