Source: http://www.wvlegislature.gov/Bill_Status/bills_text.cfm?billdoc=hb4335%20intr.htm&yr=2012&sesstype=RS&i=4335
Timestamp: 2018-04-22 03:53:13
Document Index: 57759137

Matched Legal Cases: ['§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§11', '§69', '§7701', '§ 201', '§11']

(By Delegates White, Doyle and Walters)
[ By request of the Tax Division]
A BILL to amend and reenact §11-15B-2, §11-15B-2a, §11-15B-24, §11-15B-25, §11-15B-26, §11-15B-30, §11-15B-32, §11-15B-33 and §11-15B-34 of the Code of West Virginia, 1931, as amended, all relating to the administration of sales and use tax generally; adding new definitions; clarifying present definitions; incorporating changes to the Streamlined Sales and Use Tax Agreement; adding a computer software maintenance contract as a Streamlined Sales and Use Tax Agreement defined term; relieving seller of tax liability in certain instances; clarifying due dates that fall on weekends and legal holidays; eliminating monetary allowance for certain sellers; providing new effective dates; clarifying state administration of state and local sales and use taxes, bases and exceptions.
That §11-15B-2, §11-15B-2a, §11-15B-24, §11-15B-25, §11-15B-26, §11-15B-30, §11-15B-32, §11-15B-33 and §11-15B-34 of the Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 15B. SALES AND USE TAX ADMINISTRATION.
(4) "Bundled transaction" means the retail sale of two or more products, except real property and services to real property, where: (i) The products are otherwise distinct and identifiable; and (ii) the products are sold for one nonitemized price. A "bundled transaction" does not include the sale of any products in which the "sales price" varies, or is negotiable, based on the selection by the purchaser of the products included in the transaction.
(i) Packaging such as containers, boxes, sacks, bags and bottles or other materials such as wrapping, labels, tags and instruction guides that accompany the "retail sale" of the products and are incidental or immaterial to the "retail sale" thereof. Examples of packaging that are incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags and express delivery envelopes and boxes;
(ii) A product provided free of charge with the required purchase of another product. A product is "provided free of charge" if the "sales price" of the product purchased does not vary depending on the inclusion of the product "provided free of charge"; or
(i) The "retail sale" of tangible personal property and a service where the tangible personal property is essential to the use of the service and is provided exclusively in connection with the service and the true object of the transaction is the service; or
(ii) The "retail sale" of services where one service is provided that is essential to the use or receipt of a second service and the first service is provided exclusively in connection with the second service and the true object of the transaction is the second service; or
(iii) A transaction that includes taxable products and nontaxable products and the "purchase price" or "sales price" of the taxable products is de minimis;
(I) "De minimis" means the seller's "purchase price" or "sales price" of the taxable products is ten percent or less of the total "purchase price" or "sales price" of the bundled products;
(II) Sellers shall use either the "purchase price" or the "sales price" of the products to determine if the taxable products are de minimis. Sellers may not use a combination of the "purchase price" and "sales price" of the products to determine if the taxable products are de minimis;
(iv) A transaction that includes products taxable at the general rate of tax and food or food ingredients taxable at a lower rate of tax and the "purchase price" or "sales price" of the products taxable at the general sales tax rate is de minimis. For purposes of this subparagraph, the term "de minimis" has the same meaning as ascribed to it under subparagraph (iii) of this paragraph;
(v) The "retail sale" of exempt tangible personal property, or food and food ingredients taxable at a lower rate of tax, and tangible personal property taxable at the general rate of tax where:
(II) Where the seller's "purchase price" or "sales price" of the taxable tangible personal property taxable at the general rate of tax is fifty percent or less of the total "purchase price" or "sales price" of the bundled tangible personal property. Sellers may not use a combination of the "purchase price" and "sales price" of the tangible personal property when making the fifty percent determination for a transaction.
(v) Sewing materials that become part of "clothing" including, but not limited to, buttons, fabric, lace, thread, yarn and zippers.
(7) "Clothing accessories or equipment" means incidental items worn on the person or in conjunction with "clothing". "Clothing accessories or equipment" are mutually exclusive of and may be taxed differently than apparel within the definition of "clothing", "sport or recreational equipment" and "protective equipment". The following list contains examples and is not intended to be an all-inclusive list. "Clothing accessories or equipment" shall include:
(8)"Certified automated system" or "CAS" means software certified under the agreement to calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit to the appropriate state and maintain a record of the transaction.
(11) "Computer software" means a set of coded instructions designed to cause a "computer" or automatic data processing equipment to perform a task.
(12) “Computer software maintenance contract” means a contract that obligates a vendor of computer software, or other person, to provide a customer with future updates or upgrades to computer software, support services with respect to computer software or both. The term “computer software maintenance contract” includes contracts sold by a person other than the vendor of the computer software to which the contract relates.
(A) A “mandatory computer software maintenance contract” is a computer software maintenance contract that the customer is obligated by contract to purchase as a condition to the retail sale of computer software.
(B) An “optional computer maintenance contract” is a computer software maintenance contract that a customer is not obligated to purchase as a condition to the retail sale of computer software.
(12) (14) "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.
(13) (15) "Dietary supplement" means any product, other than "tobacco", intended to supplement the diet that:
(14) (16) "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.
(15) (17) "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:
(16) (18) "Durable medical equipment" means equipment, including repair and replacement parts for the equipment, but does not include "mobility-enhancing equipment", which:
(17) (19) "Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities.
(18) (20) "Eligible property" means an item of a type, such as clothing, that qualifies for a sales tax holiday exemption in this state.
(19) (21) "Energy Star qualified product" means a product that meets the energy efficient guidelines set by the United States Environmental Protection Agency and the United States Department of Energy that are authorized to carry the Energy Star label. Covered products are those listed at www.energystar.gov or successor address.
(20) (22) "Entity-based exemption" means an exemption based on who purchases the product or service or who sells the product or service. An exemption that is available to all individuals shall not be considered an entity-based exemption.
(21) (23) "Food and food ingredients" means substances, whether in liquid, concentrated, solid, frozen, dried or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. "Food and food ingredients" does not include alcoholic beverages, prepared food or tobacco.
(22) (24) "Food sold through vending machines" means food dispensed from a machine or other mechanical device that accepts payment.
(23) (25)"Fur clothing" means "clothing" that is required to be labeled as a fur product under the Federal Fur Products Labeling Act (15 U.S.C. §69) and the value of the fur components in the product is more than three times the value of the next most valuable tangible component. "Fur clothing" is human-wearing apparel suitable for general use but may be taxed differently from "clothing". For the purposes of the definition of "fur clothing", the term "fur" means any animal skin or part thereof with hair, fleece or fur fibers attached thereto, either in its raw or processed state, but shall not include such skins that have been converted into leather or suede, or which in processing the hair, fleece or fur fiber has been completely removed.
(24) (26) "Governing board" means the governing board of the Streamlined Sales and Use Tax Agreement.
(25) (27) "Grooming and hygiene products" are soaps and cleaning solutions, shampoo, toothpaste, mouthwash, antiperspirants and sun tan lotions and screens, regardless of whether the items meet the definition of "over-the-counter drugs".
(26) (28) "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.
(27) (29) "Layaway sale" means a transaction in which property is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time and, at the end of the payment period, receives the property. An order is accepted for layaway by the seller when the seller removes the property from normal inventory or clearly identifies the property as sold to the purchaser.
(28) (30) "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.
(iii) Providing tangible personal property along with an operator for a fixed or indeterminate period of time. A condition of this exclusion is that the operator is necessary for the equipment to perform as designed. For the purpose of this subparagraph, an operator must do more than maintain, inspect or set-up the tangible personal property.
(iv) "Lease" or "rental" includes agreements covering motor vehicles and trailers where the amount of consideration may be increased or decreased by reference to the amount realized upon sale or disposition of the property as defined in 26 U.S.C. §7701(h)(1).
(29) (31) "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.
(30) (32) "Mobility-enhancing equipment" means equipment, including repair and replacement parts to the equipment, but does not include "durable medical equipment", which:
(31) (33) "Model I seller" means a seller registered under the Streamlined Sales and Use Tax Agreement 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.
(32) (34) "Model II seller" means a seller registered under the Streamlined Sales and Use Tax Agreement that has selected a certified automated system to perform part of its sales and use tax functions, but retains responsibility for remitting the tax.
(33) (35) "Model III seller" means a seller registered under the Streamlined Sales and Use Tax Agreement that has sales in at least five member states, has total annual sales revenue of at least $500 million, has a proprietary system that calculates the amount of tax due each jurisdiction and has entered into a performance agreement with the member states that establishes a tax performance standard for the seller. As used in this definition, a seller includes an affiliated group of sellers using the same proprietary system.
(36) (37) "Over-the-counter drug" means a drug that contains a label that identifies the product as a drug as required by 21 CFR § 201.66. The "over-the-counter drug" label includes:
(B) A statement of the "active ingredient(s)" with a list of those ingredients contained in the compound, substance or preparation.
(37) (38) "Person" means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation or any other legal entity.
(38) (39) "Personal service" includes those:
(39) (40) (A) "Prepared food" means:
(40) (41) "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.
(41) (42) "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.
(42) (43) "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.
(43) (44) "Prosthetic device" means a replacement, corrective or supportive device, including repair and replacement parts for the device worn on or in the body, to:
(44) (45) "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.
(45) (46) "Purchase price" means the measure subject to the tax imposed by article fifteen or fifteen-a of this chapter and has the same meaning as sales price.
(46) (47) "Purchaser" means a person to whom a sale of personal property is made or to whom a service is furnished.
(47) (48) "Retail sale" or "sale at retail" means:
(48) (49) (A) "Sales price" means the measure subject to the tax levied under article fifteen or fifteen-a of this chapter and includes the total amount of consideration, including cash, credit, property and services, for which personal property or services are sold, leased or rented, valued in money, whether received in money or otherwise, without any deduction for the following:
(II) The purchaser identifies himself or herself to the seller as a member of a group or organization entitled to a price reduction or discount (a "preferred customer" card that is available to any patron does not constitute membership in such a group); or
(49) (50) "Sales tax" means the tax levied under article fifteen of this chapter.
(50) (51) "School art supply" means an item commonly used by a student in a course of study for artwork. The term is mutually exclusive of the terms "school supply", "school instructional material" and "school computer supply" and may be taxed differently. The following is an all-inclusive list:
(51) (52) "School instructional material" means written material commonly used by a student in a course of study as a reference and to learn the subject being taught. The term is mutually exclusive of the terms "school supply", "school art supply" and "school computer supply" and may be taxed differently. The following is an all-inclusive list:
(52) (53) "School computer supply" means an item commonly used by a student in a course of study in which a computer is used. The term is mutually exclusive of the terms "school supply", "school art supply" and "school instructional material" and may be taxed differently. The following is an all-inclusive list:
(53) (54) "School supply" means an item commonly used by a student in a course of study. The term is mutually exclusive of the terms "school art supply", "school instructional material" and "school computer supply" and may be taxed differently. The following is an all-inclusive list of school supplies:
(54) (55) "Seller" means any person making sales, leases or rentals of personal property or services.
(55) (56) "Service" or "selected service" includes all nonprofessional activities engaged in for other persons for a consideration which involve the rendering of a service as distinguished from the sale of tangible personal property, but does not include contracting, personal services, services rendered by an employee to his or her employer, any service rendered for resale or any service furnished by a business that is subject to the control of the Public Service Commission when the service or the manner in which it is delivered is subject to regulation by the Public Service Commission of this state. The term "service" or "selected service" does not include payments received by a vendor of tangible personal property as an incentive to sell a greater volume of such tangible personal property under a manufacturer's, distributor's or other third-party's marketing support program, sales incentive program, cooperative advertising agreement or similar type of program or agreement and these payments are not considered to be payments for a "service" or "selected service" rendered, even though the vendor may engage in attendant or ancillary activities associated with the sales of tangible personal property as required under the programs or agreements.
(56) (57) "Soft drink" means nonalcoholic beverages that contain natural or artificial sweeteners. "Soft drinks" do not include beverages that contain milk or milk products, soy, rice or similar milk substitutes or greater than fifty percent of vegetable or fruit juice by volume.
(57) (58) "Sport or recreational equipment" means items designed for human use and worn in conjunction with an athletic or recreational activity that are not suitable for general use. "Sport or recreational equipment" are mutually exclusive of and may be taxed differently than apparel within the definition of "clothing", "clothing accessories or equipment" and "protective equipment". The following list contains examples and is not intended to be an all-inclusive list. "Sport or recreational equipment" shall include:
(58) (59) "State" means any state of the United States, the District of Columbia and the Commonwealth of Puerto Rico.
(59) (60) "Tangible personal property" means personal property that can be seen, weighed, measured, felt or touched or that is in any manner perceptible to the senses. "Tangible personal property" includes, but is not limited to, electricity, steam, water, gas and prewritten computer software.
(60) (61) "Tax" includes all taxes levied under articles fifteen and fifteen-a of this chapter and additions to tax, interest and penalties levied under article ten of this chapter.
(61) (62) "Tax Commissioner" means the State Tax Commissioner or his or her delegate. The term "delegate" in the phrase "or his or her delegate", when used in reference to the Tax Commissioner, means any officer or employee of the State Tax Division duly authorized by the Tax Commissioner directly, or indirectly by one or more redelegations of authority, to perform the functions mentioned or described in this article or rules promulgated for this article.
(62) (63) "Taxpayer" means any person liable for the taxes levied by articles fifteen and fifteen-a of this chapter or any additions to tax penalties imposed by article ten of this chapter.
(63) (64) "Telecommunications service" or "telecommunication service" when used in this article and articles fifteen and fifteen-a of this chapter shall have the same meaning as that term is defined in section two-b of this article.
(64) (65) "Tobacco" means cigarettes, cigars, chewing or pipe tobacco or any other item that contains tobacco.
(65) (66) "Use tax" means the tax levied under article fifteen-a of this chapter.
(66) (67) "Use-based exemption" means an exemption based on a specified use of the product or service by the purchaser.
(67) (68) "Vendor" means any person furnishing services taxed by article fifteen or fifteen-a of this chapter or making sales of tangible personal property or custom software. "Vendor" and "seller" are used interchangeably in this article and in articles fifteen and fifteen-a of this chapter.
§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 November 12, 2002, 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 years 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011 and amendments adopted by the governing board on or before, January 31, 2010 2012, but does not include any substantive changes in the agreement adopted after January 31, 2010 2012.
When a purchaser claims an exemption from paying tax under
article fifteen or fifteen-a of this chapter:
(8) After December 31, 2007, in In the case of drop shipments, a third-party vendor such as a drop shipper may claim a resale exemption based on an exemption certificate provided by its customer/reseller or any other acceptable information available to the third-party vendor evidencing qualification for a resale exemption, regardless of whether the customer/reseller is registered to collect and remit sales and use taxes in this state, when the sale is sourced to this state.
(c) Time within which seller must obtain exemption certificates.
(d) (1) If the seller has not obtained an exemption certificate or all required data elements, the seller may shall, within one hundred twenty days subsequent to a request for substantiation by the Tax Commissioner, either prove that the transaction was not subject to tax by other means or obtain a fully completed exemption certificate from the purchaser, taken in good faith which means that the seller obtain a certificate that claims an exemption that: (i) Was statutorily available on the date of the transaction in the jurisdiction where the transaction is sourced; (ii) could be applicable to the item being purchased; and (iii) is reasonable for the purchaser's type of business; or obtain other information establishing that the transaction was not subject to the tax. For purposes of this section, the Tax Commissioner may continue to apply this state's standards of good faith until a uniform standard for good faith is defined in the Streamlined Sales and Use Tax Agreement.
(2) (e) Nothing in this section shall affect the ability of the Tax Commissioner to require purchasers to update exemption certificate information or to reapply with the state to claim certain exemptions.
(3) (f) Notwithstanding the preceding provisions of this section, when an exemption may be claimed by exemption certificate, a A seller is relieved from paying the tax otherwise applicable if the seller obtains a blanket exemption certificate from a purchaser with which the seller has a recurring business relationship. The Notwithstanding the provisions of subsection (e) of this section, the Tax Commissioner may not request from the seller renewal of blanket certificates or updates of exemption certificate information or data elements when there is a recurring business relationship between the buyer and seller. For purposes of this subdivision, a recurring business relationship exists when a period of no more than twelve months elapses between sales transactions.
(d) (g) Exception.--
The Tax Commissioner shall provide by rule, which may be an existing rule, an alternative method for making "same day" payments if an electronic funds transfer fails.
(1) If a due date for a payment falls on a Saturday, Sunday, or legal holiday, the payment, including any related payment voucher information, is due on the next succeeding business day.
(e) (f) Format of data accompanying remittance.--
(c) Monetary allowance for Model III sellers and all other sellers that are not under Model 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 Model 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) (c) Prohibition on allowance or payment of monetary allowances.
The Tax Commissioner shall conduct administer, or authorize others to conduct on his or her behalf, the sales and use tax laws of this state subject to the agreement. Sellers and purchasers are only required to register with, file returns with, and remit funds to the Tax Commissioner. The Tax Commissioner shall collect any municipal sales and use taxes and distribute them to the appropriate taxing jurisdictions. The Tax Commissioner shall conduct, or others may be authorized to conduct on his or her behalf, all audits of sellers registered under the Streamlined Sales and Use Tax Agreement and purchasers for compliance with the sales and use tax laws of this state and the sales and use tax laws of its local jurisdictions. A Except as provided herein, local jurisdictions may not conduct independent sales or use tax audits of sellers registered under the Streamlined Sales and Use Tax Agreement and purchasers.
(a) General.--The tax base of a local jurisdiction that levies a local sales or use tax pursuant to authority granted by the Legislature shall be identical to the sales and use tax base of this state, unless otherwise prohibited by federal law, except as provided in subsection (b) of this section.
NOTE: The purpose of this bill is to update code provisions to conform to the Streamlined Sales Tax Agreement. The bill adds new definitions and clarifies present definitions. The bill incorporates changes to the Streamlined Sales and Use Tax Agreement and adds computer software maintenance contracts as a Streamlined Sales and Use Tax Agreement. The bill also relieves a seller of the tax liability in certain instances, eliminates monetary allowances for certain sellers, provides new effective dates, clarifies state administration of state and local sales and use taxes, bases and exemptions.