West Virginia Code of State Rules › Agency 110 - Tax › Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT › Series 110-15 - Consumer Sales And Service Tax And Use Tax › Section 110-15-7 - Tax Computed on Gross Proceeds or Gross Value of Tangible Personal Property Sold to Consumers, or Consumed or Used, by the Manufacturer or Producer Thereof

Current through Register Vol. XLI, No. 28, July 12, 2024
7.1.
				Sales by Producers and Manufacturers. - A person exercising the privilege of
				producing for sale, profit or commercial use, any natural resource product or
				manufactured product and engaged in the business of selling the same at
				wholesale or retail shall collect consumers sales and service tax on the gross
				proceeds from such sales unless the transaction is exempt per se from the
				consumers sales and service tax, or the vendor, in good faith, takes from the
				purchaser a property executed exemption certificate or the purchaser's direct
				pay permit number.
7.2. Use by
				Producer or Manufacturer. - A person exercising the privilege of producing for
				sale, profit or commercial use, any natural resource product or manufactured
				product which he then uses or consumes in a manner which would be taxable had
				such person purchased the product from another person, such person shall pay
				consumers sales or use tax on the gross value of such product or products at
				the time they are first used or consumed by him in this State. "Gross value"
				shall be determined as provided in Section 7.3 of these regulations.
7.3. Determination of "Gross Value". -
				Whenever a person partially or wholly consumes or uses tangible personal
				property in this State which he produced or manufactured in this State or in
				another state, the gross value thereof for consumers sales and use tax purposes
				shall correspond as nearly as possible to the gross proceeds which such person
				would have received from the sale of such natural resource product or
				manufactured product to another person in an arms-length transaction, as that
				term is defined for federal income tax purposes. Such value shall be determined
				by application of the following rules in the order stated:
7.3.1. The value of the natural resource
				product or the manufactured product consumed or used shall be equal to the
				selling price, at the place of use or consumption, of similar products of like
				quality and character offered for sale in similar quantities by persons
				unrelated to the taxpayer.
7.3.2.
				In the absence of sales of similar natural resource products or similar
				manufactured products by other persons as a guide to value, gross value shall
				be equal to the average price at which sales of the same or a similar product
				are made during the taxable year to customers of the producer or
				manufacturer.
7.3.3. In the absence
				of sales to customers of the taxpayer as a guide to value, gross value shall be
				determined by first determining the cost of the product and adding thereto the
				average markup realized by the producer or manufacturer of the product being
				valued. The cost of the product shall include every item of cost attributable
				to that particular product, including all direct and indirect overhead
				costs.