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 110-15-8a - Contracting Services

Current through Register Vol. XLI, No. 28, July 12, 2024
8a.1.
				Persons engaged in the business of providing contracting services to other
				persons are providing a service that is generally not subject to the consumers
				sales and service tax. Such persons are generally considered to be the user or
				consumer of all tangible personal property and all services which they
				purchase. Consequently consumers sales and use taxes must be paid on all
				purchases of tangible personal property or taxable services except as otherwise
				provided in these regulations.
8a.2. The terms "contracting services" and
				"contracting" are synonymous. Thus, the term "contracting services" means the
				furnishing of work or both materials and work, for another 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 removal
				or demolition of a building or structure or any part thereof or for the
				alteration, improvement or development of real property. Beginning July 1,
				1989, the form of the contract no longer controls whether a person is providing
				a tax exempt contracting service or is providing a taxable service. The
				question in every case will be what is being done, not how is it being
				billed.
8a.3. Additionally, the
				definition of "contracting" is narrowed beginning July 1, 1989. For contracts
				entered into on or after July 1st, the work must result in a capital
				improvement to a building or other structure or to real property for the work
				to be contracting. If this condition is not met, the work provided is a taxable
				service, not contracting. When a taxable service is provided, consumers sales
				and service tax must be charged to and collected from the customer, but the
				vendor may purchase materials that will be used or consumed in making the
				taxable service free from consumers sales and use taxes by presenting a resale
				exemption certificate to the vendor.
8a.4. Not all activity of a contractor is
				treated as contracting for consumers sales and use tax purposes. For example:
8a.4.1. Contract miners and other persons
				engaged by the producer of natural resources (as defined for severance tax
				purposes) to perform any reclamation, waste disposal or environmental
				activities associated with the production of natural resources are treated as
				engaging in the activity of producing natural resources with respect to such
				activities for consumers sales and service tax and use tax purposes. Purchases
				directly used or consumed in the production of natural resources are exempt
				from tax as provided in Section 9.4.1 of these regulations. However, persons
				engaged in construction, alteration, repair or improvement of facilities to be
				used by others to produce natural resources are engaged in the activity of
				contracting and are not considered to be producing natural resources. See
				Section 107 of these regulations for additional information concerning the
				taxation of contractors.
8a.4.2.
				Merchants who sell certain types of tangible personal property and perform
				incidental installation services with respect thereto are by statute not
				engaged in contracting. They are selling tangible personal property and
				rendering taxable services.
8a.4.3.
				When a contractor sells tangible personal property without installing the
				property or arranging for its installation, the transaction is a sale of
				tangible personal property and not contracting.
8a.4.4. When the work which a contractor does
				pursuant to a contract with another does not result in a capital improvement to
				a building or other structure or to real property, the work is not contracting.
				It is the rendering of a taxable service.