West Virginia Code of State Rules › Agency 110 - Tax › Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT › Series 110-13 - Business And Occupational Tax › Section 110-13-2 - Imposition of Privilege Tax

Current through Register Vol. XLI, No. 28, July 12, 2024
2.1.
				Until June 1, 1995, for taxable months or taxable years beginning after
				February 28, 1989, there is levied and shall be collected annual privilege
				taxes, on account of business and other activities, and in the amount to be
				determined by the application of rates against values or gross income as set
				forth in W. Va. Code ''11-13-2d, 11-13-2e, 11-13-2m and 11-13-2n.
2.2. For taxable months or taxable years
				beginning after May 31, 1995, there is levied and shall be collected annual
				privilege taxes on account of business and other activities, and in the amount
				to be determined by the application of rates against the measure of the tax as
				set forth in Sections 2d, 2e, 2m, 2n and 2o of this rule.
2.3. Sales to affiliates.
2.3.1. In determining value in sales from one
				to another of affiliated companies or persons, or under other circumstances
				where the relation between the buyer and seller is such that the gross proceeds
				from the sale are not indicative of the true value of the subject matter of the
				sale, the tax shall be levied upon the fair market value of the subject matter
				sold, corresponding as nearly as possible to the gross proceeds which have been
				or would be realized from the sale of the same or similar electrical energy,
				utility service or products of like quality or character where no common
				interest exists between a buyer and a seller but the circumstances and
				conditions, including time and place of sale, are otherwise similar. The term
				"affiliated companies or persons" includes but is not limited to "affiliated
				groups" as defined by Internal Revenue Code 1504(a) and "parent and subsidiary
				corporations" as defined by W. Va. Code '11-23-3.
2.3.2. In determining value in regard to
				sales from one to another of affiliated companies or persons, or under other
				circumstances where the relation between the seller and buyer is such that
				gross proceeds from the sale are not indicative of the true value of the
				subject matter of the sale, the following rules shall be applied in the order
				stated.
2.3.2.1. Whenever sales are made to
				affiliates, the value shall correspond to the gross proceeds from the sale of
				similar electrical energy, utility service or products of like quality and
				character and in similar quantities between persons of no common
				interest.
2.3.2.2. If there are no
				sales between parties of no common interest by which the taxpayer may value his
				or her sales to affiliates, the value shall correspond to the gross proceeds
				from sales by the taxpayer to nonrelated purchasers of similar electrical
				energy, utility service or products of like quality and character and in
				similar quantities and shall include all subsidies and bonuses.
2.3.2.3. In the absence of sales of similar
				electrical energy, utility service or products as a guide to value, the value
				may be determined by a cost basis. In those cases there shall be included every
				item of cost attributable to the particular matter sold, including direct and
				indirect overhead, costs. There shall be added to this total cost the average
				markup realized by the taxpayer on all electrical energy, utility service or
				products sold.