Municipal Sales and Use Tax

Municipal Sales and Use Tax Guidelines

Tool Kit for Municipalities Imposing Sales and Use Taxes

Fillable Municipal Sales and Use Tax Checklist

Vendors Should Not Collect Wardensville or Wayne’s Municipal Sales and Use Taxes. July 1, 2017.

Effective January 1, 2018, in addition to the current municipalities, the following three municipalities will impose sales and use tax bringing the total number of municipalities imposing the tax to 39: Wayne, Weston, and White Hall.

The West Virginia State Tax Department administers the municipal sales and use taxes displayed in the table below. Municipal sales and use taxes apply to purchases made of taxable goods, custom software, and services provided within the boundaries of the taxing municipality. The tax applies to the same items and services as the West Virginia State sales and use tax, with a few limited exceptions.

To calculate the tax, combine the state tax rate and the municipal rate(s). Apply the combined rate to the taxable sales price and round up or down to the nearest full cent.

Report the amount of municipal sales and use taxes collected when you file your West Virginia combined sales and use tax return. Municipal sales and use taxes are reported on the municipal schedules of the return.

Follansbee

Pennsboro

Quinwood
Ranson

* The combined rate is the state sales tax rate of 6% plus the municipality’s rate of tax.

Charleston and Wheeling increased their rates effective July 1, 2015. For the periods from October 1, 2013 through June 30, 2015, the following rates were applicable for Charleston and Wheeling:

* The combined rate is the state sales tax rate of 6% plus the municipality’s rate of tax.

Comma Delimited Data Files

Boundary Table A comma-delimited data file which you can save to your computer, and then open with the program of your choice. A text editor or a spreadsheet program will work well with this type of file.

Boundary Table Description

Tax Rate Table A comma-delimited data file which you can save to your computer, and then open with the program of your choice. A text editor or a spreadsheet program will work well with this type of file.

Tax Rate Table Description

Who is required to collect Municipal Sales Tax?

All vendors/sellers who are required to collect West Virginia sales tax and who are doing business in a municipality that imposes a sales and use tax must also collect municipal sales taxes, and remit the amount collected to the State Tax Department.

This includes vendors located outside the municipality that:

  • Have an office, distribution, sales, sample or warehouse location or other place of business in the municipality, either directly or by a subsidiary;
  • Have a representative, agent, salesperson, service provider, canvasser or solicitor in municipality – on either a permanent or temporary basis – who operates under the authority of the retailer or its subsidiary for any purpose. For example: taking orders for goods or services, repairing, selling or installing tangible personal property, or leasing tangible personal property, either as lessor or as lessee, in municipality;
  • Ship or deliver tangible personal property to locations in municipality; or
  • Perform taxable services in municipality.

Municipal sales tax applies to sales made or services performed within municipality boundaries. Nine-digit codes help to determine the taxing area, but do not always correspond exactly with corporate boundaries of the municipality, so part of the numbers in a nine-digit zip code may be outside the municipality’s boundaries.

Municipal Use Tax

Municipal use tax applies when you buy items or services for use, storage, distribution or consumption in municipality without paying municipal sales tax to the seller. Use tax is similar to the sales tax and the rates are identical. It is based on the purchase price of taxable purchases.

To avoid double taxation, credit is allowed against municipal use tax for the amount of sales or use tax lawfully paid to another municipality. The credit allowed may not exceed the amount of use tax due the municipality in which the items or services are being used.

Common examples of when use tax is due include, but are not limited to:

  • A purchaser buys items outside municipality, the seller does not charge municipal sales tax and the purchaser uses or stores the item in a municipality that does impose a municipal use tax.
  • A purchaser buys a taxable item from an out-of-state seller who does not charge municipal sales or use tax.
  • A contractor purchases building materials from a seller who does not charge municipal sales tax. The contractor then uses the building materials in a contracting job in a municipality that imposes a use tax.

When to Charge a Municipal Tax

As a general rule, charge municipal sales tax on all sales made in a municipality that imposes a sales tax that are subject to the West Virginia State sales tax.

Charge municipal sales tax to customers from outside the municipality who pick up items in the municipality for business or personal use, even if the items are then taken out of the municipality for use.

Charge municipal sales tax to customers from outside the municipality if you perform taxable services for them in the municipality. For example, charge municipal sales tax on a repair to a motor vehicle that you perform in the city, even though the motor vehicle is owned by a person who lives outside the municipality.

Vehicles and Motor Fuel

Municipal sales and use tax does not apply to the sale or long term lease of motor vehicles Sales of motor vehicles are subject to the 5% DMV sales tax.

Municipal sales and use tax does not apply to the sale or use of motor fuels that are subject to the motor fuel excise taxes imposed by article 14C, chapter 11 of the Code.

Exemptions

Do not charge municipal sales tax on sales of taxable items when:

  • Your customer gives you a fully completed Certificate of Exemption for state sales tax;
  • You ship or deliver the items to your customer outside the municipal boundaries in which you have operations, facilities, employees, agents or representatives, and into an unincorporated location where municipal sales and use tax is not imposed, or into a municipality that does not impose the municipal sales and use tax; or
  • You sell direct-to-home satellite (DBS) services (not cable). These services are subject to state sales taxes, but not to municipal sales taxes. This is a federal preemption under the Federal Telecommunications Act of 1996.
  • Federal government agencies are often exempt from state and local sales and use taxes, but in situations where they are exempt, they must claim the exemption by presenting a properly-executed exemption certificate, unless the sale is subject to a per se exemption in accordance with State Tax Department Rules. (See TSD-300 Sales and Use Tax Exemptions).
  • State and local agencies (including cities, towns, counties, political subdivisions, commissions, special districts and governmental boards) claiming exemption, like federal agencies, must present the exemption certificate or direct pay permit number, unless the sale is subject to a per se exemption in accordance with State Tax Department Rules. (See TSD-300 Sales and Use Tax Exemptions).
  • Some West Virginia state agencies have Direct Pay Permits issued by the State Tax Commissioner for use when buying tangible items, and some state agencies are subject to a per se exemption in accordance with State Tax Department Rules.

Examples

In these examples, West Virginia state taxes always apply, and municipal taxes apply where indicated.

A Charleston company sells tires to a Romney company. The Charleston company delivers the tires to Romney in its own truck. The Charleston company is required to collect the Romney sales tax.

A Fairmont company picks up windows from a Morgantown supplier for use in Fairmont. Since the Fairmont company begins using the windows in Fairmont, the company is expected to pay the Fairmont use tax on the purchase prices of the windows. The Morgantown supplier does not collect the Fairmont sales tax because the windows were picked up in Morgantown where no sale tax is imposed.

A contractor buys and picks up (in his own truck) wood in a city with a tax for use in an area without a tax. Since the wood is picked up inside the boundaries of a municipality that imposes a tax, the wood is delivered to the purchaser in the municipality. Therefore, that city’s sales tax applies. If the seller were to deliver the materials to the construction site located in the area without a municipal sales and use tax, then no municipal tax would be due.

An Ohio contractor buys materials in Ohio and pays the Ohio tax. The materials are brought into West Virginia to be used at a construction site in Williamstown. Williamstown use tax is due. And since the Ohio sales tax rate is lower than West Virginia sales tax rate, a 0.25% West Virginia state use tax is due. Because the 1% Williamstown use tax rate is lower that the local sales tax rates imposed in Ohio, the construction materials will not be subject to the use tax imposed by Williamstown, West Virginia.

A person sells clothing at an event located in a city with a municipal sales tax, and the customers take possession of the items in that city. Since the sales are being made in the city, the seller must collect both the state sales tax and the municipal sales tax. This is true even if the seller is from outside the city.

A photographer takes pictures at a site where there is no municipal sales and use tax. The customer picks up the photos at the photographer’s studio in a city with a municipal sales tax. Municipal sales tax is due because delivery occurs (i.e., the customer takes possession of the photos) in a municipality with a sales tax. If the photographer mails the photos to an area with no municipal sales tax, no municipal sales tax is due.

Requirements of Municipalities Imposing Sales and Use Taxes

Municipal sales and use taxes must be administered, collected and enforced by the State Tax Commissioner. A municipality may not administer its sales tax.

A new ordinance imposing a municipal sales and use taxes may take effect no sooner than the first day of July that begins 180 days after the municipality furnishes the State Tax Commissioner with a certified copy of its ordinance imposing sales and use taxes, its boundaries database, and any other information required by the Tax Commissioner. See W. Va. Code St. R. §110-28-1 et seq.

A municipality that imposes a municipal sales and use tax and changes its municipal boundaries must promptly notify the State Tax Commissioner of the boundary change or changes; the date the boundary change(s) takes effect; and update its boundaries data base.