Administrative Decisions are issued by and Administrative Law Judge following an assessment against a taxpayer, petition for reassessment filed and a hearing held on the record.

CSST -- SUCCESSOR IN BUSINESS STATUTE APPLICABLE – Petitioner’s purchase of a stock of goods, fixtures, telephone system, etc., makes it a successor in business under W. Va. Code § 11-10-11(f)(2) because the statute is not narrowly crafted to tax only the purchase of capital stock, goodwill, and other intangibles.
SUCCESSOR IN BUSINESS STATUTE IS NOT PRE-EMPTED BY PREDECESSOR’S FAILURE TO PAY -- West Virginia Code § 11-10-11(f)(2).

01-074

USE TAX – ASSESSMENT REVISED – Purchase of professional medical services, mandatory continuing education services, and contracting services, including relocation payments made to Petitioner for rights-of-way, will be deleted from the measure of the assessment when proof of same is presented at hearing.

01-099

WITHHOLDING TAX – OFFICER LIABILITY UNFOUNDED – Petitioner who was not the one required to collect, account for and pay over the withholding tax, nor the one who had the authority to make or to supervise the day-to-day financial decisions or operations of the corporation and by his own testimony was not in any way involved in the management of said corporation, is not personally liable for its withholding tax debt pursuant to W. Va. Code § 11-10-19(a).

01-187

SEVERANCE TAX – ADDITIONAL FREIGHT OUT NOT ALLOWED – Tax auditor’s employing valuation regulations pursuant to 110 C.S.R. 13A, §§ 4.4.2.1, 4.4.2.2, and 4.4.2.3 to reflect the manner in which Petitioner’s timber products were transported for milling pre-empts using 110 C.S.R. 13A, § 4.7.4.6., because that regulation is clearly to be employed in lieu of those other regulations and not in addition thereto.

01-381

CSST – ERECTING SCAFFOLDING IS NOT A CONTRACTING ACTIVITY – The lease and erection of scaffolding is all subject to consumers’ sales and service tax because, (1) a lease of tangible personal property, such as scaffolding constitutes the sale of tangible personal property under the sales tax statute W. Va. Code. § 11-15-2(a), without any differentiation because the lease and erection were separately stated; (2) the same also involves the rental of equipment with operator, without, again any differentiation because the items were separately stated, 110 C.S.R. 15, § 129.5.2.1; and (3) the erection of the scaffolding itself does not constitute a capital improvement because the same is always torn down and moved from job to job. 110 C.S.R. 15, § 107.2.7.3.4.
USE TAX – CRANE RENTAL WITH OPERATOR SUBJECT TO TAX – Because the crane rental with operator was directed by the Petitioner in the accomplishment of the assigned task, the same is subject to use tax pursuant to 110 C.S.R. 15, §§ 129.5.2.2 and 129.5.2.2a.

01-406

CSST -- LIABILITY OF CORPORATE OFFICER -- For periods covered by the current, legislatively approved regulations which became effective on May 1, 1992, a person who is in fact an officer of a corporation is personally liable for the unpaid consumers’ sales and service tax liability of the corporation by virtue of his or her status as an officer with any actual managerial authority, regardless of whether the officer had the authority to make or to supervise directly the day-to-day financial decisions on behalf of the corporation, and regardless of whether the officer knew of the corporation’s default with respect to its consumers’ sales and service tax obligations. See 110 C.S.R. 15, §§ 4a.5 & 4a.5.2 (May 1,1992); see also W. Va. Code § 64-7-6(rr) (1992).
WITHHOLDING TAX -- LIABILITY FOR "MONEY PENALTY" (TAX) AS A PERSON "REQUIRED" TO COLLECT, ACCOUNT FOR, AND PAY OVER TRUST FUND TAX ON BEHALF OF CORPORATION AND WHO "WILLFULLY" FAILED TO DO SO

01-623C

CONSUMERS’ SALES AND SERVICE TAX – PETITIONER QUALIFIES AS A HEALTH AND FITNESS ORGANIZATION – Petitioner’s fitness activities, which consisted of a personalized fitness program for each of its members, qualifies it as a health and fitness organization exempt from the collection of consumers’ sales and service tax pursuant to W. Va. Code § 11-15-9(a)(35).

01-685

CSST -- "PROFESSIONAL SERVICES" EXCEPTION -- NOT APPLICABLE TO SERVICES OF LICENSED REMEDIATION SPECIALIST -- The statutory exception from the consumers’ sales and service tax for "professional services," see W. Va. Code §§ 11-15-8 and 11-15-2(s), does not apply to the furnishing of services by a "licensed remediation specialist," because, under governing standards, a license as a remediation specialist may be obtained by (among other things) showing certain relevant practical experience for a stated minimum number of years (and having earned a high school diploma but not a relevant degree from an accredited college or university ) (called the "alternative track"), in lieu of showing a relevant degree from an accredited college or university (and fewer years of such practical experience) (called the "standard track"). To help prevent "the exception from swallowing the general rule" that services are subject to the consumers’ sales and service tax, see W. Va. Code §§ 11-15-6 and 11-15-8, a relevant degree from an accredited college or university is required to satisfy the minimum education element of the four-part test for determining whether a service, not explicitly identified as "professional" in the consumers’ sales and service tax / use tax legislative regulations, is, nonetheless, to be considered as "professional" for purpose of that exception from the consumers’ sales and service tax / use tax, see 110 C.S.R. 15, § 8.1.1.1 (May 1, 1992).

Admin. Dec. 96-531 Consumer Sales and Service Tax

Reimbursements for freight charges incurred on behalf of automobile dealership’s customers, which freight charges were initially paid to common carriers, are not subject to consumers sales and service tax as long as the Petitioner is not engaged in the business of shipping freight, and said charges were not incurred with the object of gain or economic benefit.

Admin. Dec. 98-193 Purchasers’ Use Tax -- Transmission of Natural Gas

	Petitioner was in the business of making wholesale sales of natural gas which it had purchased from other suppliers. Petitioner’s witness testified that the sales price of all of its natural gas, including that purchased from others, is regulated by the Federal Energy Regulatory Commission. It was the Petitioner’s witness" testimony that FERC established the price by basing it not only upon the cost of the natural gas but also upon the cost to move and store it.
	Legislative enactment of the transmission definition in former W. Va. Code § 11-15-2(r), and the language contained in the applicable regulations adopted thereafter, show that the use tax exemption provided in former W. Va. Code § 11-15-9(g) is limited to purchases pertaining to the conveyance of natural gas for others for consideration and not with respect to the sale of one’s own natural gas.
	Use tax exemption provided in former W. Va. Code § 11-15-9(v), as interpreted in 110 C.S.R. 15, §§ 9.4.4 and 9.4.4.2, only applies to purchases made in connection with activities subject to business and occupation tax and is not therefore applicable to wholesale sales of natural gas, which are not subject to that tax.

Admin. Dec. 98-224 Severance Tax

Where Petitioner’s timber sale contract allowed him to purchase all of the timber on the stump, the exclusive right to sever the timber, and the freedom to sell the logs for whatever price that he could obtain, when read together, show that Petitioner was indeed the owner of the timber after severance and is the one with the true economic interest in the same. 110 C.S.R. 13A, §§ 3.5, 3.5.1, and 3.5.2, et seq.

The fact that Petitioner’s timber sale agreement provided that the seller is to pay all taxes is not controlling because: (1) a taxpayer cannot contract away his or her tax liability; (2) the State Tax Department, not being a signatory to the agreement, is not bound by its terms; and (3) absent proof by the Petitioner that all severance taxes have been paid, the same remain his legal responsibility.

Admin. Dec. 95-457 Consumer Sales and Purchasers’ Use Tax

	During the assessment period the Petitioner was in the business of drilling air shafts and water wells for coal mines, as well as receiving income from the repair of air and water pumps. The terminology used for permitting purposes is "bore holes" that are drilled for the purposes of ventilating and dewatering mining operations.
	W. Va. Code § 11-15-2(o), prior to being amended in 1998, provides that the alteration of real property which does not constitute the exploring, developing, severing or reducing to possession of natural resource products constitutes contracting and not the production of natural resources.
	The fact that a witness can testify that he drafted legislation intending to exempt from taxation a certain activity is not persuasive; courts and quasi-judicial tribunals do not consider the motives of legislators who draft legislation because there is no guaranty that other legislators who supported that bill did so for the same motives or reasons. Statutory changes are intended to be prospective in nature unless expressly made to be retrospective.
	Due to the large number of invoices and uncertainty as to which vendors charged use tax, the presiding administrative law judge took the unprecedented step of agreeing to decide only the contracting versus production of natural resources issue in the administrative decision. The parties would then have a specified period of time in which to meet to decide which invoices were tax exempt.

Admin. Dec. 86-006 Business and Occupation Tax

Petitioner is an out of state corporation that performs work for a power generating plant in West Virginia. The Petitioner has two different methods of entering into contracts to perform work for the generating company: 1) turn-key contracts where a bid is accepted and specified tasks are completed for a fixed sum; and 2) craft service support agreements which were entered into yearly, are general in nature and basically determine each parties responsibilities, duties, and obligations with regard to the providing of personnel to the company by the Petitioner, the terms of payment, and the allocation of liabilities.

In the case of Frame Electric, Inc. v. Caryl, 174 W. Va. 84, 365 S.E. 2d 364 (1986), the West Virginia Supreme Court of Appeals ruled that work performed on industrial machinery that is a structure is taxable for business and occupation tax purposes under the service classification and not the contracting classification if the same is provided at an hourly rate under an open-ended contract(s).

Based upon the ruling of the W. Va. Supreme Court of Appeals in the Frame Electric case, Petitioner's craft service support agreements are open-ended contracts billed on an hourly basis and are taxable for business and occupation tax purposes under the service classification and not under the contracting classification.

Admin. Dec. 99-233 Consumer Sales and Service Tax

Taxpayer paid consumer sales tax on membership fee to property owners association. The claim for refund was partially denied on the ground that the request for refund of tax paid prior to June 1, 1997, was not filed within the statute of limitations, specifically, within two years after payment of the tax.

In compliance with the recent decision rendered by the West Virginia Supreme Court of Appeals in Houyoux, dba Aerolease v. Paige, No. 26214 (W. Va. Dec. 3, 1999), the State Tax Department shall allow refund of erroneously paid consumers sales and service tax, or purchasers’ use tax, even if such claim for refund was filed outside the two-year tax-payment period but prior to the expiration of the three-year period within which the vendor had filed a return.

Admin. Dec. 98-307 Consumer Sales and Service Tax

	Petitioner, a nationwide bookseller, requested audit information regarding other taxpayers similarly situated. The Department refused. It is unlawful for any officer or employee of the State of West Virginia to divulge or otherwise make known the tax information of another taxpayer (individual or business entity) in connection with Petitioner’s tax audit.
	Petitioner collects membership fees for its discount book club. Purchase discounts, discount coupons, discount programs with other participating vendors, and the like, are services which are being provided to members in exchange for yearly fees and, therefore, do not constitute bona fide dues tax exempt under 110 C.S.R. 15, § 52.5. The definition of intangible personal property, i.e., chattel interests, real and personal, money, credits, investments and the evidences thereof, does not encompass membership fees providing purchase discounts and the like for members.
	Not even a portion of the membership fees can be considered tax exempt as bona fide dues in this case since no amount was separately stated or identified and where no showing was made that a portion of the fees did not include charges for services and/or benefits rendered to its members (Reg. § 52.5).
	Reliance upon taxable and nontaxable safe harbor percentages set forth in Administrative Notice 91-16 is misplaced because said notice was limited to country clubs, the notice had no precedential value, and no showing was ever made that Petitioner’s fee income or any part thereof was not associated with either the rendering of services, the sale of tangible personal property or the providing of benefits to its members.

Admin. Dec. 91-151 Business Franchise Tax

Taxpayer stated that the Division's disallowance of its subsidiary credits was based upon the supposition that Petitioner failed to meet the fifty percent ownership requirement of W. Va. Code § 11-23-3(b)(16) as applied to corporations. The taxpayer company is a partnership and not a corporation and is therefore not subject to the fifty percent ownership requirement for corporations. Further, W. Va. Code § 11-23-17(c) sets forth a clear distinction between "subsidiary corporation" and "partnership" in allowing the credit for taxes paid between related entities.

Ownership percentage requirement under W. Va. Code § 11-23-3(b)(16) applies only to (subsidiary) corporations and not to partnership(s) and therefore subsidiary credits were improperly disallowed.

Admin. Dec. 95-357 Consumers Sales And Service Tax

	Contractor who receives commission based upon the difference between the wholesale price of the materials to be erected and the retail price of those same materials is a sales agent for the supplier, and the commission received from the supplier is subject to consumers sales and service tax.
	No double taxation exists when contractor erroneously charges consumers sales and service tax to customers based upon its contracting services which are actually exempt but fails to pay consumers sales and service tax upon its taxable commissions.

Admin. Dec. 96-288 Purchasers’ Use Tax

Where a taxpayer engaged in the business of fabricating and/or installing replacement parts for barges, tug boats, and other watercraft, purchases a dry dock for the purpose of raising vessels out of the water so that measurements can be taken or drawings made in preparation for the fabrication and/or installation of parts, the dry dock is not "directly used or consumed" in manufacturing activity within the meaning of W. Va. Code, 11-15-9(g)(1993) [now, Code ? 11-15-9(b)(2)] and 110 W. Va. C.S.R. 15-2.27.12, so as to render the purchase of the dry dock exempt from purchasers’ use tax pursuant to W. Va. Code, ? 11-15A-3(a)(2).

When a dry dock is purchased from a buyer and detached from a river bank in another state, transported to West Virginia by river, and stored for three months prior to its attachment to the taxpayer’s river bank site in West Virginia, the dry dock is "tangible personal property" subject to purchasers’ use tax pursuant to W. Va. Code ? 11-15A-3(a)(2). The Petitioner has failed to meet its burden of proving that purchases of tangible personal property other than the dry dock were not subject to purchasers’ use tax.

Admin. Dec. 95-273Purchasers’ Use Tax

Petitioner performs telephone data collection for litigation consulting firm. The company does not collect data from interviewees residing in the State of West Virginia. The Petitioner conducts business by receiving questionnaires on computer disk which a client has developed, and then Petitioner conducts mail intercept interviews using that questionnaire.

Tax Commissioner, found that the reports, compilations, and other results which were transferred to clients located outside of West Virginia, were all an indispensable part of the overall service being performed. Sales of services in interstate commerce, where the final product, whether in the form of reports, compilations, or other results, is an indispensable part of the overall service being performed, are exempt from sales or use tax. 110 C.S.R. 15 § 30.1, et. seq.

Admin. Dec. 91-500 Severance Tax

Petitioner claims assessment was based on amount which represented transportation costs incurred from Petitioner's coal processing facility to the customer through a coal loading facility unrelated to the Petitioner. Petitioner cites 110 C.S.R. 13A §5.7 et. seq. to show that such outgoing freight charges were clearly deductible from the gross proceeds of sale if same were actually paid to a common carrier for delivery of natural resources to a bona fide purchaser.

Freight charges paid by the Petitioner to a common carrier to deliver coal from Petitioner’s crusher to an unrelated loading facility and then to the customer are fully deductible from the gross proceeds of sale pursuant to 110 C.S.R. 13A, ? 5.7 et. seq.

Admin. Dec. 99-280 Consumer Sales and Service Tax

	During the assessment period the Petitioner was engaged in the business of instructing students in the art of tai kwon do karate. The students pay tuition fees which entitles them to attend a certain number of classes in order to be proficient in karate. Petitioner did collect sales tax with respect to said tuition fees.
	Charges for memberships or services provided by health and fitness organizations relating to personalized fitness programs are exempt from sales tax under W. Va. Code § 11-15-9(a)(35).
	Tax exemption was proven applicable by karate academy where ninety-five (95) percent of all students enrolled did so for health and fitness reasons rather than for self defense, where fitness programs were often tailored for particular students, and where the health benefits derived included general conditioning and fitness, as well as lowering cholesterol, blood pressure, and weight, and thereby was like the services provided by gymnasiums, health clubs, and fitness spas.

Admin. Dec. 98-339 Broad Based Health Care Provider

	The Taxpayer contracts with three categories of professionals. The first group is composed of psychologists; some of whom are licensed and some are not. The second and third are counselors and social workers, who like the psychologists are comprised of those who are licensed as well as those who are not. Unlicensed counselors and social workers are also required to be supervised by licensed counselors and social workers until such time as they too pass the exam and receive their licenses to practice.
	Counseling and social work services performed by both licensed and yet to be licensed persons do not constitute the rendering of "psychological services" as defined in W. Va. Code §11-27-18(c)(3) because said persons are performing such services independent of the actual psychological services portion of the business.
	The definition of psychological services in W. Va. Code §11-27-18(c)(3) does not limit the application of the tax to those who hold a license, but, rather, the tax is also to be applied to unlicensed persons performing psychological services under the supervision of a licensed psychologist.
	Program services provided exclusively by Petitioner’s counselors to corporate employees are not taxable as psychological services under W. Va. Code §11-27-18, et seq.

Admin. Dec. 95-317 Consumers Sales and Service Tax

W. Va. Code ? 11-15-16(b) requiring taxpayers, who in the previous calendar year had monthly consumers sales tax payments in excess of $100,000, to make an accelerated payment in the next year is not applicable in a merger situation where Petitioner retained its own legal identity and where case law prohibits the same to be construed against the Petitioner in the absence of a statute which on its face says otherwise.

Admin. Dec. 98-193 Purchasers’ Use Tax

	Based upon the WV Supreme Court’s conclusion in Shawnee Bank, Inc. v. Paige, (1997), as to the manner in which tax exemption statutes are to be construed, and the Kanawha County Circuit Court ruling in the case of Devon Energy Corp. v. Williams (1991), the intent of former W. Va. Code § 11-15-9(7) was not to totally exempt all purchases made by a transmission company, but only those pertaining to its transmission business, which does not include a wholesale sales business.
	Legislative enactment of the transmission definition in former W. Va. Code § 11-15-2(r), and the language contained in the applicable regulations adopted thereafter, show that the use tax exemption provided in former W. Va. Code § 11-15-9(g) is limited to purchases pertaining to the conveyance of natural gas for others for consideration and not with respect to the sale of one’s own natural gas.
	Use tax exemption provided in former W. Va. Code § 11-15-9(v), as interpreted in 110 C.S.R. 15, §§ 9.4.4 and 9.4.4.2, only applies to purchases made in connection with activities subject to business and occupation tax and is not therefore applicable to wholesale sales of natural gas, which are not subject to that tax.

Admin. Dec. 97-315 Consumer Sales and Service Tax

	Petitioner, a convenience store, claimed to be engaged in a true joint venture arrangement which would preclude taxing Petitioner’s share as a commission. An addendum to a lease/supply contract was offered as evidence.
	Although requested to do so, Petitioner’s refusal and/or failure to produce the original document in question as required by 110 C.S.R. 15, §§ 14.a and 14.b precludes a finding that the parties were engaged in a true joint venture during the assessment period since the Petitioner has not shown that the assessment is incorrect and contrary to law, in whole or in part.

As a result of Petitioner having inadequate and insufficient tax records at the time of audit the tax auditor was allowed to use sampling and projection auditing methods and the best information available in order to properly reflect Petitioner’s business operations. 110 C.S.R. 15, §§ 14b.3.2 and 14b.4.

Admin. Dec. 97-112 Special Fuel Excise Tax

Petitioner, while engaged in the business of cleaning barges and barge related tanks, purchased gasoline without paying tax. This business qualifies as a user of gasoline and as such is liable for the tax on all the actual metered gallons of gasoline which it purchased and used.

The State Tax Department has the authority to issue a gasoline and special fuel excise tax assessment against a user of gasoline or special fuel who fails to pay the tax at the time of purchase. W. Va. Code §§ 11-14-4, 11-14-2(23). West Virginia Code § 11-14-11 requires that the gasoline and special fuel excise tax be paid at the time of purchase, even though said fuel will be used off highway and would, therefore, be subject to a tax refund if used in such a manner and if a timely refund claim is filed.

 

Admin. Dec. 00-058 International Registration Plan Fee

	The DMV issued two 100% registration fee assessments against the Petitioner who engaged in the business of concrete supply in four states. In the audit year, vehicle trip records were grossly inadequate. Petitioner submitted copies of Ohio use tax returns, and other unsupported reports.
	Under the rules established by IRP, if the required records are not made available for audit, the registrant may be assessed by all jurisdictions affected fees and penalties based upon an estimation of the operation by the base jurisdiction or may be assessed 100% registration fees for the base state (emphasis in original).
	The extent of the noncompliance with record keeping requirements warrants a "penalty" of the 100% fee, even though such a fee may necessarily result in multiple fee calculations.

Admin. Dec. 86-789, 86-781, 87-791 Special Fuel Use Tax

Petitioners engaged in the business of transporting products by barge or other watercraft.

	This series of cases used a variety of arguments regarding Article I, Section 8, Clause 3 of the United States Constitution (the "Commerce Clause") and Amendment XIV, Section 1 of the United States Constitution (the "Due Process Clause") because the tax is not fairly related to services provided to Petitioner by the State of West Virginia and it discriminates against interstate commerce.
	Petitioners also argued the tax is an unlawful Duty of Tonnage, violates the spirit of the Northwest Ordinance and Virginia Compact and ignores Article V, Section 1 of the West Virginia Constitution.

The tax imposed by Code § 11-15A-13, particularly with respect to use taxes paid by Petitioner after July 1, 1985, is invalid in accordance with the holding of the Circuit Court of Kanawha County in Waterways Association of Pittsburgh v. Rose Civil Action No. 84-C-2814 (Kanawha County, April 18, 1986), wherein that court held that Code § 11-15A-13 is unconstitutional and without effect after June 30, 1985. At the request of the State Tax Commissioner’s counsel, the Circuit Court amended its original Order on June 9, 1986, to provide:

That all use taxes collected from plaintiff’s members pursuant to W. Va. Code § 11-15A-13 for periods after July 1, 1985, shall be deemed to be overpayments of said use tax and plaintiff’s members shall be entitled to refunds, provided that proper claims are filed pursuant to the procedures set forth in W. Va. Code Section 11-10-14.

The final circuit court order held: (1) that West Virginia Code § 11-15-18 was constitutional and valid in every respect; (2) that it was not violative of the Northwest Ordinance;(3) that it was not an unlawful delegation of legislative authority under Article V, Section I of the Constitution of West Virginia; (4) that it was not a duty of tonnage, pursuant to Article I, Section 10, Clause 3 of the United States Constitution; (5) that it did not violate the Commerce Clause, Article I, Section 8, Clause 3 of the Constitution of the United States; (6) that West Virginia Code § 11-15A-13 was constitutional and valid in every respect between the date of its enactment and June 30, 1985, inclusive, the last day that W. Va. Code § 11-10A-1 et. seq. was in effect, and for the same reasons that W. Va. Code § 11-15-18 was constitutional and valid; and (7) that W. Va. Code § 11-15A-13 was unconstitutional and without effect after June 30, 1985, as it discriminates against interstate commerce, and therefore, violates Article I, Section 8, Clause 3 of the United States Constitution.

	On December 19, 1986, the West Virginia Supreme Court of Appeals refused to hear an appeal of the aforesaid ruling of the Circuit Court of Kanawha County.
	State Tax Department cannot compel Petitioner to pay gasoline and special fuel use tax assessment subsequent to June 30, 1985 because the statute was declared by the circuit court to be unconstitutional after that date.
	The State Tax Department will deny all of a petition for refund of gasoline and special fuel use tax in a case in which the Petitioner fails to delineate those purchases which were made during the time period for which a circuit court had held the statute to be unconstitutional.

Admin. Decs. 99-020, 99-023, 99-116, 98-422, 95-452

Consumer Sales and Service Tax

The Petitioner’s dancers work a forty (40)-hour week and dance routines established by the Petitioner, the fact remains that the dancers possess considerable freedom when actually performing their dance routines and when fraternizing with customers. Since they are treated as independent contractors for payment purposes, said dancers are independent contractors and not employees for sales and use tax purposes.

Pursuant to 110 C.S.R. 15, ? 33.4.5, a service is purchased for resale when it is subcontracted out by the person who was contracted with to perform the service initially. However, the regulation is not applicable in this instance since the Petitioner is not collecting tax from its customers on the value of the dance services which it claims are being resold and because Petitioner’s customers are not seeking to purchase or are in fact purchasing the services of an exotic dancer by payment of a cover charge but are merely granted admission for the purpose of obtaining entertainment services to be provided by the Petitioner.

Massaging services performed by exotic dancers are not exempt since the skill level is not the same as rendered by a masseuse or a masseur and because the dancers are not performing the activities of kneading, rubbing, or manipulating, to condition the body, as required by 110 C.S.R. 15, ? 80.1. Fraternizing, unlike barbering and manicuring does not require that touching take place for the service to be rendered, therefore, the activity of fraternization does not constitute a personal service under 110 C.S.R. 15, ? 35.1.

Admin. Decs. 98-225 C, 98-226 U, 98-227 C, 98-228 U, 98-229 C, 98-230 U, 98-231 C, 98-232 U, 98-233 C, 98-234 U, 98-235 C, 98-236 U, 98-237 C, 98-238 U, 98-239 C, 98-240 U, 98-241 C, 98-242 U – Consumer Sales and Service Tax

	Strip club operators licensed to sell alcoholic beverages set the price of such drinks and mandate that no interaction between dancers and customers commence without payment thereof. The operators treat same as alcoholic beverages on their books and records are subject to sales and use tax on the full amount of the drinks sold and cannot deduct the portion ultimately kept by the dancers.
	West Virginia Code ? 11-15-2(i) defines "gross proceeds" as the amount of money received by the vendor without any deduction for the cost of goods sold or any other expense.

Although exotic dancers are considered to be independent dancers for withholding tax and employment tax purposes, cases cited by the Petitioners are not precedent in sales and use tax cases to authorize the exclusion of the dancers’ share of the income from the Petitioners’ gross proceeds. The Petitioners and not the dancers controlled the money, used an outside accountant to verify same, and where the Petitioners made sure that all payments were made before any services or activities were performed by the dancers.

Petitioners’ reliance upon the Lakeview Inn and Country Club case, thereby analogizing that payments made to dancers are the same as tips paid to banquet staff, is misplaced since Petitioners, alone, set the price for lap dances, couch dances, massages, manicures, etc., and where payment thereof is not discretionary on the part of the dancers.

Admin. Dec. 97-611 PS – Personal Income Tax

An individual’s belief that the action or inaction of government concerning a collateral matter has deprived him or her of federal or state constitutional rights does not justify a refusal to file tax returns or to pay taxes. Similarly, a religious belief in conflict with the payment of taxes affords no basis for resisting the tax.

Admin. Dec. 99-236 PS –Personal Income Tax

Petitioner's failure to timely file his 1995 personal income tax return as required by W. Va. Code § 11-21-15 and his failure to proffer any defense as to why the untimely filing occurred as further required by W. Va. Code § 11-10-9 mandates that the assessment be upheld in total.

Admin. Dec. 94-161 RN CORPORATION NET INCOME TAX

The Circuit Court of Kanawha County in the case of Bell Atlantic-West Virginia, Inc. v. Paige ruled that W. Va. Code § 11-24-6(b)(5) was violative of Article X, § 1 of the West Virginia Constitution and therefore unconstitutional thereby mandating that Petitioner’s claim for refund be granted.

Admin. Dec. 96-459 RC – Personal Property Tax

	Petitioner claims refund is due to an exemption on its purchases of tangible personal property directly used in the performance of environmental quality or protection work for a customer engaged in the business of transmission. Refund denied due to previous finding in earlier administrative decision involving said Petitioner.
	Based upon the refusal of the West Virginia Supreme Court of Appeals to hear the State Tax Department’s petition for appeal from the ruling of the Circuit Court of Jackson County reversing the earlier administrative decision in favor of the State Tax Department, the consumers sales and service tax refund plus all statutory interest is granted.

Admin. Dec. 99-097 P – Personal Income Tax

	Under W. Va. Code § 11-10-9, a taxpayer must bear the burden of proving that a tax assessment is incorrect or invalid, in whole or in part.
	The State Tax Department will not waive additions to tax included in a personal income tax assessment against a taxpayer for his failure to pay tax expected to be due at the due date of the return, when the taxpayer did not provide any justifiable cause for his failure to comply with the duty to pay tax when due.

Admin. Dec. 98-393 WS, 98-395 NS, 98-396 FNS – Corporate Income Tax

The State Tax Commissioner will affirm the estimated tax assessments against a taxpayer who fails to carry its burden of proof with respect to the actual tax liabilities due the State of West Virginia during the assessment periods.

Admin. Dec. 90-163 B & 90-164 C – B&O Tax, Consumer Sales and Service

When a petition for reassessment shows clearly on its face, along with supporting documentation, that the assessment should be adjusted to reflect the correct amount of tax due for that audit period or periods, the same will be so adjusted.

Admin. Dec. 84-366 -- B&O Tax

Pending business and occupation tax assessment can be withdrawn in instances where it is independently verified that further action is meaningless, given the fact that the Petitioner has ceased to exist, has no assets, and there is no successor corporation.

Admin. Dec. 95-059 CS(R) – Consumer Sales and Service Tax

Pursuant to W. Va. Code § 11-10-18(a)(1)-(2), additions to tax may be waived when the failure to file and/or pay the required tax was due to reasonable cause and was not due to willful neglect.

Admin. Dec. 85-380 B, 85-381 B

Valuation of items manufactured in West Virginia and sold at retail here must be calculated at one hundred percent (100%) of the retail sales price, in accordance with BOT Reg. § 2.05(B) (1974).

Admin. Dec. 92-673 – Corporate Income Tax

Petitioner appeals assessment of corporate income tax since available net operating loss carried back to assessment date would eliminate the increased income tax due. The tax was abated.

Admin. Dec. 83-079B – B&O Tax

State Tax Department will abate a business and occupation tax assessment to comply with the holdings in the Armco and Ashland Oil decisions of the United States Supreme Court. B&O Tax abated.

Admin. Dec. 91-233PS

Petitioner showed reasonable cause for waiver of additions to tax under W. Va. Code § 11-10-18(a) (1)-(2), since the Internal Revenue Code allows a taxpayer a period not to exceed two (2) years in which to file an amended return reflecting what gain, if any, was derived from the sale of one’s personal residence. Assessment modified, additions to tax waived.

Admin. Dec. 94-484G – Consumer Sales and Service Tax

	Purchases of groceries and other items used or consumed by towboat crew while the vessel is on the river are not considered to be directly used or consumed in the transportation business and are not, therefore, exempt from the imposition of use tax.
	Where Petitioner did not show that transactions between affiliated companies were at arm’s length, and where the books of the two (2) companies did not indicate that such was the case, Petitioner is not entitled to the resale exemption.

WV Judicial Determinations

General Corporate Decisions

¨ Kerner v. Affordable Living, Inc. (WV 2002) Mobile home dealer transferred its name and inventory to a new corporation with former majority shareholder continuing as plurality shareholder. The court "pierced the corporate veil".

STATE EX REL. SMITH V. EVANS, 2001 W. Va. LEXIS 46 (S. Ct. 2001)

	The majority of the stockholders of a solvent, going corporation, in the absence of fraud, or conduct amounting to fraud, and so long as they keep within their charter, have the uncontrollable right to manage the corporate affairs, and a court of equity will not interfere at the instance of a minority of the stockholders, by receivers or otherwise, to control corporate acts or management.
	A court is without jurisdiction to reinstate a corporate officer removed pursuant to the lawful acts of a corporation's directors absent a finding of fraud or statutory authority. While the officers and directors of a business corporation are accorded rather broad latitude in the conduct of the affairs of the corporation, they occupy a fiduciary relationship toward it and its shareholders. The same fiduciary relationship exists on the part of the majority shareholders of a business corporation toward its minority shareholders.
	While the Court did not reach the issue of whether the removal of a corporate officer pursuant to the corporate by-law procedures and within the requirements established by West Virginia Code § 31-1-104 could constitute oppressive conduct on its own, the Court cited an Oregon Court that concluded that the removal of a director was not oppressive conduct where the removal vote was accomplished by a 3-2 vote of the board of directors rather than by the shareholders.

NICHOLAS LOAN & MORTG., INC. V. WEST VA. COAL CO-OP, INC.. 2001 W. Va. LEXIS 16 (S. Ct. 2001)

The Court interprets various provisions of the West Virginia Uniform Fraudulent Transfers Act, W. Va. Code, 40-1A-1 to -12 [1986].

The case concerns whether a lien filed by a third party against a debtor's assets, with the debtor's approval, constitutes a "transfer" under the Act. It does. The owners of the corp. transferred, by lien, property to their son. The same property was used to secure loan from third party. The Court held this was a transfer under the Fraudulent Transfer Act and that determining "fraud" is left to jury.

SENKUS V. ROMANO, 207 W. Va. 659, 535 S.E.2d 724 (S. Ct. 2000)

	During a visit to veterinarian, Plaintiff in this case tripped over a necessary piece of equipment in plain sight and not interfering with the traffic pattern of the office. The Court affirmed the Circuit Court holding that the veterinarian was not negligent.
	Business landowners or possessors now owe any non-trespassing entrant a duty of reasonable care under the circumstances. The Court abolished the distinction between licensees and invitees.

BOWERS V. WURZBURG, 207 W. Va. 28, 528 S.E.2d 475 (S. Ct. 1999)

Defendant owned property that she leased to a gas station operator. The lease provided that defendant would receive a percentage of gross sales. A fire at the gas station damaged plaintiffs' property. Defendant obtained summary judgment dismissing her from the action against her lessee. The court reversed, finding material questions of fact on the issues of whether proper precautions were taken and whether defendant was engaged in a joint venture with her lessee.

The use of a "percentage clause" in a commercial lease, whereby the landlord receives a percentage of sales or profits in addition to or in lieu of the base rent, may be viewed as evidence that a joint venture exists.

ARMOR V. LANTZ, 207 W. Va. 672, 535 S.E.2d 737 (S. Ct. 2000)

	The allegation of malpractice involves the issue of vicariously liable of local counsel for the conduct of Ohio co-counsel The Court concluded that local counsel was not vicariously liable because appellants failed to raise a triable issue as to whether a joint venture existed in this case, as the record showed that local counsel had not agreed to undertake active management and control of appellants' lawsuit in federal court.
	A joint venture is an association of two or more persons to carry out a single business enterprise for profit, for which purpose they combine their property, money, effects, skill, and knowledge. It arises out of a contractual relationship between the parties. The contract may be oral or written, express or implied. While a joint venture is frequently likened to a partnership, the two are distinguished: A partnership relates to a general business while a joint adventure relates to a single business transaction.
	In the context of determining whether lawyers have formed a joint venture for purposes of vicarious liability, the intent to share both the responsibility and profits from the representation clearly demonstrate the presence of a joint venture. In the context of determining whether lawyers have formed a joint venture for purposes of vicarious liability, a lawyer from another jurisdiction must associate with local counsel when temporarily appearing in litigation in a state. In most such situations the designated local lawyer plays a largely passive role. Courts should therefore be reluctant to visit the local lawyer with vicarious liability. But if the relationship is one of more nearly equal responsibility, authority, and profit sharing, it may fit the legal description of a joint venture, permitting an injured party to hold both foreign and local lawyer to joint and several liability.

EASTERN STEEL CONSTRUCTORS, INC. V. CITY OF SALEM , 2001 W. Va. LEXIS 3 (S. Ct. 2001)

City of Salem entered a contract with Kanakanui Associates (co-defendants) to improve existing sewer system including new treatment plant. Eastern Steel, a contractor for the construction portion of the contract, was delayed due to faulty information provided by Kanakanui. The claims against Kanakanui included professional negligence, implied warranty of plans and specifications, and as a third-party beneficiary to a contract. The circuit court rejected the claim for professional negligence based upon its conclusion that, because Eastern Steel Constructors' sought only economic damages, this cause of action could be maintained only as a cause of action in contract. No such contract exists.

The Court held that in West Virginia a cause of action sounding in negligence exists whereby a construction contractor may recover damages for purely economic losses from a design professional (e.g. architect or engineer) in the absence of a contract between the contractor and the design professional. Where a special and narrowly defined relationship can be established between the tortfeasor and a plaintiff who was deprived of an economic benefit, the tortfeasor can be held liable. In cases of that nature, the duty exists because of the special relationship. The special class of plaintiffs involved in those cases were particularly foreseeable to the tortfeasor, and the economic losses were proximately caused by the tortfeasor's negligence.

 

Decisions Relating to Employment Law

LOVE V. GEORGIA-PACIFIC CORP. 2001 W. Va. LEXIS 31 (S. Ct. 2001)

Employee filed suit against employer under West Virginia Wage Payment and Collection Act. She was moved from her office job in HR to a new position with no job description in which he was required to wear safety gear, hard-hat, boots, etc. The Court affirmed the ruling that no emotional distress occurred. The lower court found no retaliatory discharge because a reasonable person would work under such conditions.

Where a constructive discharge is claimed by an employee in a retaliatory discharge case, the employee must prove sufficient facts to establish the retaliatory discharge. In addition, the employee must prove that the intolerable conditions that caused the employee to quit were created by the employer and were related to those facts that gave rise to the retaliatory discharge.

BINE V. OWENS , 542 S.E.2d 842, (S. Ct. 2000).

Wrongful termination suit by employee accused of vandalizing coworker’s car. Employer did not use the termination procedure found in corporate handbook. The Court concludes that Employer was not bound by disciplinary procedures contained in its handbook when it discharged Mr. Bine and that the Bines' claim that he was improperly discharged because Employer did not follow the procedures in the handbook is without merit

Defamation and False Light claims were remanded for further discovery.

KANAGY V. FIESTA SALONS, INC., 541 S.E.2d 616, (S. Ct. 2000)

The Plaintiff is a licensed cosmetologist, who, when questioned by the WV Board of Cosmetology, reported that her supervisor from Ohio did occasionally do styling work on customers during her visits to West Virginia locations. The supervisor was not licensed to practice in West Virginia and was fined. At the supervisor’s direction, the Plaintiff also removed $20 from petty cash for pizza for the staff. Plaintiff was terminated for stealing $20 from petty cash.

	The rule that an employer has an absolute right to discharge an at will employee must be tempered by the principle that where the employer's motivation for the discharge is to contravene some substantial public policy principle, then the employer may be liable to the employee for damages occasioned by this discharge.
	West Virginia Code of State Regulations § 3-5-3 clearly provides a substantial public policy sufficient to support a claim for wrongful discharge where an employee is discharged in retaliation for providing truthful information, in compliance with the requirements of the regulation, to an investigator for the West Virginia Board of Barbers and Cosmetologists.

ROBERTSON V. MORRIS, (2001 W.Va. LEXIS29)

Ms. Morris is a homeowner who asked Mr. Adkins to remove a tree from her property. Although he could not, he suggested another party who could – Mr. Robertson. Mr. Adkins informed the homeowner that Mr. Robertson was properly licensed and insured; this was not true. Mr. Adkins instructed Mr. Robertson to cut down the tree. Mr. Robertson was injured while cutting down the tree and sought to recover for injuries suffered on Ms. Morris’ property. Judgment for Ms. Morris, the homeowner, because she exercised no control over the process.

The Court adds language to the definition of independent contractor as opposed to employee. A property owner who engages an independent contractor to perform a job may retain broad general power of supervision and control as to the results of the work so as to insure satisfactory performance of the contract -–including the right to inspect, to stop the work, to make suggestions of recommendations as to the details of the work, or to prescribe alterations of deviations in the work – without changing the relationship from that of owner and independent contractor, or changing the duties arising from that relationship.

STONE V. ST. JOSEPH'S HOSP. 538 S.E.2d 389, (S. Ct. 2000)

	The Plaintiff worked as an EMT and then as a paramedic on an ambulance crew. This is a highly skilled and physically demanding occupation. He strained his back while working but an e-ray found no problem. On a Workers’ Compensation form, a narcotic-type pain relief medicine was listed. The hospital administration assigned him to dispatcher position due to concern for further back injury and narcotics use. At least two doctors found no reason to limit his activities. As dispatcher, he worked fewer hours and at a lesser rate than other dispatchers. This move was not intended to be a permanent position.
	The West Virginia Human Rights Act requires that after commencement of an employee's employment duties, an employer shall not require an employee to submit to any medical examination, excepting tests for illegal drugs and voluntary examinations including histories which are part of an employee health program available to employees at that work site; and an employer shall not make inquiries of an employee as to whether such employee has a disability or as to the nature and severity of the disability -- unless such examination or inquiry is job-related and consistent with business necessity.
	When undertaken in a good-faith fashion that is consistent with the duty of reasonable accommodation, the use of a light duty program or assignment does not establish disability discrimination. Thus, the mere fact that an employer places an employee on light duty does not prove disability discrimination.

INGRAM V. CITY OF PRINCETON, 540 S.E.2d 569 (S. Ct. 2000)

	A police officer retired after ten years and requested payment for unused sick leave that accrued during his employment. The City never agreed that sick leave would be paid upon termination of employment.
	Terms of employment concerning the payment of unused fringe benefits to employees must be express and specific so that employees understand the amount of unused fringe benefit pay, if any, owed to them upon separation from employment. Accordingly, this Court will construe any ambiguity in the terms of employment in favor of employees. Meadows v. Wal-Mart Stores, Inc., 530 S.E.2d 676 (1999).

EXPEDITED TRANSP. SYS., INC. v. VIEWEG, 207 W. Va. 90, 529 S.E.2d 110 (S. Ct. 2000).

	Workers’ Compensation Division held that Expedited was a successor employer and liable for its predecessor’s delinquent Workers’ Compensation Premiums. Expedited leased 30% of another company’s trucks, hired 50% of office personnel and 25% of its truck drivers and began using its client base.
	The original determination that Expedited was a successor employer was made pursuant to W.Va. Code § 23-2-14(b)(5). A hearing was requested to examine this determination, however, the examiner determined liability under §23-2-14(f).
	The president of Expedited established on appeal that he was not an officer, had no corporate rights, obligations or ownership interest in the other trucking company. He also established that Expedited did not acquire substantially all of the assets. The Court reversed the Final Order of the Division.
	When the presumption permitted by W. Va. Code § 23-2-14(f) is used to determine that an employer is a successor employer for the purposes of W. Va. Code § 23-2-14(b), and that employer subsequently follows the procedure outlined in W. Va. Code § 23-2-14(f) by requesting a hearing to overcome the presumption, the Workers' Compensation Division must grant the employer's request and conduct such a hearing.

 

Tax Appeals

CB&T Operations Company et. Al. vs. Tax Commissioner, (WVa 2002)

After the bank set up a data processing company, it "leased" computer equipment to the new company. The court allowed the bank to "recharacterize" the lease as cost sharing to avoid use tax on the lease payments.

¨ CNG Transmission Corporation vs. Tax Commissioner, (WV 2002)

CNG gas transmission company successfully argued that transporting its own gas thru its transmission lines was "transmission" for the sales and use tax exemption.

Syncor International Corp. v. Palmer, State Tax Commissioner, 542 S.E.2d 479 (W.Va 2001).

The sale of a radio pharmaceutical to a medical service provider is exempt from the consumer sales tax under the provisions of WV Code §11-15-9(a)(11) where the radio pharmaceutical is purchased and dispensed pursuant to a physician’s prescription that was prepared for a particular, individual patient and administered in a medical facility.

Coordinating Council for Indep. Living v. Palmer (2001)

"Homemaker services" and "case management services" are not subject to the health care providers privilege tax. §11-13A-3. On appeal by the Commissioner, the Court affirmed the Kanawha County Circuit Court in holding that the statutory language was too ambiguous to determine whether the homemaker and case management services provided by the appellees were within the scope of the health care services contemplated by the statute. The Court also concurred that the Commissioner's attempt to enforce this tax, after failing to do so for nearly five years from the date of its inception, amounted to an impermissible rule in contravention of the mandates of the Administrative Procedures Act.

Homemaker services include light housekeeping, hygiene related activities, and food preparation by aides and other forms of non-medical or non-health related personal care. Case management services include the development of a plan of care for Medicaid eligible clients by registered nurses and case managers.

RGIS Inventory Specialists v. Palmer, 544 S.E.2d 79 (2001)

	Taxpayer provides inventory services for retail stores throughout US. RGIS employees go to the store, electronically take inventory, and prepare reports based on this information. The Court held that the service of observing and electronically recording information about a customer’s inventory by an inventory services company is the creation of data and is not exempt from sales tax under the "electronic data processing" exemption established by § 11-15-9(a)(22).
	An all or nothing approach was taken by RGIS, even though the Commissioner admits a portion of their service is strictly exempt "data processing".
	W.V. Code of Regulations § 110-15-76 regarding Electronic Data Processing Services and Related Software was used to determine that the mere use of a computer for processing electronic data does not exempt the service from tax. The statute contemplates "data entry" as entry of "previously documented" data, rather than the act of creating data by converting a mental impression into a digital bit by means of a keystroke.

JOHN HOUYOUX, d/b/a AEROLEASE v. Paige (Sept. 1999 term)

Pursuant to the provisions of West Virginia Code § 11-10-14(l)(1) (1999), a claim seeking a refund of sales taxes is subject to a three-year statute of limitations when the vendor to whom the sales tax was paid filed the sales tax return relative to the purchases at issue. When, however, the vendor fails to file the requisite sales tax return, the applicable limitations period is two years from the date the purchaser paid the sales taxes.

Mayhew v. Mayhew, 205 W.Va. 490, 519 S.E.2d 188 (1999)

	Passive appreciation of separate property of either of the parties to a marriage, or that increase which is due to inflation or to a change in market value resulting from conditions outside the control of the parties, is separate property which is not subject to equitable distribution.
	Active appreciation of separate property of either of the parties to a marriage, or that increase which results from (A) an expenditure of funds which are marital property, including an expenditure of such funds which reduces indebtedness against separate property, extinguishes liens, or otherwise increase the net value of separate property, or (BO work performed by either or both of the parties during the marriage is marital property which is subject to equitable distribution.
	Five-step test for active or passive appreciation analysis:

	Whether the property, in general, is either separate or marital property;
	Placing a value on the nonmarital property at the commencement of the action;
	The value of the nonmarital property, before it became subject to the active and passive appreciation analysis;
	The circuit court calculation of the property’s value at the commencement of the action, in relation to its value on the date gifted;
	A determination as to what extent the increase in the value of the nonmarital property is active appreciation or passive appreciation.

The resulting amount due to active appreciation is marital property and subject to equitable distribution.

City of Clarksburg v. Grandeotto, Inc., et al, 204 W.Va. 404, 513 S.E.2d 177 (1998).

An ordinance which imposes a municipal service fee pursuant to W. Va. Code, 8-13-13 upon the owners of buildings at an annual rate plus a percentage based upon the square footage of space contained in each structure on the lot for the sole purpose of defraying the cost of fire and flood protection services is a user fee rather than a tax and therefore, is not in violation of the Tax Limitation Amendment found in W. Va. Const. Art. X, § 1.

Marjorie E. Daniel, et al, v United National Bank, 202 W. Va. 648, 505 S.E. 2d 711 (1998).

Marjorie Daniel and her two stepdaughters initiated action to compel the bank to distribute certain funds held in a trust created by Marjorie's deceased husband. In granting the summary judgment, the circuit court concluded that, by virtue of a particular letter written to United National Bank on behalf of Marjorie and her stepdaughters, Marjorie disclaimed her interest in the trust under the Uniform Disclaimer of Property Interests Act, W. Va. Code § 42-6-1 et seq. United argues, in part, that the letter was not an effective disclaimer as it did not comply with the requirements of the Uniform Disclaimer of Property Interests Act. The Supreme Court agreed and granted summary judgment in favor of United National Bank.

A proper disclaimer shall describe the property or interest disclaimed, declare the disclaimer and extent thereof, be signed by the disclaimant and be acknowledged in such a manner as would authorize a deed to be admitted to record.

Wellsburg Unity Apartments, Inc. v. Brooke County Commission, 202 W. Va. 283, 503 S.E.2d 851 (1998).

	When a corporation is granted a tax exempt status under Section 501(c)(3) of the Internal Revenue Code of 1986, that corporation is deemed to be a charitable organization under 110 C.S.R. § 3-19.1
	Real property that is used exclusively for charitable purposes and is not held or leased for profit is exempt from ad valorem real property taxation. W. Va. Code § 11-3-9.
	In order for real property to be exempt from ad valorem property taxation, a two-prong test must be met: (1) the corporation or other entity must be deemed to be a charitable organization under 26 U.S.C. § 501(c)(3) or 501(c)(4) as is provided in 110 C.S.R. § 3-19.1; and (2) the property must be used exclusively for charitable purposes and must not be held or leased out for profit as is provided in W. Va. Code § 11-3-9.

Kings Daughters Housing, Inc. v. James Paige, Commissioner, 203 W.Va. 74, 506 S.E.2d 329 (1998).

"Rent subsidies," paid to Kings Daughters Housing, Inc., by the United States Department of Housing and Urban Development to make decent housing available to certain elderly citizens, constitute "grants" within the meaning of the West Virginia sales tax law pursuant to W. Va. Code § 11-15-9. As a result, Kings Daughters Housing, Inc., was entitled to exemption from the West Virginia sales tax.

A charitable organization must receive more than 50% of its support from gifts, grants, charitable contributions or membership fees. The common definition of "subsidy" is: "A grant of money made by government in aid of the promoters of any enterprise, work, or improvement in which the government desires to participate, or which is considered a proper subject for government aid, because such purpose is likely to be of benefit to the public."

The Body Shop, Inc. v. State Tax Commissioner (Kanawha County Circuit Court, October 13, 1999).

Sale of substantially all of the business assets of an auto body shop to The Body Shop, Inc. created a "successor" in business for the purposes of title 110 of Code of State Regulations. Asset purchase agreement was interpreted to say the Taxpayer was buying the whole business with the exception of tools or other materials that were removed.

Melrose Enterprises, Ltd. v. State Tax Commissioner (Mercer County Circuit Court, May 15, 2000).

	Soft drinks offered to customers while waiting for an oil change are purchased for resale and the "one price" policy of the business includes the price of the soft drink.
	Soap, detergents, and cleaners used during the washing of cars are not purchased for resale, but are completely consumed during the service to the car. Car wax goes with the customer after completion of services and is therefore purchased for resale.

Dodson v. State Tax Commissioner (Monongalia County Circuit Court, August 31, 2000).

	Plaintiff retired in 1981 at age 50 and has federal annuity for his 20 years of service at Kennedy Youth Center as corrections officer, plumbing supervisor to inmate crews and firefighter. He and his wife were unable to claim the exemption allowed by §11-21-12(c)(6) because Dodson’s position was as a federal officer.
	The Court found that §11-21-12(c)(6) is unconstitutional by virtue of its application to this taxpayer and allowed the exemption of federal retirement annuity payments from taxation.
	The Court found that the intent behind the scheme was not to discriminate against employees or former employees of the federal government but to benefit the small group of taxpayers who were unable to collect SSI benefits