Administrative Decisions 1994- Summary Page
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"CSST" for Consumer Sales and Service Tax.
 | 94-012 PERSONAL INCOME TAX--ITEMIZED DEDUCTIONS-- There are no itemized deductions for personal income tax purposes, W. Va. Code ' 11-21-15(e). |
| 94-056 BUSINESS FRANCHISE TAX- - SUFFICIENT CONTACT -- Petitioner's admission that some of its employees do come into West Virginia to check on customers; that products are delivered into West Virginia by company trucks; and that Petitioner retains title to leased equipment being used in the State constitute sufficient contact or nexus for imposition of the West Virginia Business Franchise Tax. |
| 94-104 USE TAX--MANUFACTURING-- Consistent with W. Va. Tax Dec. 94-304 U, persons who expose film, develop the film, make prints or diapositives and who make sales of those photography products to others are engaged in manufacturing for consumer sales and use tax purposes. |
| 94-131 CSST-- PROFESSIONAL SERVICES-- ENROLLED AGENTS-- Majority owner=s participation in the business as an enrolled agent was sufficient to allow the Petitioner to avail itself of the professional services exemption contained in CSR Section 110-15-8.111 but only for the services for which the enrolled agent=s certificate was required. However, no modification of the assessment is required since Petitioner could not quantify the actual charges which pertained to the enrolled agent=s services. ELECTRONIC DATA PROCESSING SERVICES- Pursuant to 110 C.S.R., 15 ' 76.1.1 Petitioner=s computerized billing service including that of data processing is taxable and not exempt regardless of whether a computer was used in the performance thereof since the nature of the services were previously determined to be non-professional. |
| 94-134 CSST AND PURCHASERS’ USE TAX-- DIRECT USE IN TRANSPORTATION-- The exemption from sales and use tax for purchases directly used in transportation activity is available only to a person engaged in such activity, not to a related person engaged in a motor vehicle repair business. See W. Va. Code § 11-15-9(g) [now, W. Va. Code § 11-15-9(b)(2)]. | ||
| 94-173 SOLID WASTE ASSESSMENT FEES – REFUND CLAIM BASED UPON FEES COLLECTED BY A LANDFILL OPERATOR ON ACCOUNT OF THE NOW REPEALED W. VA. CODE §§ 20-5F-5a (1988) and 20-5N-4 (1991) DENIED – The State Tax Commissioner will deny a refund claim filed by a landfill for the solid waste assessment fees paid by its customers and imposed upon waste originating outside the "waste shed" in which the landfill is located, because the landfill, being not a taxpayer-claimant, has no standing to file refund claim on behalf of the customers. | ||
| 94-186 CONSUMERS SALES AND SERVICE TAX--PRESCRIPTION DRUGS-- Drugs sold directly to nursing home residents for medical purposes, even when administered by nursing home staff, are sales of drugs to consumers exempt per se from consumers sales and service tax pursuant to W. Va. Code ' 11-15-9(n) and the pertinent regulations. Sales tax erroneously paid by a vendor must be refunded to the vendor when the customer did not owe or pay the tax because the transaction was exempt per se from consumers sales and service tax. | ||
| 94-228 CSST--Services rendered by an agent to its principal, to wit: maintaining an office, promoting equipment rentals, protecting principals' vehicles and equipment and the like, determined to be separate and distinct from the service of renting vehicles and equipment to the general public. The services of promoting equipment rentals, maintaining and repairing equipment, accounting for inventory, keeping the appropriate books and records, etc., are different in form and substance from the service rendered to customers, and, therefore, the service being rendered to and for U-Haul is not being resold to customers and is thus not exempt from sales tax. | ||
| 94-243U Pursuant to W. Va. Code §11-15A-2(a), vehicle and equipment repairs performed out-of-state are still subject to West Virginia use tax if the same were intended for use and were in fact used in the State of West Virginia by an in-state business. Taxpayer which sold and leased propane tanks nearly identical in number to the propane tanks which it purchased each year is considered to be making purchases for resale and is, therefore, exempt from use tax as set forth in W. Va. Code §11-15A-3(a)(2). | ||
| 94-246 SV Based upon the eight (8) factors set forth in 110 C.S.R. 13A, ?? 3.5.1 & 3.5.2 et seq., coal company that severed coal from coal tract was a contract miner and not a producer for the period between July 1, 1987 through April 30, 1991, because it was required to sell its entire output of coal to the entity holding the leasehold interest if the latter wished to purchase same, thereby restricting the company?s freedom to sell coal on the open market. Subsequent to April 1991, the same coal company severing the coal was a producer and was liable for the severance and reclamation taxes because it was free to sell to whomever it pleased and at whatever price that it could get. | ||
| 94-249 BUSINESS FRANCHISE TAX--A review of taxpayer's original 1992 federal Schedule L required a recomputation of average capital balance resulting in additional business franchise tax due. Taxpayer did, however, file an amended Schedule L to reflect the corrected retained earnings. Therefore, taxpayer did prove that the assessment was incorrect and contrary to law. SEVERANCE TAX--COAL BROKER--COMMISSIONS--Pursuant to 110 C.S.R. 13A, ' 2a, commissions are part of the gross value of coal and cannot be deducted or excluded in the computation of severance tax due. | ||
| 94-252 SEVERANCE TAX--"PRODUCER" v. "CONTRACT MINER" -- "PRODUCER" MUST HAVE "ECONOMIC INTEREST"-- The State Tax Commissioner will abate a severance tax assessment which involves the services of a "contract miner," not the activities of a natural resource "producer," in that the person assessed, specifically, the person physically producing the natural resource product, did not have an "economic interest" in the mineral in place or in the standing timber. 110 C.S.R. 13A, ?? 3.5.1, 2.4.1 (1992), 1 W. Va. St. Tax Rep. (CCH) paras. 45-548, 45-511. | ||
| 94-253 C CSST -- Business Franchise Tax -- Corporate Income Tax Business activities consisting of nonresident salesman traveling into West Virginia to call upon prospective customers and the presence of leased equipment in the state constitute sufficient contact or nexus to warrant imposition of the West Virginia Business Franchise Tax. Exemption from West Virginia Corporate Net Income Tax under W. Va. Code §§11-24-5(d) and 11-24-13b for those corporations electing to be taxed as S corporations | ||
| 94-258 PURCHASER?S USE TAX-- PURCHASES OF OPTICAL AND AUDITORY ITEMS BY PRESCRIPTION-- Pursuant to 110 C.S.R. 15 ' 2.29 and 110 C.S.R. 15 ' 62.3.3, no purchaser's use tax is due on the fair market value of optical and auditory items purchased and dispensed by a clinic to outside patients who come to the clinic with a prescription for those items from another person. In those circumstances the clinic is not using the optical and auditory items in rendering services, but is merely dispensing items pursuant to a prescription. COMPUTER CONSULTING SERVICES-- Pursuant to 110 C.S.R. 15, ' 8.1, the tax division is authorized by the Legislature to designate a particular service as a professional service. The burden of proving that the service should be designated as a professional service is on the taxpayer. A medical clinic which fails to produce testimony or any other evidence in support of its contention that professional services were rendered by a computer consultant to the Petitioner has failed to carry its burden of proof as required by the Legislature.PHYSICIAN RECRUITING SERVICES-- No reduction in use tax assessment where medical clinic failed to carry its burden of proof that recruitment firm used its physician training to determine the qualifications of individual(s) to be hired rather than just interviewing candidates who met all qualifications. | ||
| 94-268 PURCHASERS= USE TAX--TAXABLE PURCHASES OF COPIES OF HOSPITAL AND MEDICAL RECORDS OF CLIENTS FOR USE IN LAW PRACTICE-- The State Tax Commissioner will affirm the portion of a purchasers= use tax assessment involving allegedly exempt purchases for resale where the taxpayer, a law firm, purchases copies of the hospital and medical records of clients but fails to show that consumers sales and service tax was collected from and remitted by the clients when reimbursing the taxpayer for these costs; under these circumstances the purchases are taxable as purchases for use in the business of providing professional legal services, the provisions of which services are not subject to the consumers sales and service tax. | ||
| 94-278 BUSINESS FRANCHISE TAX AND CORPORATION NET INCOME TAX -- REPURCHASE AGREEMENTS AND INTEREST THEREON TAXABLE TO BANK'S CUSTOMER -- W. Va. Code ' 11-23-3(b)(2)(E)(i)(I), for business franchise tax purposes, and W. Va. Code ' 11-24-6(f)(1)(A), for West Virginia corporation net income tax purposes, do not exempt "repurchase agreements" involving federal government obligations or securities, or the interest income on those agreements earned by the taxpayer, a customer of a bank or other "seller-repurchaser." The bank or other "seller-repurchaser," and not the taxpayer-customer, for state tax purposes, owns the underlying federal government obligations or securities and receives the interest from the United States government. | ||
| 94-282 U Under W. Va. Code §11-15A-2(a) and 110 C.S.R. 15, § 3.3, the use tax is imposed upon the use in this state of tangible personal property or taxable services. The services of out-of-state recruiters employed to find medical personnel and others for an in-state hospital are taxable, because all of the benefits and enjoyment of those services either directly or indirectly occurred in the State of West Virginia. | ||
| 94-294 WITHHOLDING TAX -- SUFFICIENCY OF SERVICE OF HEARING NOTICE -- CERTIFIED MAILING TO LAST KNOWN ADDRESS OF TAXPAYER -- Pursuant to the analogous provisions of Rule 5(b) of the West Virginia Rules of Civil Procedure and of section 6212 of the Internal Revenue Code, A taxpayer, intentionally or unintentionally, may not prevent all subsequent state tax administrative proceedings with respect to the taxpayer by failing to keep the West Virginia Department of Tax and Revenue apprised at all times of the taxpayer's current mailing address. | ||
| 94-304 USE TAX--MANUFACTURING-- Persons who expose film, develop the film, make prints, negatives or diapositives and who make sales of those photography products to others are engaged in "manufacturing" for consumer sales and service tax and use tax purposes.
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| 94-310 PERSONAL INCOME TAX--REFUND--FEDERAL CIVIL SERVICE RETIREMENT BENEFITS-- West Virginia's personal income tax scheme totally excluding retirement income in the form of pensions and annuities paid from any West Virginia police, West Virginia firemen's retirement system or the West Virginia Department of Public Safety Death, Disability and Retirement Fund while only excluding $2,000 of retirement benefits paid to retired federal civil servants does not discriminate against federal civil service retirees in violation of 4 U.S.C. ' 111 for the years 1988 and after. Brown v. Mierke 191 W. Va. 120, 443 S.E.2d 462 (1994), cert. denied, 513 U.S. 877 (1994). Accordingly, the Petitioner's claim for a refund was denied. |
| 94-358 PURCHASERS? USE TAX-- PURCHASES OF ADVERTISING SPACE-- Purchases of advertising space in baby book sent by third parties to mothers of newborn babies constitute purchases of "preprinted advertising circulars" that are exempt from sales and use tax pursuant to W. Va. Code § 11-15-9(o)[now, Code § 11-15-9(a)(12)] and 110 C.S.R. 15, ? 9.2.14.
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| 94-378 |
| 94-395 CSST -- ADDITIONAL CREDIT FOR BAD DEBTS NOT PROVEN-- W. Va. Code § 11-10-9 requires a taxpayer to prove that an assessment is incorrect or contrary to law, in whole or in part, and should the taxpayer fail to do so the assessment shall be affirmed.
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| 94-423 Petitioner seeks a refund of penalties it paid for the late filing of its July and August, 1993 withholding tax returns. | ||
| 94-430 PURCHASERS? AND RETAILERS? USE TAX--LEASED AIRCRAFT--110 C.S.R. 15 ? 129.1 exempts from consumers sales and service tax and purchasers? and retailers? use tax only long term leases of motor vehicles not leases of aircraft. |
| 94-439 Pursuant to 110 C.S.R. 15, § 107.2.1.2, effective July 1, 1989, the nature of the activity and not the form of the contract is the controlling factor in determining what is and what is not contracting. Sales of tangible personal property with attachment or installation which involve the construction of a new building or the remodeling thereof are capital improvements and as such constitute contracting as defined in W. Va. Code §11-15-2(c)(1) and the applicable regulations, 110 C.S.R. 15, §§ 3.3 et seq., 111.3 and 111.6.9. |
| 94-468 CONSUMERS SALES AND SERVICE TAX - CORPORATE OFFICER LIABILITY – OFFICER’S BURDEN OF PROOF - ASSESSMENT ABATED WHEN OFFICER CARRIES BURDEN -- At the time in question (prior to the broader consumers sales and service tax regulations on point which became effective on May 1, 1992), an officer of a corporation was personally liable for the unpaid consumers sales and service tax liability of the corporation, unless the officer showed that he or she did not have the authority to make or to supervise directly the day-to-day financial decisions on behalf of the corporation. When the corporate officer carries that burden of proof, the State Tax Commissioner will abate an officer liability consumers sales and service tax assessment. |
| 94-472
SV 110 C.S.R. 13A, § 2.4.1, which states that the one having an economic interest for federal tax purposes is the one who has acquired same by investment, applies where the Petitioner purchases timber either standing or on the stump and then possesses the title to sell same to recoup its investment. |
| 94-476 WITHHOLDING TAX MONEY PENALTY--LIABILITY OF CORPORATE OFFICER-- The State Tax Commissioner abate a withholding tax money penalty assessment where the officer shows that he possessed no check signing authority on behalf of the corporation and did not have any authority to make or supervise the day-to-day financial decisions on behalf of the corporation. |
| 94-482 USE TAX--PURCHASES FOR DIRECT USE IN REMANUFACTURE OF INDUSTRIAL MOTORS-- Purchases of parts and supplies for direct use in the remanufacture of industrial motors are exempt from use tax as directly used in manufacturing, W. Va. Code '' 11-15-2(l), 11-15-9(g) and 11-15A-3(a)(2), where the activities change the form, composition, or character, by changing the voltage, amperage and the horsepower of the motors. |
| 94-511
U Activities of installing greenhouses, monorail systems and similar items constitute capital improvements (contracting) under 110 C.S.R. 15, 107.3.3.1 and 9.3.8.2 because the intention was that said items would remain permanent or relatively permanent, the same added utility to the real property, and did not require recurrent servicing. |
| 94-515 CONSUMERS SALES AND SERVICE TAX AND PURCHASERS USE TAX- BURDEN OF PROOF NOT MET – Petitioner’s reliance upon bank account information to quantify its sales and use tax liability in the absence of adequate books and records proving same is not sufficient under W. Va. Code § 11-10-9 to show that the assessment is incorrect and contrary to law, in whole or in part. |
| 94-523 Pursuant to 110 C.S.R. 15, § 3.4.2, sales and use taxes are not to be imposed upon finance charges or late payment fees. |
| 94-531 CSST-- TWO YEAR REFUND CLAIM LIMITATION PERIOD APPLICABLE TO PURCHASER-- Pursuant to the provisions of W. Va. Code ' 11-10-14(l)(1), a purchaser must file a claim for refund of consumers sales and service tax within two years after its payment of the tax. |
| 94-543 CONSUMERS SALES AND SERVICE TAX--NEGLIGENCE PENALTY-- Additions to tax imposed under W. Va. Code ' 11-10-18(c) because of negligence or the intentional disregard of rules and regulations, without intent to defraud, will be abated when the evidence clearly shows that the taxpayer acted reasonably and prudently under the circumstances. |
| 94-566 PURCHASERS? AND RETAILERS? USE TAX--TRANSPORTATION OF GOODS -- Based upon 110 C.S.R. 15, ? 123.41 there is no direct use exemption applicable for the use tax where the hauler is hauling its own goods for its own customers. |
| 94-591 USE TAX--INTEGRATED CONTRACTOR/MANUFACTURER-- Pursuant to W. Va. Code ' 11-15A-2a and 110 C.S.R. 15, ' 112, a person who manufactures tangible personal property and uses or consumes the property in the performance of contracting activities in this state, is required to pay use tax on the gross value of the manufactured product. |
| 94-593 Pursuant to West Virginia Code §11-15A-10a, state sales tax lawfully paid to another state is to be credited against sales or use tax imposed by the State of West Virginia regarding the same items. |
| 94-638 PERSONAL INCOME TAX--CREDITED PAYMENTS-- Misleading correspondence sent by Internal Auditing Division regarding payments made by taxpayer held not to be controlling where payment records indicated that all payments were properly credited for the years 1992 through 1994. |
| 94-641 Under W. Va. Code §11-10-9, a taxpayer has the burden of proving its assertion that a state tax assessment is incorrect and contrary to law, in whole or in part. |