Department of

Non-resident contractors are required to register with the State of West Virginia and post bond to meet their use tax liabilities. This Publication is separated into four parts. The first part defines who is considered to be a non-resident contractor. The second explains the use tax liabilities of a non-resident contractor. The third explains the registration and bond filing requirements of a non-resident contractor, and the fourth and last part consists of the forms needed to meet these requirements.

PART 1: WHO IS A NON-RESIDENT CONTRACTOR?

Contracting includes only those alterations, repairs, improvements, and decorations to real property and structures that constitute capital improvements. For further information on what constitutes a capital improvement, consult Publication TSD-310, "The Capital Improvement Rule".

EXAMPLE 2: Company A is incorporated in Ohio and has a place of business in St. Clairsville, Ohio. It does not have a place of business in West Virginia, nor does it engage in business in West Virginia. It has recently been awarded a contract to build a manufacturing facility in Parkersburg, West Virginia. Company A is considered to be a non-resident contractor and must register and post bond with the West Virginia Department of Tax and Revenue.

1. It does not have a place of business in West Virginia.

2. It does not engage in business in West Virginia.

3. It is not currently registered with West Virginia due to a lack of a business location or previous or on-going business activity in West Virginia.

PART 2: WHAT ARE THE USE TAX LIABILITIES OF A NON-RESIDENT CONTRACTOR?

CALCULATION OF USE TAX

6% X ($15,000 X .5 year)

6% X ($15,000 X .05)

6% X ($750)

$45

To compute the use tax due in the case of leased property, the amount of lease payments attributable to the duration of time the leased property was used in West Virginia is multiplied by the use tax rate (6%).

EXAMPLE: Contractor Y from Ohio leases a bulldozer at the cost of $850/month. The bulldozer is brought into West Virginia for use on a contracting job in Wheeling. The job is estimated to last five months. The use tax liability of Contractor Y on the bulldozer is calculated as follows:

AMOUNT OF LEASE PAYMENTS x 6% FOR PERIOD PROPERTY IS IN WEST VIRGINIA

($850 x 5 MONTHS) x 6%

$4,250 x 6%

Property placed into "substantial use in another state" before being brought into West Virginia for use in contracting activity. "Substantial use in another state" means the property was used by the taxpayer outside West Virginia for a period of time equal to or greater than seventy-five percent (75%) of the useful economic life of the property determined at the time the property was first purchased or leased by the taxpayer. A credit is allowed against the use tax due on property brought into West Virginia for use in contracting activities for any sales tax paid on the property in another state.

PART 3: WHAT ARE THE REGISTRATION AND BONDING REQUIREMENTS

OF A NON-RESIDENT CONTRACTOR?

Every non-resident or resident contractor who engages in contracting activity in West Virginia is required to obtain a business registration certificate from the Tax Commissioner before starting work in this State. The contractor is to have a copy of the certificate available at every construction site in this State until the work at that location is completed. The business registration certificate is valid for a one-year period which begins July 1 and ends June 30 of the next calendar year. The certificate must be renewed annually by paying a $15.00 fee and completing a WV/BRT-801A form which is available upon request. Severe civil and criminal penalties may be imposed for failure to comply with these registration requirements.

CONSUMERS SALES AND USE TAX REGISTRATION AND BOND REQUIREMENTS

Every non-resident contractor prior to performance of any contracting activity in West Virginia must not only register with the tax commissioner as previously described, but effective July 1, 1989, non-resident contractors must also post either a cash bond, a corporate surety bond, or an umbrella corporate surety bond and must file an itemized listing of equipment and materials brought into West Virginia for use in contracting activity.

The Tax Commissioner will deposit this money into the Contractors Use Tax Fund. Once the contract is completed and the actual amount of sales and use tax due on the contract is determined, and the contractor submits sufficient proof that the sales and use tax due with respect to the contract has been paid, the cash bond posted by the contractor will be refunded.

2. Corporate Surety Bond: A non-resident contractor may also post a corporate surety bond which guarantees payment of the sales and use tax on the contract in order to meet the registration requirements. The corporate surety bond must be with a corporate surety qualified to do business in West Virginia and must be approved by the Tax Commissioner as to form, sufficiency, value, and amount. The amount of the corporate surety bond required will depend on the gross value of the contract, the amount of the taxable component of the contract, and the taxpayer's past record of compliance and timeliness in making tax payments.

3. Umbrella Corporate Surety Bond: In situations where a non-resident contractor enters West Virginia on an intermittent basis, the contractor can elect to post an umbrella corporate surety bond. The umbrella corporate surety bond can be posted to guarantee the payment of sales and use tax with respect to either several contracts or all contracts executed within a certain period. In order to post an umbrella corporate surety bond, the taxpayer must have a prior tax payment history with the Department of Tax and Revenue. The umbrella corporation surety bond must be with a corporate surety qualified to do business in West Virginia and must be approved by the Tax Commissioner as to form, sufficiency, value and amount.

In addition to posting a bond to guarantee payment of any sales and use tax due, the non-resident contractor must file within thirty (30) days of registration an itemized statement of machinery, materials, supplies and equipment that he has or will use or have in hand in this State in order to perform the contract. The statement should list the type and amount of equipment and materials and the location from which the property was or will be brought, shipped or transported. Only equipment, materials and supplies on which the West Virginia sales and use tax has not been paid should be included in the list. Any sales or use tax due on the equipment, materials or supplies should be paid at the time the itemized statement is filed.

PART 4: FORMS FOR REGISTRATION, POSTING OF BONDS AND ITEMIZED LISTING

REGISTRATION FORMS: In order to register with the West Virginia Department of Tax and Revenue, Form WV/BRT-801 must be completed and submitted to the Department together with a $15 fee. Renewal forms normally will be sent automatically on an annual basis. Taxpayers are responsible for renewing their registration annually by July 1, regardless of whether they received a form from the Department.

BOND FORMS: Forms are attached to this publication for use in posting a cash bond, a corporate surety bond, or an umbrella corporate surety bond. These forms must be submitted to and approved by the Department of Tax and Revenue before commencing any contracting activity in West Virginia.

ITEMIZED LISTING: Forms are attached to this publication for use by non-resident contractors in filing an itemized listing of equipment, materials, and supplies which are being brought into West Virginia for use in contracting activity on which no West Virginia sales and use tax has been paid. This list must be filed by the non-resident contractor within thirty 30 days of registration.

If you have questions concerning this publication, please contact:

Department of Tax and Revenue

Taxpayer Services Division

P.O. Box 3784

Charleston, WV 25337-3784

Telephone: (304) 558-3333 or

Toll free within West Virginia: 1-800-WVA-TAXS (1-800-982-8297)

TDD Servicr for the hearing impaired: 1-800-2TAXTDD (1-800-282-9833)

To order forms or publications call:

(304) 344-2068 or

NONRESIDENT CONTRACTORS

CONSUMERS SALES AND SERVICE TAX

(1) That we,

(2)

(3) As principal, and

(4)

a firm and/or a corporation authorized to do business in the State of West Virginia, as Surety, are held and firmly bound unto the State of West Virginia in the just and full

(5) sum of dollars ($ ) to the payment whereof well and truly to make, we bind our-

selves, our heirs, executors administrators, successors, and assigns, jointly and severally, firmly by these presents.

(6) WHEREAS, the above bound Principal is a nonresident contractor within the meaning of Chapter 11, Article 15, of the Official Code of West Virginia of 1931, as amended, and whereas the Tax Commissioner of the State of West Virginia has required the said Principal to deposit a bond, in accordance with the provisions of Chapter 11, Article 15 Section 8b of the said Code of West Virginia;

NOW THEREFORE, if the said Principal shall in all respects fully comply with the provisions of Chapter 11, Articles 15 and 15A of the said Code of West Virginia and the rules and regulations adopted and promulgated thereunder, and shall account for and pay over all Consumers Sales and Use Taxes and penalties for which the said Principal shall be liable, and shall protect and save harmless the State of West Virginia from any loss arising from the failure of the Principal to pay such Consumers Sales and Use Taxes and penalties, for any cause whatsoever, then this obligation to be void; otherwise, to remain in full force and effect.

The Principal hereby waives the secrecy provisions of West Virginia Code 11-10-5(d) and authorizes the Tax Department to release to the surety company information necessary to file a proof of claim concerning any tax liability covered by this bond and accruing during the effective dates of this bond.

(7) This bond shall be effective from the day of , 19 .

IN WITNESS WHEREOF the said principal has hereunder set his or its hand affixed his or its seal, and the said surety has caused its corporate name to be signed hereto and its corporate seal to be hereunto affixed by its duly authorized officer (8) or agent and executed this instrument this day of , 19 .

(11) Principal (9) (Seal)

Corporate Seal (Principal)

(10) By: (Seal)

Title (Must be President or Vice-President)

(14) Surety (12)

Corporate Seal (Surety)

(13) By:

(15) STATE OF

(16) County of , to-wit:

(17) I, a Notary Public in and for the

(18) county and state aforesaid, do hereby certify that

(19) whose name is signed to the foregoing writing, bearing date the day of

(20) , 19 , has this day acknowledged the same before me in my said county.

(21) Given under my hand this the day of , 19 .

(22) Notary Seal (23)

Notary Public

(25) STATE OF

(26) County of , to-wit:

(27) I, a Notary Public in and for the

(28) county and state aforesaid, do hereby certify that

(29) who, as , signed the foregoing writing for

(30) , a corporation, bearing date the day of

(31) , 19 , has this day, in my said county, before, me, acknowledged the said writing to be the act and deed of the said corporation.

(32) Given under my hand this day of , 19 .

(33) Notary Seal (34)

Notary Public

(36) STATE OF

(37) County of , to-wit:

(38) I, a Notary Public in and for the

(39) county and state aforesaid, do hereby certify that

(40) who, as , signed the foregoing writing for

(41) , a corporation, bearing date the day of

(42) , 19 , has this day, in my said county, before me, acknowledged the said writing to be the act and deed of the said corporation.

(43) Given under my hand this day of , 19 .

(44) Notary Seal (45)

Notary Public

IF PRINCIPAL IS AN INDIVIDUAL OR PARTNERSHIP:

Complete the bond, lines (1) through (11);

Have Notary complete the applicable section of acknowledgement titled, Acknowledgement by Principal if Individual or Partnership, on the back of bond.

IF PRINCIPAL IS A CORPORATION:

Complete the bond, line (1) through (11);

Have Notary complete the applicable section of acknowledgement titled, Acknowledgement by Principal if Individual or Partnership, on the back of bond;

Affix corporate seal as requested on face of bond.

SURETY:

Complete applicable portion of bond;

Have Notary complete applicable section of acknowledgement tilted, Acknowledgement by Surety, on the back of the bond;

Attach Power of Attorney to bond if surety signatory is an attorney in fact;

Affix raised Surety Seal to bond and to Power of Attorney.

LINE NUMBER INSTRUCTIONS;

FACE OF BOND CANNOT CONTAIN WHITE-OUTS OR ALTERATIONS. REVERSE OF BOND MAY CONTAIN WHITE-OUTS OR ALTERATIONS PROVIDING CHANGES ARE INITIALED BY NOTARY.

(1-2) Enter name and address of Principal (Specify individual, partnership, or corporation) to be covered by bond.

(3-4) Enter name and address of Surety Company issuing bond.

(5) Enter amount of bond.

(6) Enter type of business (e.g. Distributor, Importer, User, etc.)

(7) Enter effective date of the bond. (West Virginia Code requires continuation certificate annually on anniversary date).

(8) Enter execution date of bond (also known as the bearing date of the bond).

(9) Enter name of the Principal (individual, partnership, or corporation covered by bond).

(10) If principle is an individual, affix signature. If principal is a corporation, President or Vice-President must sign bond and underline the appropriate title. If bond is to be signed by one other than the President or Vice-President, affix copy of corporate resolutions showing authorization of individual to bind corporation.

(11) If Principal is a corporation, be sure to affix corporate seal, if not available draw facsimile.

(12) Enter name of Surety.

(13) Affix signature and title of person having Power of Attorney to bind Surety.

(14) Affix corporate seal of Surety.

ACKNOWLEDGEMENT PREPARATION INSTRUCTIONS:

IF PRINCIPAL IS AN INDIVIDUAL OR PARTNERSHIP, HAVE NOTARY COMPLETE LINES (16) through (25).

IF PRINCIPAL IS A CORPORATION HAVE NOTARY COMPETE LINES (26) through (36).

SURETY MUST HAVE NOTARY COMPLETE LINES (37) through (47).

ACKNOWLEDGEMENT BY PRINCIPAL IF INDIVIDUAL OR PARTNERSHIP

(15) Enter name of State.

(16) Enter name of County.

(17) Enter name of Notary Public witnessing transactions.

(18) Enter name of principal covered by bond if individual or partnership.

(19-20) Enter bearing date of bond (also known as execution date). Must be same date entered on line 8 of the bond.

(21) Notary enters date bond was witnessed. May be same as bearing date or any date thereafter.

(22) Affix Notary Seal. If notary is located outside the State of West Virginia, seal must be affixed.

(23) Notary affixes his signature here.

(25) Enter name of State.

(26) Enter name of County.

(27) Enter name of Notary Public witnessing transactions.

(28) Enter name of Corporate Officer signing bond. (Should be President or Vice-President).

(29) Enter designate Title of Corporate officer signing bond.

(30) Enter name of Company or Corporation.

(30-31) Enter bearing date of bond (also known as execution date). Must be same date entered on line 8 of the bond.

(32) Notary enters date bond was witnessed. May be same as bearing date or any date thereafter.

(33) Affix Notary Seal. If notary is located outside the State of West Virginia, seal must be affixed.

(34) Notary affixes his signature here.

(35) Notary enters commission expiration date.

ACKNOWLEDGEMENT BY SURETY

(36) Enter name of State.

(37) Enter name of County.

(38) Enter name of Notary Public witnessing transactions.

(39) Enter name of person having power of attorney to bind Surety Company.

(40) Designate title of person binding Surety Company.

(41) Enter name of Insurance Company (Surety)

(41-42) Enter bearing date of bond (also known as execution date). Must be same date entered on line 8 of the bond.

(43) Notary enters date bond was witnessed. May be same as bearing date or any date thereafter.

(44) Affix Notary Seal. If Notary is located outside the State of West Virginia, seal must be affixed.

(45) Notary affixes his signature here.

(46) Notary enters commission expiration date.

POWERS OF ATTORNEY INSTRUCTIONS

Power of Attorney for Surety must be attached and it must show that it was in full force and effect on bearing date (execution) indicated on the face of the bond, also the raised corporate seal must be affixed to the Power of Attorney.

Name of attorney in fact must be listed (if attorney is a non-resident, bond must be countersigned by West Virginia resident agent).

Power of Attorney may not exceed imposed limitations.

Certificate date must be the execution date (bearing date) of the bond.

Signature of authorizing official must be affixed. (Signature may be facsimile).

NONRESIDENT CONTRACTOR

CONSUMERS SALES AND SERVICE TAX AND USE TAX

FEIN:

CONTRACT PARTICIPANTS:

CONTRACT DESCRIPTION:

This bond shall be effective from the day of , 19 .

In witness whereof the above named non-resident contractor hereby executes this instrument this

day of , 19 .

(Authorized Officer or Agent Non-Resident Contractor)

Acknowledged before me this day of , 19 . My commission expires the day of , 19 .

Notary Seal

Notary Signature

TANGIBLE PERSONAL PROPERTY LISTING

Credit For Tax Paid In Another State