WEST virginia Legislature

2019 regular session

Introduced

Senate Bill 58

By Senator Plymale

[Introduced January 9, 2019; Referred
to the Committee on Economic Development; and then to the Committee on Finance]

A BILL to amend and reenact §11-15B-15 of the Code of West Virginia, 1931, as amended, relating to reinstating the exemption for certain sellers of cut flowers and flower arrangements from the general sourcing rules for purposes of the streamlined sales and use taxes; detailing when the exception is applicable; and repealing language that previously ended the exception.

Be it enacted by the Legislature of West Virginia:

ARTICLE 15B. SALES AND USE TAX ADMINISTRATION.

§11-15B-15. General transaction sourcing rules.

(a) General rule. -- For purposes of §11-15B-15-1 et seq., and §11-15A-1 et seq. of this code, the retail sale, excluding lease or rental, of a product shall be sourced as follows:

(1) When the product is received by the purchaser at a business location of the seller, the sale is sourced to that business location.

(2) When the product is not received by the purchaser at a business location of the seller, the sale is sourced to the location where receipt by the purchaser or the purchaser's designated donee occurs, including the location indicated by instructions for delivery to the purchaser or donee, known to the seller.

(3) When §11-15B-15(a)(1), and §11-15B-15(a)(2) of this code do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith.

(4) When §11-15B-15(a)(1), §11-15B-15(a)(2), and §11-15B-15(a)(3) of this code do not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser's payment instrument, if no other address is available, provided use of this address does not constitute bad faith.

(5) When §11-15B-15(a)(1), §11-15B-15(a)(2), §11-15B-15(a)(3), and §11-15B-15(a)(4) of this code do not apply, including the circumstance in which the seller is without sufficient information to apply the previous rules, then the location will be determined by the address from which tangible personal property or computer software was shipped, from which the digital goods delivered electronically was first available for transmission by the seller or from which the service was provided: Provided, That any location that merely provided the digital transfer of the product sold is disregarded for these purposes.

(b) Lease or rental. -– The lease or rental of tangible personal property or custom software, other than property identified in §11-15B-15(c) or §11-15B-15(d) of this code, shall be sourced as follows:

(1) For a lease or rental that requires recurring periodic payments, the first periodic payment is sourced the same as a retail sale in accordance with the provisions of §11-15B-15(a) of this code. Periodic payments made subsequent to the first payment are sourced to the primary property location for each period covered by the payment. The primary property location is as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. The property location may not be altered by intermittent use at different locations, such as use of business property that accompanies employees on business trips and service calls.

(2) For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with the provisions of §11-15B-15(a) of this code.

(3) §11-15B-15(b) of this code does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis or on the acquisition of property for lease.

(c) Vehicles. -- The lease or rental of motor vehicles, trailers, semitrailers or aircraft that do not qualify as transportation equipment, as defined in §11-15B-15(d) of this code, shall be sourced as follows:

(1) For a lease or rental that requires recurring periodic payments, each periodic payment is sourced to the primary property location. The primary property location is indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. This location shall not be altered by intermittent use at different locations.

(2) For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with the provisions of §11-15B-15(a) of this code.

(3) §11-15B-15(c) of this code does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis or on the acquisition of property for lease.

(d) Sale or lease or rental of transportation equipment. -- The retail sale, including lease or rental, of transportation equipment is sourced the same as a retail sale in accordance with the provisions of §11-15B-15(a) of this code, notwithstanding the exclusion of lease or rental in §11-15B-15(a) of this code. “Transportation equipment” means any of the following:

(1) Locomotives and railcars that are utilized for the carriage of persons or property in interstate commerce.

(2) Trucks and truck-tractors with a gross vehicle weight rating of 10,000 pounds or greater, trailers, semitrailers or passenger buses that are:

(A) Registered through the international registration plan; and

(B) Operated under authority of a carrier authorized and certificated by the United States Department of Transportation or another federal authority to engage in the carriage of persons or property in interstate commerce.

(3) Aircraft that are operated by air carriers authorized and certificated by the United States Department of Transportation or another federal or foreign authority to engage in the carriage of persons or property in interstate or foreign commerce.

(4) Containers designed for use on and component parts attached or secured on the items set forth in §11-15B-15(d)(1), §11-15B-15(d)(2), and §11-15B-15(d)(3) of this code.

(e) Exceptions. -- §11-15B-15(a), and §11-15B-15(b) of this code do not apply to the following goods or services:

(1) Telecommunications services, ancillary services and Internet access services, as set out in §11-15B-20 of this code, shall be sourced in accordance with §11-15B-19 of this code; and

(2) Until January 1, 2010 A seller who is primarily engaged in the retail sale of cut flowers and flower arrangements taking the original order to sell tangible personal property shall source the sale to the place where order was taken. For purposes of this exception, “primarily” means more than 50 percent of the seller's total gross sales or receipts are derived from that activity. In determining if a seller is primarily a florist, the total sales price of cut flowers and floral arrangements includes separately stated delivery or service charges. After December 31, 2009, sales by florists shall be subject to the general sourcing rules stated in subsection (a) of this section

(f) Product defined. -- As used in §11-15B-15(a) of this code, “product” includes tangible personal property, computer software or digital goods or a service, or any combination thereof.

NOTE: The purpose of this bill is to restore the exception for florists from the general sourcing rules with respect to the collection of sales and use taxes.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.