SB 164 Text

Introduced Version Senate Bill 164 History

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sb164 intr Senate Bill No. 164
(By Senators McCabe, Barnes and Unger)
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[Introduced February 11, 2005; referred to the Committee
on Finance.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §11-15-9i, relating to consumers sales and service tax; and creating exemptions for e-commerce vendors, computer hardware and software developers, internet service companies, electronic data processors, educational software, internet advertising and other e-commerce and high-technology companies.

Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §11-15-9i, to read as follows:
ARTICLE 15. CONSUMERS SALES AND SERVICE TAX.

§11-15-9i. Exemptions for e-commerce vendors, computer hardware and software developers, internet service companies, electronic data processors, educational software, internet advertising and other e-commerce and high technology companies.

(a) In order to modernize the exemptions from tax contained in this article as a result of technological advances in computers and the expanded role of computers, the internet and global instant communications in business, and to encourage e-commerce vendors, computer software developers, computer hardware designers, systems engineering firms, internet service companies, electronic data processing companies and other high technology companies to locate and expand their businesses in West Virginia the following sales of tangible personal property, custom designed software and services are exempt:
(1) Sales of computer hardware design services, computer software design, development, customization and upgrade services, and website and network design services;
(2) Sales of network, website and computer systems management, maintenance, engineering, administration and security services: Provided, That such purchases are directly used or consumed by persons engaged in e-commerce and high technology business;
(3) Sales of computer hardware or software (including custom designed software)to be incorporated by a manufacturer in a new high technology product: Provided, That for purposes of this subsection the payment of licensing fees for the right to incorporate hardware or software developed by persons other than the manufacturer in a manufactured product or payments to a developer for the design of such hardware or software are exempt from the tax imposed by this article;
(4) Sales of computer hardware and software directly used by e-commerce vendors located in West Virginia;
(5) Sales of computer hardware to persons engaged in providing electronic data processing services;
(6) Sales of educational software required to be used in any of the schools of this state or in any institution in this state which qualifies as a nonprofit or educational institution subject to the West Virginia Department of Education and the Arts, the Board of Trustees of the University System of West Virginia or the Board of Directors for Colleges located in this state; and
(7) Sales of internet advertising of goods and services.
(b) E-commerce and high technology businesses which enter into contracts with this state, its institutions and subdivisions, governmental units, institutions or subdivisions of other states, or with the United States, including agencies of federal, state or local governments are exempt from the tax imposed by this article on purchases of computer hardware, custom designed software, and services provided by subcontractors for use in fulfilling a government contract.
(c) E-commerce and high technology business. -- As used in this article, the term e-commerce and high technology business includes the activities of selling goods and services though the internet, computer hardware design and development; computer software design, development, customization and upgrade; computer systems, website and network design and development; design and development of products which incorporate computer hardware and software; electronic data processing; and network, website and computer systems management, maintenance, engineering, administration and security services.

NOTE: The purpose of this bill is to create sales tax exemptions to encourage high technology companies including: e-commerce vendors; computer software developers; computer hardware designers; systems engineering firms; internet service companies; and electronic data processing companies to locate and expand their businesses in West Virginia and to provide sales exemptions for educational software and internet advertising.

This section is new; therefore, strike-throughs and underscoring have been omitted.