H. B. 2174
(By Delegate Kiss)
[Introduced February 18, 1993; referred to the
Committee on Finance.]
A BILL to amend and reenact section eight-a, article fifteen,
chapter eleven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to the
consumers sales tax; exempting certain tangible personal
property of certain contractors under contract with county
boards of education or the state school building authority.
Be it enacted by the Legislature of West Virginia:
That section eight-a, article fifteen, chapter eleven of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 15. CONSUMERS SALES TAX.
§11-15-8a. Contractors.
(a) The provisions of this article shall not apply to
contracting services. However, except for sales of tangible
personal property to persons engaging in the activity of
contracting, pursuant to a written contract with a county board
of education or the state school building authority, purchasesby a contractor of tangible personal property or taxable services
for use or consumption in the providing of a contracting service
shall be taxable beginning the first day of March, one thousand
nine hundred eighty-nine, except as otherwise provided in this
article.
(b) Transition rules. -- The exemption from payment of tax
on purchases of tangible personal property or taxable services
directly used or consumed in the activity of contracting, as
defined in section two of this article, which expires as of the
first day of March, one thousand nine hundred eighty-nine, shall
nevertheless remain in effect with respect to:
(1) Tangible personal property or taxable services purchased
by a contractor on or after said first day of March in
fulfillment of a written contract for contracting, as defined in
section two of this article, that was executed and legally
binding on the parties thereto on or before the fifteenth day of
February, one thousand nine hundred eighty-nine; or in
fulfillment of a written contract entered into after the said
fifteenth day of February pursuant to a written bid for
contracting that was made on or before the said fifteenth day of
February that was binding on the contractor, but only to the
extent that the bid is subsequently incorporated into a written
contract; or
(2) Tangible personal property or taxable services purchased
by a contractor on or after the said first day of March pursuant
to a written contract executed on or before the fifteenth day ofFebruary, one thousand nine hundred eighty-nine, to purchase in
specified quantities identified tangible personal property or
specified taxable services; or
(3) Tangible personal property or taxable services purchased
by a contractor for consumption or use in fulfillment of a
written contract entered into before the first day of September,
one thousand nine hundred eighty-nine, when such contract is for
the construction of a new improvement to real property the
construction or operation of which was approved by a federal or
state regulatory body prior to the first day of February, one
thousand nine hundred eighty-nine, or pursuant to a federal grant
awarded prior to such first day of February.
(c) Renewals and extensions. -- A renewal of any contract
shall constitute a new contract for purposes of this section, and
the date of entry into a contract renewal by the parties, the
date or dates of tender of consideration and the time of
performance of any contractual obligations under a renewed
contract shall be treated as the dates for determining
application of this section to the renewed contract. Extensions
of time granted or agreed upon by the parties to a contract for
performance of the contract or for tender of consideration under
the contract shall not be treated as contract renewals.
Contracts to which such extensions apply shall be treated under
these transition rules as if the original contractual provisions
for performance and tender of consideration remain in effect.
(d) Definitions. -- For purposes of this section:
(1) The term "contract" or "contracts" means written
agreements reciting or setting forth a fixed price consideration
or a consideration based upon cost plus a stated percentage or a
stated monetary increment. This term shall not mean or include
ongoing sales contracts, contracts whereby any element of the
consideration or the property or services sold or to be rendered
in performance of the contract are undefined, or determined, as
to either nature or quantity, subsequent to the making of the
contract, or any open-ended contract.
(2) The term "contract renewal" or "renewal" means a
covenant or agreement entered into or assumed by parties which
have a current contractual relation or which have had a past
contractual relation, whereby the parties agree to incur
obligations beyond those which they were, or would have been,
required, at the minimum, to carry out under their current or
past contractual relation.
NOTE: The purpose of this bill is to exempt tangible
personal property of contractors contracting with county boards
of education and the state school building authority from the
consumer sales tax.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.