Senate Bill No. 48
(By Senator Wooton)
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[Introduced January 18, 1994; referred to the Committee
on Finance.]
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A BILL to amend and reenact sections two and nine, article
fifteen, chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
exempting from the consumers sales tax deposits charged for
returnable beverage containers including deposits charged
for returnable soft drink bottles; and to exclude deposits
on returnable beverage containers from the definitions of
the terms sale, sales and selling as those terms are defined
in provisions relating to the consumers sales tax.
Be it enacted by the Legislature of West Virginia:
That sections two and nine, 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.
§11-15-2. Definitions.
For the purpose of this article:
(a) "Persons" means any individual, partnership,association, corporation, state or its political subdivisions or
agency of either, guardian, trustee, committee, executor or
administrator.
(b) "Tax commissioner" means the state tax commissioner.
(c) "Gross proceeds" means the amount received in money,
credits, property or other consideration from sales and services
within this state, without deduction on account of the cost of
property sold, amounts paid for interest or discounts or other
expenses whatsoever. Losses shall not be deducted, but any
credit or refund made for goods returned may be deducted.
(d) "Sale", "sales" or "selling" includes any transfer of
the possession or ownership of tangible personal property for a
consideration, including a lease or rental, when the transfer or
delivery is made in the ordinary course of the transferor's
business and is made to the transferee or his agent for
consumption or use or any other purpose. The terms "sale",
"sales" and "selling" do not include any deposit charged on
returnable beverage containers of tangible personal property
including returnable soft drink bottles.
(e) "Vendor" means any person engaged in this state in
furnishing services taxed by this article or making sales of
tangible personal property.
(f) "Ultimate consumer" or "consumer" means a person who
uses or consumes services or personal property.
(g) "Business" includes all activities engaged in or caused
to be engaged in with the object of gain or economic benefit,direct or indirect, and all activities of the state and its
political subdivisions which involve sales of tangible personal
property or the rendering of services when those service
activities compete with or may compete with the activities of
other persons.
(h) "Tax" includes all taxes, interest and penalties levied
hereunder.
(i) "Service" or "selected service" includes all
nonprofessional activities engaged in for other persons for a
consideration, which involve the rendering of a service as
distinguished from the sale of tangible personal property, but
shall not include contracting, personal services or the services
rendered by an employee to his employer or any service rendered
for resale.
(j) "Purchaser" means a person who purchases tangible
personal property or a service taxed by this article.
(k) "Personal service" includes those:
(1) Compensated by the payment of wages in the ordinary
course of employment; and
(2) Rendered to the person of an individual without, at the
same time, selling tangible personal property, such as nursing,
barbering, shoe shining, manicuring and similar services.
(l) "Taxpayer" means any person liable for the tax imposed
by this article.
(m) "Drugs" includes all sales of drugs or appliances to a
purchaser, upon prescription of a physician or dentist and anyother professional person licensed to prescribe.
(n) (1) "Directly used or consumed" in the activities of
manufacturing, transportation, transmission, communication or the
production of natural resources means used or consumed in those
activities or operations which constitute an integral and
essential part of such activities, as contrasted with and
distinguished from those activities or operations which are
simply incidental, convenient or remote to such activities.
(2) Uses of property or consumption of services which
constitute direct use or consumption in the activities of
manufacturing, transportation, transmission, communication or the
production of natural resources includes only:
(A) In the case of tangible personal property, physical
incorporation of property into a finished product resulting from
manufacturing production or the production of natural resources;
(B) Causing a direct physical, chemical or other change upon
property undergoing manufacturing production or production of
natural resources;
(C) Transporting or storing property undergoing
transportation, communication, transmission, manufacturing
production or production of natural resources;
(D) Measuring or verifying a change in property directly
used in transportation, communication, transmission,
manufacturing production or production of natural resources;
(E) Physically controlling or directing the physical
movement or operation of property directly used intransportation, communication, transmission, manufacturing
production or production of natural resources;
(F) Directly and physically recording the flow of property
undergoing transportation, communication, transmission,
manufacturing production or production of natural resources;
(G) Producing energy for property directly used in
transportation, communication, transmission, manufacturing
production or production of natural resources;
(H) Facilitating the transmission of gas, water, steam or
electricity from the point of their diversion to property
directly used in transportation, communication, transmission,
manufacturing production or production of natural resources;
(I) Controlling or otherwise regulating atmospheric
conditions required for transportation, communication,
transmission, manufacturing production or production of natural
resources;
(J) Serving as an operating supply for property undergoing
transmission, manufacturing production or production of natural
resources, or for property directly used in transportation,
communication, transmission, manufacturing production or
production of natural resources;
(K) Maintenance or repair of property, including maintenance
equipment, directly used in transportation, communication,
transmission, manufacturing production or production of natural
resources;
(L) Storage, removal or transportation of economic wasteresulting from the activities of manufacturing, transportation,
communication, transmission or the production of natural
resources;
(M) Pollution control or environmental quality or protection
activity directly relating to the activities of manufacturing,
transportation, communication, transmission or the production of
natural resources and personnel, plant, product or community
safety or security activity directly relating to the activities
of manufacturing, transportation, communication, transmission or
the production of natural resources; or
(N) Otherwise be used as an integral and essential part of
transportation, communication, transmission, manufacturing
production or production of natural resources.
(3) Uses of property or services which would not constitute
direct use or consumption in the activities of manufacturing,
transportation, transmission, communication or the production of
natural resources include, but are not limited to:
(A) Heating and illumination of office buildings;
(B) Janitorial or general cleaning activities;
(C) Personal comfort of personnel;
(D) Production planning, scheduling of work, or inventory
control;
(E) Marketing, general management, supervision, finance,
training, accounting and administration; or
(F) An activity or function incidental or convenient to
transportation, communication, transmission, manufacturingproduction or production of natural resources, rather than an
integral and essential part of such activities.
(o) "Contracting":
(1) In general. -- "Contracting" means and includes the
furnishing of work, or both materials and work, for another (by
a sole contractor, general contractor, prime contractor or
subcontractor) in fulfillment of a contract for the construction,
alteration, repair, decoration or improvement of a new or
existing building or structure, or any part thereof, or for
removal or demolition of a building or structure, or any part
thereof, or for the alteration, improvement or development of
real property.
(2) Form of contract not controlling. -- An activity that
falls within the scope of the definition of contracting shall
constitute contracting regardless of whether such contract
governing the activity is written or verbal and regardless of
whether it is in substance or form a lump sum contract, a cost-
plus contract, a time and materials contract, whether or not
open-ended, or any other kind of construction contract.
(3) Special rules. -- For purposes of this definition:
(A) The term "structure" includes, but is not limited to,
everything built up or composed of parts joined together in some
definite manner and attached or affixed to real property, or
which adds utility to real property or any part thereof, or which
adds utility to a particular parcel of property and is intended
to remain there for an indefinite period of time.
(B) The term "alteration" means, and is limited to,
alterations which are capital improvements to a building or
structure or to real property.
(C) The term "repair" means, and is limited to, repairs
which are capital improvements to a building or structure or to
real property.
(D) The term "decoration" means, and is limited to,
decorations which are capital improvements to a building or
structure or to real property.
(E) The term "improvement" means, and is limited to,
improvements which are capital improvements to a building or
structure or to real property.
(F) The term "capital improvement" means improvements that
are affixed to or attached to and become a part of a building or
structure or the real property or which add utility to real
property or any part thereof and that last, or are intended to be
relatively permanent. As used herein, "relatively permanent"
means lasting at least a year or longer in duration without the
necessity for regularly scheduled recurring service to maintain
such capital improvement. "Regular recurring service" means
regularly scheduled service intervals of less than one year.
(G) Contracting does not include the furnishing of work, or
both materials and work in the nature of hookup, connection,
installation or other services if such service is incidental to
the retail sale of tangible personal property from the service
provider's inventory: Provided, That such hookup, connection orinstallation of the foregoing is incidental to the sale of the
same and performed by the seller thereof or performed in
accordance with arrangements made by the seller thereof.
Examples of transactions that are excluded from the definition of
contracting pursuant hereto include, but are not limited to, the
sale of wall-to-wall carpeting and the installation of wall-to-
wall carpeting, the sale, hookup and connection of mobile homes,
window air conditioning units, dishwashers, clothing washing
machines or dryers, other household appliances, drapery rods,
window shades, venetian blinds, canvas awnings, free standing
industrial or commercial equipment and other similar items of
tangible personal property. Repairs made to the foregoing are
within the definition of contracting if such repairs involve
permanently affixing to or improving real property or something
attached thereto which extends the life of the real property or
something affixed thereto or allows or is intended to allow such
real property or thing permanently attached thereto to remain in
service for a year or longer.
(p) "Manufacturing" means a systematic operation or
integrated series of systematic operations engaged in as a
business or segment of a business which transforms or converts
tangible personal property by physical, chemical or other means
into a different form, composition or character from that in
which it originally existed.
(q) "Transportation" means the act or process of conveying,
as a commercial enterprise, passengers or goods from one place orgeographical location to another place or geographical location.
(r) "Transmission" means the act or process of causing
liquid, natural gas or electricity to pass or be conveyed from
one place or geographical location to another place or
geographical location through a pipeline or other medium for
commercial purposes.
(s) "Communication" means all telephone, radio, light, light
wave, radio telephone, telegraph and other communication or means
of communication, whether used for voice communication, computer
data transmission or other encoded symbolic information transfers
and shall include commercial broadcast radio, commercial
broadcast television and cable television.
(t) "Production of natural resources" means the performance,
by either the owner of the natural resources or another, of the
act or process of exploring, developing, severing, extracting,
reducing to possession, processing and loading for shipment and
shipment for sale, profit or commercial use of any natural
resource products and any reclamation, waste disposal or
environmental activities associated therewith.
(u) "Management information services facility" means a
building, or any part thereof, or a complex of buildings, or any
part thereof, including the machinery and equipment located
therein, that is exclusively dedicated to providing management
information services to the owner or operator thereof or to
another person.
(v) "Management information services" means, and is limitedto, data processing, data storage, data recovery and backup,
programming recovery and backup, telecommunications, computation
and computer processing, computer programming, electronic
information, and data management activities, or any combination
of such activities, when such activity, or activities, is not
subject to regulation by the West Virginia public service
commission and such activity, or activities, is for the purpose
of managing, planning for, organizing or operating, any
industrial or commercial business, or any enterprise, facility or
facilities of an industrial or commercial business, whether such
industrial or commercial business or enterprise, facility or
facilities of an industrial or commercial business is located
within or without this state and without regard to whether such
industrial or commercial business, or enterprise, facility or
facilities of an industrial or commercial business is owned by
the provider of the management information services or by a
"related person", as defined in Section 267(b) of the Internal
Revenue Code of 1986, as amended.
(w) (1) "Directly used or consumed" in the activities of gas
storage, the generation or production or sale of electric power,
the provision of a public utility service or the operation of a
utility business, means used or consumed in those activities or
operations which constitute an integral and essential part of
such activities or operation, as contrasted with and
distinguished from activities or operations which are simply
incidental, convenient or remote to such activities.
(2) Uses of property or consumption of services which
constitute direct use or consumption in the activities of gas
storage, the generation or production of sale of electric power,
the provision of a public utility service, or the operation of a
utility business include only:
(A) Tangible personal property or services, including
equipment, machinery, apparatus, supplies, fuel and power and
appliances, which are used immediately in production or
generation activities and equipment, machinery, supplies, tools,
and repair parts used to keep in operation exempt production or
generation devices. For purposes of this subsection, production
or generation activities shall commence from the intake, receipt
or storage of raw materials at the production plant site;
(B) Tangible personal property or services, including
equipment, machinery, apparatus, supplies, fuel and power,
appliances, pipes, wires and mains which are used immediately in
the transmission or distribution of gas, water and electricity
to the public, and equipment, machinery, tools, repair parts and
supplies used to keep in operation exempt transmission or
distribution devices, and such vehicles and their equipment as
are specifically designed and equipped for such purposes are
exempt from the tax when used to keep a transmission or
distribution system in operation or repair. For purposes of this
subsection, transmission or distribution activities shall
commence from the close of production at a production plant or
wellhead when a product is ready for transmission or distributionto the public and shall conclude at the point where the product
is received by the public;
(C) Tangible personal property or services, including
equipment, machinery, apparatus, supplies, fuel and power,
appliance, pipes, wires and mains, which are used immediately in
the storage of gas or water, and equipment, machinery, tools,
supplies and repair parts used to keep in operation exempt
storage devices;
(D) Tangible personal property or services used immediately
in the storage, removal or transportation of economic waste
resulting from the activities of gas storage, the generation or
production or sale of electric power, the provision of a public
utility service, or the operation of a utility business;
(E) Tangible personal property or services used immediately
in pollution control or environmental quality or protection
activity or community safety or security directly relating to the
activities of gas storage, generation or production or sale of
electric power, the provision of a public utility service or the
operation of a utility business.
(3) Uses of property or services which would not constitute
direct use or consumption in the activities of gas storage,
generation or production or sale of electric power, the provision
of a public utility service or the operation of a utility
business include, but are not limited to:
(A) Heating and illumination of office buildings;
(B) Janitorial or general cleaning activities;
(C) Personal comfort of personnel;
(D) Production planning, scheduling of work or inventory
control;
(E) Marketing, general management, supervision, finance,
training, accounting and administration; or
(F) An activity or function incidental or convenient to the
activities of gas storage, generation or production or sale of
electric power, the provision of public utility service or the
operation of a utility business.
(x) "Gas storage" means the injection of gas into a storage
reservoir, or the storage of gas for any period of time in a
storage reservoir, or the withdrawal of gas from a storage
reservoir, engaged in by businesses subject to the business and
occupation tax imposed by sections two and two-e, article
thirteen of this chapter.
(y) "Generating or producing or selling of electric power"
means the generation, production or sale of electric power
engaged in by businesses subject to the business and occupation
tax imposed by section two, two-d, two-m or two-n, article
thirteen of this chapter.
(z) "Providing a public service or the operating of a
utility business" means the providing of a public service or the
operating of a utility by businesses subject to the business and
occupation tax imposed by sections two and two-d, article
thirteen of this chapter.
(aa) "Returnable beverage container" means returnable softdrink bottles, fruit drink containers or other returnable
beverage container on which a container deposit has been charged
by a retailer.
§11-15-9. Exemptions.
The following sales and services are exempt:
(a) Sales of gas, steam and water delivered to consumers
through mains or pipes and sales of electricity;
(b) Sales of textbooks 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, board of
trustees of the university system of West Virginia or the board
of directors for colleges located in this state;
(c) Sales of property or services to the state, its
institutions or subdivisions, governmental units, institutions or
subdivisions of other states: Provided, That the law of such
other state provides the same exemption to governmental units or
subdivisions of this state and to the United States, including
agencies of federal, state or local governments for distribution
in public welfare or relief work;
(d) Sales of vehicles which are titled by the division of
motor vehicles and which are subject to the tax imposed by
section four, article three, chapter seventeen-a of this code, or
like tax;
(e) Sales of property or services to churches and bona fide
charitable organizations who make no charge whatsoever for theservices they render: Provided, That the exemption herein
granted shall apply only to services, equipment, supplies, food
for meals and materials directly used or consumed by these
organizations, and shall not apply to purchases of gasoline or
special fuel;
(f) Sales of tangible personal property or services to a
corporation or organization which has a current registration
certificate issued under article twelve of this chapter is exempt
from federal income taxes under Section 501(c)(3) or (c)(4) of
the Internal Revenue Code of 1986, as amended, and is:
(1) A church or a convention or association of churches as
defined in Section 170 of the Internal Revenue Code of 1986, as
amended;
(2) An elementary or secondary school which maintains a
regular faculty and curriculum and has a regularly enrolled body
of pupils or students in attendance at the place in this state
where its educational activities are regularly carried on;
(3) A corporation or organization which annually receives
more than one half of its support from any combination of gifts,
grants, direct or indirect charitable contributions or membership
fees;
(4) An organization which has no paid employees and its
gross income from fund raisers, less reasonable and necessary
expenses incurred to raise such gross income (or the tangible
personal property or services purchased with such net income), is
donated to an organization which is exempt from income taxesunder Section 501(c)(3) or (c)(4) of the Internal Revenue Code of
1986, as amended;
(5) A youth organization, such as the girl scouts of the
United States of America, the boy scouts of America or the YMCA
Indian guide/princess program and the local affiliates thereof,
which is organized and operated exclusively for charitable
purposes and has as its primary purpose the nonsectarian
character development and citizenship training of its members;
(6) For purposes of this subsection:
(A) The term "support" includes, but is not limited to:
(i) Gifts, grants, contributions or membership fees;
(ii) Gross receipts from fund raisers which include receipts
from admissions, sales of merchandise, performance of services or
furnishing of facilities in any activity which is not an
unrelated trade or business within the meaning of Section 513 of
the Internal Revenue Code of 1986, as amended;
(iii) Net income from unrelated business activities, whether
or not such activities are carried on regularly as a trade or
business;
(iv) Gross investment income as defined in Section 509(e) of
the Internal Revenue Code of 1986, as amended;
(v) Tax revenues levied for the benefit of a corporation or
organization either paid to or expended on behalf of such
organization; and
(vi) The value of services or facilities (exclusive of
services or facilities generally furnished to the public withoutcharge) furnished by a governmental unit referred to in Section
170(c)(1) of the Internal Revenue Code of 1986, as amended, to an
organization without charge. This term does not include any gain
from the sale or other disposition of property which would be
considered as gain from the sale or exchange of a capital asset,
or the value of an exemption from any federal, state or local tax
or any similar benefit;
(B) The term "charitable contribution" means a contribution
or gift to or for the use of a corporation or organization,
described in Section 170(c)(2) of the Internal Revenue Code of
1986, as amended;
(C) The term "membership fee" does not include any amounts
paid for tangible personal property or specific services rendered
to members by the corporation or organization; or
(7) The exemption allowed by subsection (f) does not apply
to sales of gasoline or special fuel or to sales of tangible
personal property or services to be used or consumed in the
generation of unrelated business income as defined in Section 513
of the Internal Revenue Code of 1986, as amended. The provisions
of this subsection as amended by this article shall apply to
sales made after the thirtieth day of June, one thousand nine
hundred eighty-nine: Provided, That the exemption herein granted
shall apply only to services, equipment, supplies and materials
used or consumed in the activities for which such organizations
qualify as tax exempt organizations under the Internal Revenue
Code by these organizations and shall not apply to purchases ofgasoline or special fuel;
(g) Sales of property or services to persons engaged in this
state in the business of manufacturing, transportation,
transmission, communication or in the production of natural
resources: Provided, That on and after the first day of July,
one thousand nine hundred eighty-seven, the exemption provided in
this subsection shall apply only to services, machinery, supplies
and materials directly used or consumed in the activities of
manufacturing, transportation, transmission, communication or the
production of natural resources in the businesses or
organizations named above and shall not apply to purchases of
gasoline or special fuel: Provided, however, That on and after
the first day of May, one thousand nine hundred ninety-three, the
exemption provided in this subsection shall apply only to
services, machinery, supplies and materials directly used or
consumed in the activities of manufacturing, transportation,
transmission, communication, production of natural resources, gas
storage, generation or production of selling electric power,
provision of a public utility service or the operation of a
utility service or the operation of a utility business, in the
businesses or organizations named above and shall not apply to
purchases of gasoline or special fuel;
(h) An isolated transaction in which any taxable service or
any tangible personal property is sold, transferred, offered for
sale or delivered by the owner thereof or by his representative
for the owner's account, such sale, transfer, offer for sale ordelivery not being made in the ordinary course of repeated and
successive transactions of like character by such owner or on his
account by such representative: Provided, That nothing contained
herein may be construed to prevent an owner who sells, transfers
or offers for sale tangible personal property in an isolated
transaction through an auctioneer from availing himself or
herself of the exemption provided herein, regardless where such
isolated sale takes place. The tax commissioner may adopt such
legislative rule pursuant to chapter twenty-nine-a of this code
as he deems necessary for the efficient administration of this
exemption;
(i) Sales of tangible personal property or of any taxable
services rendered for use or consumption in connection with the
commercial production of an agricultural product the ultimate
sale of which will be subject to the tax imposed by this article
or which would have been subject to tax under this article:
Provided, That sales of tangible personal property and services
to be used or consumed in the construction of or permanent
improvement to real property and sales of gasoline and special
fuel shall not be exempt: Provided, however, That nails and
fencing shall not be considered as improvements to real property;
(j) Sales of tangible personal property to a person for the
purpose of resale in the form of tangible personal property:
Provided, That sales of gasoline and special fuel by distributors
and importers shall be taxable except when the sale is to another
distributor for resale: Provided, however, That sales ofbuilding materials or building supplies or other property to any
person engaging in the activity of contracting, as defined in
this article, which is to be installed in, affixed to or
incorporated by such person or his agent into any real property,
building or structure shall not be exempt under this subsection,
except that sales of tangible personal property to a person
engaging in the activity of contracting pursuant to a written
contract with the United States, this state, or with a political
subdivision thereof, or with a public corporation created by the
Legislature or by another governmental entity pursuant to an act
of the Legislature, for a building or structure, or improvement
thereto, or other improvement to real property that is or will be
owned and used by the governmental entity for a governmental or
proprietary purpose, who incorporates such property in such
building, structure or improvement shall, with respect to such
tangible personal property, nevertheless be deemed to be the
vendor of such property to the governmental entity and any person
seeking to qualify for and assert this exception must do so
pursuant to such legislative rules and regulations as the tax
commissioner may promulgate and upon such forms as the tax
commissioner may prescribe. A subcontractor who, pursuant to a
written subcontract with a prime contractor who qualifies for
this exception, provides equipment, or materials, and labor to
such a prime contractor shall be treated in the same manner as
the prime contractor is treated with respect to the prime
contract under this exception and the legislative rules andregulations promulgated by the tax commissioner: Provided
further, That the exemption for government contractors in the
preceding proviso shall expire on the first day of October, one
thousand nine hundred ninety, subject to the transition rules set
forth in section eight-c of this article;
(k) Sales of property or services to nationally chartered
fraternal or social organizations for the sole purpose of free
distribution in public welfare or relief work: Provided, That
sales of gasoline and special fuel shall be taxable;
(l) Sales and services, fire fighting or station house
equipment, including construction and automotive, made to any
volunteer fire department organized and incorporated under the
laws of the state of West Virginia: Provided, That sales of
gasoline and special fuel shall be taxable;
(m) Sales of newspapers when delivered to consumers by route
carriers;
(n) Sales of drugs dispensed upon prescription and sales of
insulin to consumers for medical purposes;
(o) Sales of radio and television broadcasting time,
preprinted advertising circulars and newspaper and outdoor
advertising space for the advertisement of goods or services;
(p) Sales and services performed by day-care centers;
(q) Casual and occasional sales of property or services not
conducted in a repeated manner or in the ordinary course of
repetitive and successive transactions of like character by a
corporation or organization which is exempt from tax undersubsection (f) of this section on its purchases of tangible
personal property or services:
(1) For purposes of this subsection, the term "casual and
occasional sales not conducted in a repeated manner or in the
ordinary course of repetitive and successive transactions of like
character" means sales of tangible personal property or services
at fund raisers sponsored by a corporation or organization which
is exempt, under subsection (f) of this section, from payment of
the tax imposed by this article on its purchases, when such fund
raisers are of limited duration and are held no more than six
times during any twelve-month period and limited duration means
no more than eighty-four consecutive hours;
(2) The provisions of this subsection, as amended by this
article, shall apply to sales made after the thirtieth day of
June, one thousand nine hundred eighty-nine;
(r) Sales of property or services to a school which has
approval from the board of trustees of the university system of
West Virginia or the board of directors of the state college
system to award degrees, which has its principal campus in this
state, and which is exempt from federal and state income taxes
under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended: Provided, That sales of gasoline and special fuel shall
be taxable;
(s) Sales of mobile homes to be utilized by purchasers as
their principal year-round residence and dwelling: Provided,
That these mobile homes shall be subject to tax at the threepercent rate;
(t) Sales of lottery tickets and materials by licensed
lottery sales agents and lottery retailers authorized by the
state lottery commission, under the provisions of article twenty-
two, chapter twenty-nine of this code;
(u) Leases of motor vehicles titled pursuant to the
provisions of article three, chapter seventeen-a of this code to
lessees for a period of thirty or more consecutive days. This
exemption shall apply to leases executed on or after the first
day of July, one thousand nine hundred eighty-seven, and to
payments under long-term leases executed before such date, for
months thereof beginning on or after such date;
(v) Sales of propane to consumers for poultry house heating
purposes, with any seller to such consumer who may have prior
paid such tax in his price, to not pass on the same to the
consumer, but to make application and receive refund of such tax
from the tax commissioner, pursuant to rules and regulations
which shall be promulgated by the tax commissioner; and
notwithstanding the provisions of section eighteen of this
article or any other provisions of such article to the contrary;
(w) Any sales of tangible personal property or services
purchased after the thirtieth day of September, one thousand nine
hundred eighty-seven, and lawfully paid for with food stamps
pursuant to the federal food stamp program codified in 7 United
States Code, §2011, et seq., as amended, or with drafts issued
through the West Virginia special supplemental food program forwomen, infants and children codified in 42 United States Code,
§1786;
(x) Sales of tickets for activities sponsored by elementary
and secondary schools located within this state;
(y) Sales of electronic data processing services and related
software: Provided, That for the purposes of this subsection
"electronic data processing services" means: (1) The processing
of another's data, including all processes incident to processing
of data such as keypunching, keystroke verification, rearranging
or sorting of previously documented data for the purpose of data
entry or automatic processing and changing the medium on which
data is sorted, whether these processes are done by the same
person or several persons; and (2) providing access to computer
equipment for the purpose of processing data or examining or
acquiring data stored in or accessible to such computer
equipment;
(z) Tuition charged for attending educational summer camps;
(aa) Sales of building materials or building supplies or
other property to an organization qualified under Section
501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as
amended, which are to be installed in, affixed to or incorporated
by such organization or its agent into real property, or into a
building or structure which is or will be used as permanent low-
income housing, transitional housing, emergency homeless shelter,
domestic violence shelter or emergency children and youth shelter
if such shelter is owned, managed, developed or operated by anorganization qualified under Section 501(c)(3) or (c)(4) of the
Internal Revenue Code of 1986, as amended;
(bb) Dispensing of services performed by one corporation for
another corporation when both corporations are members of the
same controlled group. Control means ownership, directly or
indirectly, of stock possessing fifty percent or more of the
total combined voting power of all classes of the stock of a
corporation entitled to vote or ownership, directly or
indirectly, of stock possessing fifty percent or more of the
value of the corporation;
(cc) Food for the following shall be exempt:
(1) Food purchased or sold by public or private schools,
school sponsored student organizations or school sponsored
parent-teacher associations to students enrolled in such school
or to employees of such school during normal school hours; but
not those sales of food made to the general public;
(2) Food purchased or sold by a public or private college or
university or by a student organization officially recognized by
such college or university to students enrolled at such college
or university when such sales are made on a contract basis so
that a fixed price is paid for consumption of food products for
a specific period of time without respect to the amount of food
product actually consumed by the particular individual
contracting for the sale and no money is paid at the time the
food product is served or consumed;
(3) Food purchased or sold by a charitable or privatenonprofit organization, a nonprofit organization or a
governmental agency under a program to provide food to low-income
persons at or below cost;
(4) Food sold in an occasional sale by a charitable or
nonprofit organization including volunteer fire departments and
rescue squads, if the purpose of the sale is to obtain revenue
for the functions and activities of the organization and the
revenue so obtained is actually expended for that purpose;
(5) Food sold by any religious organization at a social or
other gathering conducted by it or under its auspices, if the
purpose in selling the food is to obtain revenue for the
functions and activities of the organization and the revenue
obtained from selling the food is actually used in carrying on
such functions and activities: Provided, That purchases made by
such organizations shall not be exempt as a purchase for resale;
(dd) Sales of food by little leagues, midget football
leagues, youth football or soccer leagues and similar types of
organizations, including scouting groups and church youth groups,
if the purpose in selling the food is to obtain revenue for the
functions and activities of the organization and the revenues
obtained from selling the food is actually used in supporting or
carrying on functions and activities of the groups: Provided,
That such purchases made by such organizations shall not be
exempt as a purchase for resale;
(ee) Charges for room and meals by fraternities and
sororities to their members: Provided, That such purchases madeby a fraternity or sorority shall not be exempt as a purchase for
resale;
(ff) Sales of or charges for the transportation of
passengers in interstate commerce;
(gg) Sales of tangible personal property or services to any
person which this state is prohibited from taxing under the laws
of the United States or under the constitution of this state;
(hh) Sales of tangible personal property or services to any
person who claims exemption from the tax imposed by this article
or article fifteen-a of this chapter pursuant to the provisions
of any other chapter of this code;
(ii) Charges for the services of opening and closing a
burial lot;
(jj) Sales of livestock, poultry or other farm products in
their original state by the producer thereof or a member of the
producer's immediate family who is not otherwise engaged in
making retail sales of tangible personal property; and sales of
livestock sold at public sales sponsored by breeders or registry
associations or livestock auction markets: Provided, That the
exemptions allowed by this subsection shall apply to sales made
on or after the first day of July, one thousand nine hundred
ninety, and may be claimed without presenting or obtaining
exemption certificates: Provided, however, That the farmer shall
maintain adequate records;
(kk) Sales of motion picture films to motion picture
exhibitors for exhibition if the sale of tickets or the chargefor admission to the exhibition of the film is subject to the tax
imposed by this article and sales of coin-operated video arcade
machines or video arcade games to a person engaged in the
business of providing such machines to the public for a charge
upon which the tax imposed by this article is remitted to the tax
commissioner: Provided, That the exemption provided in this
subsection shall apply to sales made on or after the first day of
July, one thousand nine hundred ninety, and may be claimed by
presenting to the seller a properly executed exemption
certificate;
(ll) Sales of aircraft repair, remodeling and maintenance
services when such services are to an aircraft operated by a
certified or licensed carrier of persons or property, or by a
governmental entity, or to an engine or other component part of
an aircraft operated by a certificated or licensed carrier of
persons or property, or by a governmental entity and sales of
tangible personal property that is permanently affixed or
permanently attached as a component part of an aircraft owned or
operated by a certificated or licensed carrier of persons or
property, or by a governmental entity, as part of the repair,
remodeling or maintenance service and sales of machinery, tools
or equipment, directly used or consumed exclusively in the
repair, remodeling or maintenance of aircraft, aircraft engines
or aircraft component parts, for a certificated or licensed
carrier of persons or property, or for a governmental entity;
(mm) Sales of tangible personal property and services to aperson entitled to claim the tax credit for investment in certain
management information services facilities allowed under section
three-c, article thirteen-d of this chapter, pursuant to the
issuance of a management information services tax credit
certification by the tax commissioner in accordance with
subsection (e) of said section, when such property or services
are directly used or consumed by the purchaser in the operation
of the management information services facility, as defined in
section two of this article for which credit is allowed under
section three-c, article thirteen-d of this chapter. Tangible
personal property, or services, directly used or consumed in the
operation of a management information services facility includes
only: (1) Computer processing and telecommunications equipment;
(2) data storage and input/output devices; (3) disaster recovery
services; (4) supplies; (5) application, telecommunication and
operating system software; (6) repair and maintenance of any of
the aforesaid items; and (7) other tangible personal property or
services directly used or consumed in the operation of a
management information services facility: Provided, That the
property is purchased or leased after the thirty-first day of
March, one thousand nine hundred ninety-one. This exemption
shall not apply to tangible personal property, or services, that
are not directly used or consumed in the operation of a
management information services facility, or to gasoline or
special fuel: Provided, however, That nothing in this paragraph
shall be construed to limit, exclude or preclude the applicationor availability of any other exemption set forth in this section,
or elsewhere in this code, which might otherwise apply to any
sale of tangible personal property or services;
(nn) Charges for memberships or services provided by health
and fitness organizations relating to personalized fitness
programs;
(oo) Sales of services by individuals who baby-sit for a
profit: Provided, That the gross receipts of the individual from
the performance of baby-sitting services do not exceed five
thousand dollars in a taxable year; and
(pp) A corporation or organization which is a not-for-profit
entity which charges membership dues utilized for and
contributing significantly to traffic and pedestrian safety and
education programs whether or not the corporation or organization
is exempt from income tax under Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended; and
(qq) Deposits charged for returnable beverage containers
including deposits charged for returnable soft drink bottles.
NOTE: The purpose of this bill is to exempt from the
consumer sales tax deposits charged for returnable containers
including deposits charged for returnable soft drink bottles.
The bill also excludes deposits on returnable containers from the
definitions of the terms sale, sales and selling as those terms
are defined in provisions relating to 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.