H. B. 2166
(By Delegates Beach, Williams and Claypole)
[Introduced February 20, 1997; referred to the
Committee on Political Subdivisions then Finance.]
A BILL to amend and reenact section five, article thirteen,
chapter eight of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, relating to
authorizing municipalities to impose a business and
occupation or privilege tax on only the net income of
contractors.
Be it enacted by the Legislature of West Virginia:
That section five, article thirteen, chapter eight of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 13. TAXATION AND FINANCE.
§8-13-5. Business and occupation or privilege tax; limitation
on rates; effective date of tax; exemptions;
activity in two or more municipalities; administrative provisions.
(a) Authorization to impose tax. -- (1) Whenever any
business activity or occupation, for which the state imposed its
annual business and occupation or privilege tax under article
thirteen, chapter eleven of this code, prior to the first day of
July, one one thousand nine hundred eighty-seven, is engaged in
or carried on within the corporate limits of any municipality,
the governing body thereof shall have plenary power and
authority, unless prohibited by general law, to impose a similar
business and occupation tax thereon for the use of the
municipality.
(2) Municipalities may impose a business and occupation or
privilege tax upon every person engaging or continuing within the
municipality in the business of aircraft or building repair,
remodeling, maintenance, modification and refurbishing services
to any aircraft or building to an engine or other component part
of any aircraft or building as a separate business activity.
(3) Municipalities may impose a business and occupation or
privilege tax upon the net income only of every person engaging
or continuing within the municipality in the business of a
contractor, as defined in section three, article eleven, chapter
twenty-one of this code.
(b) Maximum tax rates. -- In no case shall the rate of such the municipal business and occupation or privilege tax on a
particular activity exceed the maximum rate imposed by the state,
exclusive of surtaxes, upon any business activities or privileges
taxed under sections two-a, two-b, two-c, two-d, two-e, two-g,
two-h, two-i and two-j, article thirteen of said chapter eleven
of this code, as such the rates were in effect under said article
thirteen, on the first day of January, one one thousand nine
hundred fifty-nine, or in excess of one percent of gross income
under section two-k of said article thirteen, or in excess of
three tenths of one percent of gross value or gross proceeds of
sale under section two-m of said article thirteen. The rate of
municipal business and occupation or privilege tax on the
activity described in subdivision (2), subsection (a) of this
section shall be ten one-hundredths of one percent.
(c) Effective date of local tax. -- Any taxes levied
pursuant to the authority of this section may be made operative
as of the first day of the then current fiscal year or any date
thereafter: Provided, That any new imposition of tax or any
increase in the rate of tax upon any business, occupation or
privilege taxed under section two-e of said article thirteen,
chapter eleven of this code, shall apply only to gross income
derived from contracts entered into after the effective date of
such the imposition of tax or rate increase, and which effective date shall may not be retroactive in any respect: Provided,
however, That no tax imposed or revised under this section upon
public utility services may be effective unless and until the
municipality provides written notice of the same by certified
mail to said the public utility at least sixty days prior to the
effective date of said the tax or revision thereof.
(d) Exemptions. -- A municipality shall may not impose its
business and occupation or privilege tax on any activity that was
exempt from the state's business and occupation tax under the
provisions of section three, article thirteen of said chapter
eleven, prior to the first day of July, one one thousand nine
hundred eighty-seven, and determined without regard to any annual
or monthly monetary exemption also specified therein.
(e) Activity in two or more municipalities. -- Whenever the
business activity or occupation of the taxpayer is engaged in or
carried on in two or more municipalities of this state, the
amount of gross income, or gross proceeds of sales, taxable by
each municipality shall be determined in accordance with such
legislative regulations as the tax commissioner may prescribe.
It being the intent of the Legislature that multiple taxation of
the same gross income, or gross proceeds of sale, under the same
classification by two or more municipalities shall may not be
allowed, and that gross income, or gross proceeds of sales, derived from activity engaged in or carried on within this state,
that is presently subject to state tax under section two-c or
two-h, article thirteen, chapter eleven of this code, which is
not taxed or taxable by any other municipality of this state, may
be included in the measure of tax for any municipality in this
state, from which the activity was directed, or in the absence
thereof, the municipality in this state in which the principal
office of the taxpayer is located. Nothing in this subsection
(e) shall be construed as permitting any municipality to tax
gross income or gross proceeds of sales in violation of the
constitution and laws of this state or the United States, or as
permitting a municipality to tax any activity that has a definite
situs outside its taxing jurisdiction.
(f) Where the governing body of a municipality imposes a tax
authorized by this section, such the governing body shall have
the authority to offer tax credits from such tax as incentives
for new and expanding businesses located within the corporate
limits of the municipality.
(g) Administrative provisions. -- The ordinance of a
municipality imposing a business and occupation or privilege tax
shall provide procedures for the assessment and collection of
such the tax, which shall be similar to those procedures in
article thirteen, chapter eleven of this code, as in existence on the thirtieth day of June, thirtieth one thousand nine hundred
seventy-eight, or to those procedures in article ten, chapter
eleven of this code, and shall conform with such the provisions
as they relate to waiver of penalties and additions to tax.
NOTE: The purpose of this bill is to require municipalities
that impose business and occupation or privilege taxes on
contractors to do so only on net income.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.