H. B. 2820
(By Delegate Jenkins)
January 14, 1998
; referred to the
Committee on Finance.]
A BILL to amend chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article six-f, generally
relating to taxation; setting forth short title; defining
terms, specifying the valuation of commercial computer
property for purposes of the ad valorem property tax;
specifying initial determination of whether a given item of
property is commercial computer property to be made by
county assessor of the county, setting forth methods and
procedures for protest and appeal and time limitations
therefor; setting forth effective date.
Be it enacted by the Legislature of West Virginia:
That chapter eleven of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article six-f, to read
SPECIAL METHOD FOR VALUATION OF CERTAIN COMPUTER
§11-6F-1. Short title.
This article shall be known and cited as the "Commercial
Computer Property Valuation Act."
(a) When used in this article, or in the administration of
this article, terms defined in subsection (b) of this section
have the meanings ascribed to them by this section, unless a
different meaning is clearly required by the context in which the
term is used.
(b) Terms defined.
(1) "Business" means any person holding a valid current West
Virginia business registration certificate under article twelve-c
of this chapter engaging in business in this state.
(2) "Commercial computer property" means computer property
directly used in manufacturing.
(3) "Computer" means an electronic, magnetic, optical,
electrochemical, or other high speed data processing device the
primary end use function of which includes performing logical,
arithmetical, or data storage operations. The term "computer" includes any data storage apparatus or communication apparatus
directly related to or operating in conjunction with such device.
The term "computer" includes any connected or directly related
device, equipment or apparatus which enables the computer to
store, retrieve or communicate computer programs, computer data
or the results of computer operations to or from a person,
another computer or another device. The term "computer"
includes, but is not limited to, personal computers, desk top
computers, lap-top computers, palm-top computers, microcomputers,
mainframe computers, server computers, and super computers, but
such term does not include an automated typewriter or typesetter,
a portable hand-held calculator or other similar device, any
device that is excluded from the definition of a computer supply,
or any device with a processor, the function of which facilitates
some other end use operation, such as a household appliance or
(4) "Computer data" means any representation of knowledge,
facts, concepts, instruction, or other information computed,
classified, processed, transmitted, received, retrieved,
originated, stored, manifested, measured, detected, recorded,
reproduced, handled or utilized by a computer, computer network,
computer program or computer software, and may be in any medium,
including, but not limited to, computer printouts, microfilm, microfiche, magnetic storage media, optical storage media, punch
paper tape or punch cards, or it may be stored internally in
read-only memory or random access memory of a computer or any
other peripheral device.
(5) "Computer network" means a set of connected devices and
communication facilities, including more than one computer, with
the capability to transmit computer data among such devices
through such communication facilities, and includes local area
(6) "Computer program" means an ordered set of computer data
representing instructions or statements, in a form readable by a
computer, which controls, directs, or otherwise influences the
functioning of a computer or computer network.
(7) "Computer property" means all computers, computer
software, computer data, computer networks, computer programs and
computer supplies, but does not include any printer, or other
peripheral devices connected to or operated by a computer, or any
manufacturing machinery controlled by a computer or any other
machine or device controlled by a computer which does not itself
constitute a computer or computer supply.
(8) "Computer software" means a set of computer programs,
procedures and associated documentation concerned with computer
data or with the operation of a computer, computer program or computer network.
(9) "Computer supply" or "computer supplies" means punch
cards, paper tape, magnetic tape, magnetic disks or diskettes,
optical disks or diskettes, disk or diskette packs, modems,
computer input scanners, and any other tangible input,
transmission or storage medium used in connection with a
computer, a computer network, computer data, computer software or
a computer program. The term "computer supplies" also includes,
but is not limited to, computer work stations, computer monitors,
computer keyboards, computer mice, computer track balls and other
computer pointing devices, computer modems, computer central
processing units, computer hard disk drives, computer floppy disk
drives, computer tape drives, computer drum storage memory drives
and computer compact disk read only memory units (CD ROMS). The
term "computer supplies" includes computer driven and controlled
printers or plotters for the printing of ordinary office
correspondence and similar documents. However, no printer or
printing press or other printing device used in the manufacture
of newspapers or other large volume printing operations shall be
included as a computer supply for purposes of this article. The
term "computer supply" shall not include any manufacturing
machinery controlled by a computer or any other machine or device
controlled by a computer which does not itself constitute a computer or computer supply. The term "computer supplies"
includes computer driven and controlled fax machines or facsimile
machines that interface directly with a computer, but does not
include ordinary stand alone fax machines not interfaced with a
computer, notwithstanding the fact that such ordinary fax
machines may have memory features and other electronic or
cybernetic features similar to those found in a computer.
(10) "Directly used in manufacturing," in relation to
computer property directly used in manufacturing, means directly
used in West Virginia by a manufacturer or manufacturing service
provider in those activities or operations which constitute an
integral and essential part of the manufacturing activity, as
contrasted with and distinguished from those activities or
operations which are simply incidental, convenient or remote to
the manufacturing activity.
(11) "Manufacturer" means a person engaged in the activity
of manufacturing in this state.
(12) "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. Manufacturing includes software development and software manufacturing. In no case does the term
"manufacturing" include the activities of building construction,
construction of other structures or facilities affixed to or on
realty, retailing or agriculture, food processing or food
manufacturing, the operation of any restaurant or retail food
preparation or sales operation, the production of any natural
resource, contract mining or any other activity of severing,
producing, processing or extracting any natural resource.
Manufacturing production begins with the arrival of raw materials
and ends when the property has reached that point where no
further chemical, physical or other changes are to be made to the
resultant property in the production process.
(13) "Manufacturing service provider" means a person
engaged in a manufacturing activity who does not have legal title
to or any economic interest in the tangible personal property
transformed or converted by the manufacturing process, and who
engages in the manufacturing activity as a service to another
(14) "Person" means any natural person, individual, firm,
general partnership, limited partnership, trust, association,
corporation, joint venture, limited liability company, joint
stock company, this state or any subdivision, branch, department
or agency thereof, or any county or municipal government of this state or any subdivision, branch, department or agency thereof,
the government of the United States or any subdivision, branch,
department or agency thereof, any public or private corporation,
municipal corporation of this state, cooperative, estate, trust,
business trust, receiver, executor, administrator, any other
fiduciary, any representative appointed by order of any court or
otherwise acting on behalf of others, or any other group or
combination acting as a unit.
(15) "Salvage value" means the lower of fair market salvage
value or five percent of the original cost of the property.
§11-6F-3. Valuation of commercial computer property.
Notwithstanding any other provision of this code to the
contrary, the value of commercial computer property, for the
purpose of ad valorem property taxation under this chapter and
under article X of the constitution of this state, shall be its
§11-6F-4. Initial determination by county assessor.
The assessor of the county in which a specific item of
property is located shall determine, in writing, whether that
specific item of property is commercial computer property subject
to valuation in accordance with this article. Upon making a
determination that a taxpayer has commercial computer property,
the county assessor shall notify the tax commissioner of that determination, and shall provide such information to the tax
commissioner as the tax commissioner may require relating to that
§11-6F-5. Protest and appeal.
At any time after the property is returned for taxation,
but prior to the first day of January of the assessment year, any
taxpayer may apply to the county assessor for information
regarding the issue of whether any particular item or items or
property constitute commercial computer property under this
article which should be subject to valuation in accordance with
this article. If the taxpayer believes that some portion of the
taxpayer's property is subject to the provisions of this article,
the taxpayer shall file objections in writing with the county
assessor. The county assessor shall decide the matter by either
sustaining the protest and making proper corrections, or by
stating, in writing if requested, the reasons for the county
assessor's refusal. The county assessor may, and if the taxpayer
requests, the county assessor shall, before the first day of
January of the assessment year, certify the question to the tax
commissioner in a statement sworn to by both parties, or if the
parties are unable to agree, in separate sworn statements. The
sworn statement or statements shall contain a full description of
the property and any other information which the tax commissioner may require.
The tax commissioner shall, as soon as possible on receipt
of the question, but in no case later than the twenty-eighth day
of February of the assessment year, instruct the county assessor
as to how the property shall be treated. The instructions issued
and forwarded by mail to the county assessor are binding upon the
county assessor, but either the county assessor or the taxpayer
may apply to the circuit court of the county for review of the
question of the applicability of this article to the property in
the same fashion as is provided for appeals from the county
commission in section twenty-five, article three of this chapter.
The tax commissioner shall prescribe forms on which the questions
under this section shall be certified and the tax commissioner
has the authority to pursue any inquiry and procure any
information which may be necessary for disposition of the matter.
§11-6F-6. Effective date.
This article shall be effective on and after the first day
of July, one thousand nine hundred ninety-seven.
NOTE: The purpose of this bill is to make certain
adjustments and changes to the tax laws. This bill requires
valuation of computers and certain related property directly used
in manufacturing in West Virginia at the lower of fair market
salvage value or five percent of the original cost of the
property for purposes of the ad valorem property tax.
This article is new; therefore, strike-throughs and
underscoring have been omitted.