H. B. 4357


(By Delegates Doyle, Tabb, Michael,
Manual, Stalnaker, Campbell and Duke)
[Introduced February 9, 2004; referred to the
Committee on Political Subdivisions then Finance.]



A BILL to amend the code of West Virginia, 1931, as amended, by adding thereto a new section, designated §8-13-5b; and to amend said code by adding thereto a new section, designated §11-10-11b, all relating to authorizing municipalities to impose an alternative one percent municipal sales and service tax on the privilege of selling tangible personal property or custom software and for the privilege of furnishing certain select services in the municipality in lieu of imposing a business and occupation tax.

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 §8-13-5b; and that said code be amended by adding thereto a new section, designated §11-10-11b, all to read as follows:
CHAPTER 8. MUNICIPAL CORPORATIONS.

ARTICLE 13. TAXATION AND FINANCE.
§8-13-5b. Alternative municipal sales and service tax.
(a) Authorization to impose tax. -- In lieu of imposing the tax authorized by section five of this article, the governing body of any municipality may, by ordinance, impose an alternative municipal sales and service tax on the privilege of selling tangible personal property or custom software and for the privilege of furnishing certain select services in the municipality in accordance with this section for the use of the municipality.
(b) Tax base. -- (1) The base of an alternative municipal sales and service tax imposed pursuant to this section shall be identical to the base of the consumers sales and service tax imposed pursuant to article fifteen, chapter eleven of this code on sales made and services rendered within the boundaries of the municipality: Provided, That all exemptions and exceptions from the consumers sales and service tax shall also apply to the alternative municipal sales and service tax and sales of gasoline and special fuel shall not be subject to special district excise tax but shall remain subject to the tax levied by article fifteen, chapter eleven of this code.
(2) The alternative municipal sales and service tax shall be imposed in addition to the consumers sales and service tax imposed pursuant to article fifteen, chapter eleven of this code on sales made and services rendered within the boundaries of the municipality and, except as exempted or excepted, all sales made and services rendered within the boundaries of the municipality shall remain subject to the tax levied by said article.
(3) The alternative municipal sales and service tax shall be imposed in addition to any tax imposed pursuant to section one, article eighteen, chapter seven of this code, section six, article thirteen of this article, and section twelve, article thirty-eight of this article.
(4) The municipality may not impose a tax pursuant to section five-a, article thirteen of this chapter upon any activity upon which a provision of law requires or results in the imposition of an alternative municipal sales and service tax upon that activity.
(c) Tax rate. -- The rate of an alternative municipal sales and service tax levied pursuant to this section shall be stated in an ordinance enacted by the municipality and shall be at the rate of one cent on each dollar of gross proceeds from sales of tangible personal property and services subject to the tax. The tax on fractional parts of a dollar shall be levied and collected in conformity with the provision of section three, article fifteen, chapter eleven of this code.
(d) Transaction sourcing rules. -- The ordinance of the municipality imposing an alternative municipal sales and service tax shall provide that sales and services subject to the tax shall be sourced in accordance with the provisions of article fifteen-b of this chapter, including, but not limited to, sections fourteen, fifteen, sixteen, seventeen and eighteen thereof.
(e) Collection by tax commissioner. -- The ordinance of the municipality imposing an alternative municipal sales and service tax shall provide for the tax to be collected by the tax commissioner in the same manner as the tax levied by section three, article fifteen, chapter eleven of this code is administered, assessed, collected and enforced.
(f) Notice to tax commissioner. -- Within ten days following the effective date of any amendment or change to the boundary of a municipality imposing an alternative municipal sales and service tax, the municipality shall provide written notice of any change to the boundary of the municipality to the tax commissioner in detail and form required by the commissioner for inclusion in the database required under section thirty-five, article fifteen-b, chapter eleven of this code.
(g) Deposit of net tax collected. -- The ordinance of the municipality imposing an alternative municipal sales and service tax shall provide that the tax commissioner deposit the net amount of tax collected in the alternative municipal sales and service tax fund to the credit of the municipality's subaccount therein and that the money in the subaccount may only be used for the purposes for which the tax authorized by section five of this article may be used.
(h) Establishment of the alternative municipal sales and service tax fund. --(1) There is hereby created a special revenue account in the state treasury designated the "alternative municipal sales and service tax fund" which is an interest-bearing account and shall be invested in the manner described in section nine-c, article six, chapter twelve of this code with the interest and other return earned thereon a proper credit to the fund.
(i) A separate and segregated subaccount within the account shall be established for each municipality that imposes an alternative municipal sales and service tax pursuant to this section. In addition to the alternative municipal sales and service tax levied and collected as provided in this section, funds paid into the account for the credit of any subaccount may also be derived from the following sources:
(1) All interest or return on the investment accruing to the subaccount; and
(2) Any gifts, grants, bequests, transfers, appropriations or donations which are received from any governmental entity or unit or any person, firm, foundation or corporation.
(j) Effective date of alternative municipal sales and service tax. -- Any taxes imposed pursuant to the authority of this section shall be effective on the first day of the calendar month that begins at least sixty days after the date of enactment of the ordinance imposing the tax or at any later date expressly designated in the ordinance that begins on the first day of a calendar month.
(k) Copies of ordinance. -- Upon enactment of an ordinance levying an alternative municipal sales and service tax, a certified copy of the ordinance shall be mailed to the state auditor, as ex officio the chief inspector and supervisor of public offices, the state treasurer and the tax commissioner.
(l) Limited authority to impose tax. -- (1) Notwithstanding any other provision of this code to the contrary, no county, board, political subdivision or any other agency or entity other than a municipality that meets the requirements of this section may impose the tax authorized by this section.
(2) No subsequent amendment to this code shall supersede the provisions of subdivision (1) of this subsection unless the amendment specifically states that the provisions of subdivision (1) of this subsection are superseded.
CHAPTER 11. TAXATION.

ARTICLE 10. PROCEDURE AND ADMINISTRATION.
§11-10-11b. Administration of alternative municipal sales and service tax; commission authorized.

(a)(1) Any municipality which, pursuant to section five-b, article thirteen, chapter eight of this code imposes an alternative municipal sales and service tax shall, by express provision in the ordinance imposing that tax, authorize the state tax commissioner to administer, assess, collect and enforce that tax on behalf of and as its agent.
(2) The municipality shall make such authorization by the adoption of a provision in its ordinance levying an alternative municipal sales and service tax stating its purpose and referring to this section and providing that the ordinance shall be effective on the first day of a month at least sixty days after its adoption.
(3) A certified copy of the ordinance shall be forwarded to the state auditor, the state treasurer and the tax commissioner so that it will be received within five days after its adoption or enactment.
(b) Any alternative municipal sales and service tax administered under this section shall be administered and collected by the tax commissioner in the same manner and subject to the same interest, additions to tax and penalties as provided for the tax imposed in article fifteen of this chapter.
(c) All alternative municipal sales and service tax moneys collected by the tax commissioner under this section shall be paid into the state treasury to the credit of each municipality's subaccount in the alternative municipal sales and service tax fund created pursuant to section five-b, article thirteen, chapter eight of this code. The alternative municipal sales and service tax moneys shall be credited to the subaccount of each particular municipality levying an alternative municipal sales and service tax being administered under this section. The credit shall be made to the subaccount of the municipality in which the taxable sales were made and services rendered as shown by the records of the tax commissioner and certified by him or her monthly to the state treasurer, namely, the location of each place of business of every vendor collecting and paying the tax to the tax commissioner without regard to the place of possible use by the purchaser.
(d) (1) As soon as practicable after the alternative municipal sales and service tax moneys have been paid into the state treasury in any month for the preceding reporting period, the municipality may issue a requisition to the auditor requesting issuance of a state warrant for the proper amount in favor of the municipality entitled to the monthly remittance of its alternative municipal sales and service tax moneys.
(2) Upon receipt of the requisition, the auditor shall issue his or her warrant on the state treasurer for the funds requested and the state treasurer shall pay the warrant out of the subaccount.
(3) If errors are made in any payment, or adjustments are otherwise necessary, whether attributable to refunds to taxpayers or to some other fact, the errors shall be corrected and adjustments made in the payments for the next six months as follows: One sixth of the total adjustment shall be included in the payments for the next six months. In addition, the payment shall include a refund of amounts erroneously not paid to the municipality and not previously remitted during the three years preceding the discovery of the error.
(4) A correction and adjustment in payments described in this subsection due to the misallocation of funds by the vendor shall be made within three years of the date of the payment error.
(e) Notwithstanding any other provision of this code to the contrary, the tax commissioner shall deduct and retain for the benefit of his or her office for expenditure pursuant to appropriation of the Legislature from each payment into the state treasury, as provided in subsection (c) of this section, one percent thereof as a commission to compensate his or her office for the discharge of the duties described in this section.


Note: The purpose of this bill is to permit municipalities to impose an alternative 1% municipal sales and service tax in the municipality in lieu of imposing the business and occupation tax currently permitted by law.

§8-13-5b and §11-10-11b are new; therefore, strike-throughs and underscoring have been omitted.