Municipal sales tax
Since the passage of Ordinance 248 by Elkins City Council in December 2017 operators of local businesses, city officials and state officials have been preparing for the imposition of the 1 percent municipal sales tax set to begin on July 1. Affected business owners have reportedly been receiving letters from the WV Tax Department outlining information and instruction on the tax. However, the City Treasurer’s office has also received multiple questions about who collects and remits the tax and for what.
First, consider if you are operating a business or offering a service in West Virginia and are currently subject to the 6 percent statewide sales tax. If the answer is no, then go no further. A municipal sales tax cannot be applied to any good or service that isn’t also subject to the state sales tax. If the answer is yes, the next question should be, where is your business located or where is your service provided? All vendors or sellers inside city limits will be required to collect the WV sales tax plus the municipal sales tax, effective July 1, even if the item purchased is taken for use outside the municipality. A notable and common exception to this is if you ship or deliver an item to a customer outside the municipal boundary into either an unincorporated area or into a municipality that does not impose their own municipal sales tax.
However, this does not exclude vendors located outside the municipal boundaries. Those who have a subsidiary location within; have a representative or sales person conducting business inside city limits; ship or deliver tangible goods to locations inside the municipality; or perform a taxable service in Elkins corporate limits, are also subject to the municipal sales tax, regardless of where they originate from.
Some other common exemptions from municipal sales tax include customers who provide a fully completed Certificate of Exemption for state sales tax; direct-to-home satellite or cable services; and federal, state and local agencies who are exempt from sales tax.
A final and important point I’d like to highlight is that the sales tax is entirely separate from the Business and Occupation tax that some business owners or service providers may also report and pay to the city of Elkins. The B&O tax, with one exception, will remain unchanged in its rates and administration. The exception is, as you may remember, the elimination of the manufacturing B&O tax that will also occur on July 1 of this year. The city has fewer than 20 businesses paying this tax and will contact each one directly to be sure they are aware of and understand the upcoming change.
Although the city’s general fund will be the final depository for any municipal sales tax revenue collected, we are not the administrator or collector of this tax. Just like the WV sales tax program, the State Tax Department will have this responsibility. For business owners and service provides who are responsible for charging the municipal sales tax to the consumer, the process for reporting and remitting this revenue to the State Tax Department is identical to the procedure you follow now for the State sales tax, with a small amount of additional reporting.
If you have questions, please visit the WV Tax Department website at tax.wv.gov or call 304-558-3333.
— Judy is the Elkins city treasurer.