SB 7 — Returning refundable exemption for road construction contractors to State Road Fund

WEST VIRGINIA LEGISLATURE REGULAR SESSION IntroducedCommittee FISCALSubstitute for Senate Bill 7 NOTE By Senators Clements [Introducedand JanuarySmith 7,[Originating 2023;in the Committee on Transportation and Infrastructure;

referredreported on January 17, 2023] CS for SB 7 A BILL to amend and reenact §11-15-9 of the CommitteeCode onof TransportationWest Virginia, 1931, as amended, relating to the consumers sales and Infrastructure;service tax and returning the refundable exemption for sales of construction and maintenance materials acquired by a second party for use in Division of Highways projects;

andspecifying thenduties toof theTax CommitteeCommissioner on Finance] Intr SB 7 2023R1597 A BILL to amend and reenactDivision §11-15-9 of theHighways; Code of West Virginia, 1931, as amended, relating to returning the refundable exemption for road construction contractors to the State Road Fund;

transferringspecifying revenuesprocedure collectedof from the state’sexemption; consumers sales and service tax and the state’s use tax to the State Road Fund;

and specifyingsetting theforth effectivecalculation date.of reimbursement.

Provided, That the law of the 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 1 CS for SB 7 work;

Intr SB 7 2023R1597 (4) Sales of vehicles which are titled by the Division of Motor Vehicles and which are subject to the tax imposed by §11-15-3c of this code or like tax;

(E) 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, 2 CS for SB 7 which is organized and operated exclusively for charitable purposes and has as its primary Intr SB 7 2023R1597 purpose the nonsectarian character development and citizenship training of its members;

(i) The term "support"“support” includes, but is not limited to:

(ii) The term "charitable“charitable contribution"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;

and (iii) The term "membership“membership fee"fee” does not include any amounts paid for tangible personal property or specific services rendered to members by the corporation or organization;

3 CS for SB 7 (G) The exemption allowed by this subdivision does not apply to sales of gasoline or Intr SB 7 2023R1597 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.

(9) Sales of tangible personal property to a person for the purpose of resale in the form of 4 CS for SB 7 tangible personal property:

Provided, That sales of gasoline and special fuel by distributors and Intr SB 7 2023R1597 importers is taxable except when the sale is to another distributor for resale:

(12) Sales of radio and television broadcasting time, preprinted advertising circulars, and newspapernewspaper, and outdoor advertising space for the advertisement of goods or services;

For purposes of this subdivision, the term "casual“casual and occasional sales not conducted in a repeated manner or in the ordinary course of repetitive and successive transactions of like character"character” means sales of tangible personal property or services at fundraisers sponsored by a corporation or organization which is exempt, under subdivision (6) of this subsection, from payment of the tax imposed by this article on its purchases when the fundraisers are of limited duration and are held no more than six times during any 12- month period and "limited“limited duration"duration” means no more than 84 consecutive hours:

Provided, That sales for volunteer fire departments and volunteer school support groups, with duration of events being no more than 84 consecutive hours at a time, which are held no more than 18 times in a 12- month period for the purposes of this subdivision are considered "casual“casual and occasional sales not conducted in a repeated manner or in the ordinary course of repetitive and successive 5 CS for SB 7 transactions of a like character";character”;

Intr SB 7 2023R1597 (15) Sales of property or services to a school which has approval from the Higher Education Policy Commission or the Council for Community and Technical College Education 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:

(19) Any sales of tangible personal property or services purchased and lawfully paid for with food stamps pursuant to the federal food stamp program codified in 7 U.U.S.C.

S.§ 2011, et seq., as amended, or with drafts issued through the West Virginia special supplement food program for women, infants, and children codified in 42 U.S.C.

C.

§2011, et seq., as amended, or with drafts issued through the West Virginia special supplement food program for women, infants, and children codified in 42 U.

S.

C.

Provided, That, for the purposes of this subdivision, "electronic“electronic data processing services"services” means:

6 CS for SB 7 (A) The processing of another’s data, including all processes incident to processing of data Intr SB 7 2023R1597 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;

(B) Food purchased or sold by a public or private college or university or by a student 7 CS for SB 7 organization officially recognized by the college or university to students enrolled at the college or Intr SB 7 2023R1597 university when the 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;

8 CS for SB 7 (25) Sales of food by little leagues, midget football leagues, youth football or soccer Intr SB 7 2023R1597 leagues, band boosters, or other school or athletic booster organizations supporting activities for grades kindergarten through 12 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:

(32) Sales of motion picture films to motion picture exhibitors for exhibition if the sale of tickets or the charge for 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 the machines to the public for a charge upon which the tax 9 CS for SB 7 imposed by this article is remitted to the Tax Commissioner:

Provided, That the exemption Intr SB 7 2023R1597 provided in this subdivision may be claimed by presenting to the seller a properly executed exemption certificate;

(37) Commissions received by a manufacturer'smanufacturer’s representative;

and 10 CS for SB 7 (C) The transfer of the results of the service activities is an indispensable part of the overall Intr SB 7 2023R1597 service.

For the purpose of this subdivision, the term "value-added“value-added product"product” means the following products derived from processing a raw agricultural product, whether for human consumption or for other use.

11 CS for SB 7 (40) Sales of music instructional services by a music teacher and artistic services or artistic Intr SB 7 2023R1597 performances of an entertainer or performing artist pursuant to a contract with the owner or operator of a retail establishment, restaurant, inn, bar, tavern, sports or other entertainment facility, or any other business location in this state in which the public or a limited portion of the public may assemble to hear or see musical works or other artistic works be performed for the enjoyment of the members of the public there assembled when the amount paid by the owner or operator for the artistic service or artistic performance does not exceed $3,000:

(41) Charges to a member by a membership association or organization which is exempt from paying federal income taxes under Section 501(c)(3) or (c)(6) of the Internal Revenue Code of 1986, as amended, for membership in the association or organization, including charges to 12 CS for SB 7 members for newsletters prepared by the association or organization for distribution primarily to its Intr SB 7 2023R1597 members, charges to members for continuing education seminars, workshops, conventions, lectures, or courses put on or sponsored by the association or organization, including charges for related course materials prepared by the association or organization or by the speaker or speakers for use during the continuing education seminar, workshop, convention, lecture, or course, but not including any separate charge or separately stated charge for meals, lodging, entertainment, or transportation taxable under this article:

(46) The service of providing technical evaluations for compliance with federal and state environmental standards provided by environmental and industrial consultants who have formal certification through the West Virginia Department of Environmental Protection or the West 13 CS for SB 7 Virginia Bureau for Public Health or both.

For purposes of this exemption, the service of providing Intr SB 7 2023R1597 technical evaluations for compliance with federal and state environmental standards includes those costs of tangible personal property directly used in providing such services that are separately billed to the purchaser of such services and on which the tax imposed by this article has previously been paid by the service provider;

14 CS for SB 7 (1) Sales of property or services to bona fide charitable organizations who make no charge Intr SB 7 2023R1597 whatsoever for the services they render:

(6) Sales of construction and maintenance materials acquired by a second party for use in the construction or maintenance of a Division of Highways road, highway, or bridge project:

15 CS for SB 7 Provided, That in lieu of any refund or credit to the person that paid the tax imposed by this article, the Tax Commissioner shall pay to the Division of Highways, for deposit into the State Road Fund, reimbursement for the tax in the amount estimated under the provisions of this subdivision: