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ACTING DEPUTY TAX COMMISSIONER LYDIA S. MCKEE
W E S T V I R G I N I A
STATE TAX DEPARTMENT
W E S T V I R G I N I A
SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS A N N U A L M E E T I N G
CHARLESTON, WV JUNE 6, 2017
This presentation is meant to be a source of generalinformation and not as a substitute for tax laws, rules, orregulations and may not be relied upon as legal or taxadvice or to support specific instances not addressed.
The material presented may contain simplifiedexplanations of potentially complex legal and tax conceptsso as to apply generally across broad areas of tax practice,both legal and accounting, and is intended for generaloverview and application.
Individual comments by presenters are meant to beillustrative in nature and are not intended as official TaxDepartment policy.
Before we get started
WEST VIRGINIA STATE TAX DEPARTMENT
WEST VIRGINIA STATE TAX DEPARTMENT
Changes in Tax’s Website.
You’ll find these changes at the Tax Department’s website
www.tax.wv.gov
The Department's’ website continues to be a work in progress.
• Join the Tax Commissioner’s Office Mailing List
• Report Tax Fraud Link
• Municipal Sales and Use Tax
• Municipal Sales and Use Tax Guidelines
• Property Tax
• Business Registration
Click here to “Join the
Tax Commissioner’s
Office Mailing List”.
WEST VIRGINIA STATE TAX DEPARTMENT
WEST VIRGINIA STATE TAX DEPARTMENT
Subscribe to Current Developments and Recent Website Updates
WEST VIRGINIA STATE TAX DEPARTMENT
Mailing List Subscription Confirmation
WEST VIRGINIA STATE TAX DEPARTMENT
Report Tax Fraud
Tax
mobile
version
made
simple.
WEST VIRGINIA STATE TAX DEPARTMENT
WEST VIRGINIA STATE TAX DEPARTMENT
WEST VIRGINIA STATE TAX DEPARTMENT
WEST VIRGINIA STATE TAX DEPARTMENT
Information
collected here
will be used for
purposes of a
fraud
investigation.
WEST VIRGINIA STATE TAX DEPARTMENT
Municipal Sales and Use Taxhttp://tax.wv.gov/Business/SalesAndUseTax/MunicipalSalesAndUseTax/Pages/MunicipalSalesAndUseTax.aspx
WEST VIRGINIA STATE TAX DEPARTMENT
Municipal Sales and Use Tax Guidelineshttp://tax.wv.gov/Business/SalesAndUseTax/MunicipalSalesAndUseTax/Pages/MunicipalSalesAndUseTaxGuidelines.aspx
WEST VIRGINIA STATE TAX DEPARTMENT
Property Taxhttp://tax.wv.gov/Business/PropertyTax/Pages/PropertyTax.aspx
WEST VIRGINIA STATE TAX DEPARTMENT
Business Registrationhttp://tax.wv.gov/Business/BusinessRegistration/Pages/BusinessRegistration.aspx
WEST VIRGINIA STATE TAX DEPARTMENT
Enacted
Legislation:
• House Bills
• Senate Bills
• Special Session Legislation
HB 2555 – Tax Credits -- Removes requirement that apprenticeship programs
be jointly administered by labor and management. Credit is allowed for wages
paid to apprentices in the construction trades who are registered with the
United States Department of Labor, Office of Apprenticeship, West Virginia
State Office. Passed March 14, 2017; effective from passage.
HB 2590 – WVCNIT -- Updates the meaning of “federal taxable income” for
corporation net income tax purposes. Passed March 14, 2017; effective from
passage; retroactive to January 1, 2017.
HB 2594 – WVPIT -- Updates meaning of “federal adjusted gross income” for
personal income tax purposes. Passed March 14, 2017; effective from
passage; retroactive to January 1, 2017.
HB 2709 – Special District Excise Tax – Authorizes the City of South
Charleston to impose a special district excise tax. Bill takes effect July 5, 2017.
House Bills
WEST VIRGINIA STATE TAX DEPARTMENT
HB 2734 – Property Tax – Provides a special method for collection and
remittance of property tax on heavy equipment rented by certain heavy
equipment rental dealers. Bill takes effect July 5, 2017.
HB 2962 – Administration – Allows Tax Commissioner to perform background
investigations of current employees and contractors. Bill takes effect July 7,
2017.
HB 2963 – Estate Tax – Eliminates provision that allows the domiciliary
personal representative of a nonresident decedent to request a certificate of
lien waiver from the Tax Commissioner. Bill takes effect July 4, 2017.
HB 2967 – Estate and Trusts – Bill transfers the duty to train fiduciary
supervisors who are not attorneys from the Tax Commissioner to the State
Auditor. The bill also waives surety requirements for administrators of estates
where a grantee is sole beneficiary or sole distributee of the decedent; and
makes certain other changes to bond and surety requirements. Bill takes effect
July 7, 2017.
WEST VIRGINIA STATE TAX DEPARTMENT
House Bills
SB 433 – Excise Tax -- Permits county commissioners to increase county
excise tax imposed on privilege of transferring real property to $1.65 per $500
of consideration. Bill takes effect July 6, 2017.
SB 486 – Health Care Provider Tax -- Increases rates of health care provider
taxes paid by certain acute care hospitals to 3.25% beginning July 1, 2017.
SB 533 – Excise Tax -- W. Va. Code § 60-3-9d imposes a 5% excise tax on
both wholesale sales and retail sales of wine and intoxicating liquors in sealed
containers outside of a municipality. W. Va. Code § 8-13-7 allows municipalities
to impose a 5% excise tax on both wholesale and retail sales of wine and
intoxicating liquors within a municipality. SB 533 amends these code section to
essentially provide that the tax does not apply at the wholesale level when the
retail sale is subject to the 5% tax. Bill takes effect July 6, 2017.
SB 588 – Property Tax -- Bill relates to the reproduction, distribution and sale of
property tax maps. Bill takes effect July 6, 2017.
Senate Bills
WEST VIRGINIA STATE TAX DEPARTMENT
HB 102 – State Road Fund -- This bill would increase funding for the State
Road Fund by increasing Division of Motor Vehicles administrative fees and
motor fuel excise taxes. See also, HB 108 and SB 1002 and SB 1006.
HB 103 – Parkways Authority – This bill would allow the Parkways Authority to
issue revenue bonds and refunding bonds for the purpose of financing parkway
projects within the state constructed or improved by the Department of
Transportation or the Authority. See also, SB 1003.
HB 104 – Relating generally to taxation. See also, SB 1004.
HB 106 – Furlough of Public Employees – This bill, which passed the House of
Delegates and is in the Senate authorizes the provision of essential
government services after June 30, 2017, in the event there is not budget on
July 1, 2017. See also, SB 1005.
Special Session Legislation
WEST VIRGINIA STATE TAX DEPARTMENT
HB 107 – Tax Reform Act of 2017. See also, HB 104 and SB 1004 and SB
1007.
HB 108 – State Road Fund – Increasing funding for State Road Fund.
HB 109 – Sales Tax – Making medical cannabis subject to consumers sales
and service tax.
HB110 – Relating to taxation.
HB 111 – Tax Procedure and Administration – This bill amends W. Va. Code §
11-10-12 and § 38-10C-2 relating to liens for taxes other than ad valorem
property taxes. It gives the Tax Commissioner greater flexibility to withdraw
liens under certain circumstances and requires that liens be released after they
are no longer enforceable. During the regular session, SB 622 was passed
doing the same thing. SB 622 was vetoed due to a defective title. See also, SB
1009.
HB 115 – Budget Bill. See also SB 1013.
Special Session Legislation
WEST VIRGINIA STATE TAX DEPARTMENT
WEST VIRGINIA STATE TAX DEPARTMENT
LegislationEmployer withholding tax annual return. – HB 3091 (2017) would have changed the
due date for employers to file their annual reconciliation and withholding statements with
the Tax Commissioner to January 31, which date is consistent with the date by which
employers must file their annual employer withholding reconciliation statements with the
Internal Revenue Service; and to require more employers to file W-2 information
electronically with the Tax Commissioner. Additionally, certain obsolete language would
be deleted from the current law. We will ask for this legislation to be considered in 2018.
Federal partnership audit regime. The Bipartisan BBA of 2015 (the “BBA”) established
new rules for federal partnership audits and assessment of tax (the “New Rules”). The
New Rules change the way partnerships are audited for federal tax purposes and, for the
first time, make a partnership liable for tax resulting from an IRS adjustment. The New
Rules are generally effective for partnership returns filed for tax years beginning after
December 31, 2017. However, partnerships may elect (at such time and in such form and
manner as Secretary may prescribe) to apply the New Rules to returns filed for tax years
beginning after November 2, 2015.
WEST VIRGINIA STATE TAX DEPARTMENT
The New Rules necessitate that all states that impose an income tax on partners and members of other pass-through entities amend their income tax laws to address state issue raised by enactment of the new Federal Partnership Audit Regime. For example:
Under the New Rules, the partnership may be liable for payment of the additional federal income taxes. Will West Virginia similarly amend its law?
Under the New Rules, the partnership may push out to its partners payment of the additional federal income tax. Will West Virginia similarly amend it law and/or will West Virginia allow the partnership to pay the additional WVPIT even though the partnership has elected to push payment of the federal income tax out to its partners?
Adding to state complexity is the fact that while both resident and nonresident partners pay WVPIT on income sourced to West Virginia, resident partners are allowed credit against their WVPIT liabilities for income taxes they pay to another state.
The Multistate Tax Commission has formed a workgroup made up of representatives from both the public and private sectors to draft model legislation for states to consider.
WEST VIRGINIA STATE TAX DEPARTMENT
West Virginia
State Tax Budget
Questions
➢ Acting Deputy Commissioner Lydia S. McKee
➢ Legal Director and General Counsel Mark S. Morton
➢ Auditing Director Dana K. Angell
➢ Revenue Division Assistant Director Kym D. Lowers
➢ Tax Account Administration Director Matthew R. Irby
➢ Taxpayer Services Director Shella R. Hogg
WEST VIRGINIA STATE TAX DEPARTMENT
1. Please discuss the impact of recent budget cuts on the Department's ability to
provide taxpayer service, conduct audits, etc.
Lydia McKee
Budget cuts continue to restrict the ability of the State Tax Department to effectively carry
out its mission. We have too few taxpayer service representatives, field auditors and
compliance agents. We have approximately 88 of 433 positions vacant, or 20.36% of our
authorized staffing. Finding qualified candidates is a challenge but even more of a
challenge is finding candidates that will come for our starting salaries. An entrance level
field auditor position, which requires a college degree in accounting has a starting salary
of $29,400. Because we cannot give pay raises, it is difficult to keep good employees.
WEST VIRGINIA STATE TAX DEPARTMENT
2. What, if any, taxpayer service does the Department foresee being reduced due to
the State's budget woes?
Lydia McKee
We have a number of taxpayer service representative vacancies. This affects the number
of phone calls we can handle including answering the tax practitioner hotline. Our new
employees have a sharp learning curve because of the numerous and diverse duties of
the State Tax Department.
WEST VIRGINIA STATE TAX DEPARTMENT
3. Is the tax practitioner hotline expected to be kept intact? We appreciate the
hotline and have had great success resolving issues quickly using it.
Shella Hogg
For now, we intend to keep the tax practitioner hotline. However, keeping the hotline
depends upon our having a sufficient number of qualified taxpayer service representative
to answer the hotline. Due to budget constraints, we may be forced in the future to
reduce the hours during which tax practitioner hotline calls will be answered, or possibly
even ending the tax practitioner hotline.
WEST VIRGINIA STATE TAX DEPARTMENT
4. Will the state continue to follow the practice of the Tax Practitioner Hotline only
speaking to the paid preparer listed on the return?
Shella Hogg
Protecting the confidentiality of taxpayer and tax return information is a daily priority item
for employees of the State Tax Department. For this reason, the practice will continue.
WEST VIRGINIA STATE TAX DEPARTMENT
5. What is the average time to process individual and business refunds? If any
delays are they associated with budgetary constraints?
Matthew Irby
Nearly 85% of personal income tax refunds are paid within 3 weeks after the return is
filed. The remaining 15% are generally paid (or more information is requested) within 8
to 10 weeks after the return is filed.
Business tax refunds generally take anywhere between 3 to 6 months to process after
the return is filed due to the complexity of the return.
WEST VIRGINIA STATE TAX DEPARTMENT
6. Please address the challenges and the Department's success in addressing
taxpayer identity theft.
Matthew Irby
The Department has invested significant resources in development of a fraud
management system within the integrated tax system. This fraud management system is
managed by a subunit of our personal income tax unit who have had specific training in
the areas of fraud detection.
Many of these upgrades have led to a small delay in the processing of refunds while we
run data analytics on return filings to ensure we are not paying refunds to those
attempting to commit fraud. Additionally, we have requested more personal information
from taxpayers.
Finally, we have improved our data matching on W-2 information (which will be
addressed more later).
WEST VIRGINIA STATE TAX DEPARTMENT
7. The IRS is moving to private collection efforts in some cases. Is the State Tax
Dept. thinking about taking that route as well?
Lydia McKee
Before going this route, the Tax Commissioner would like to have a statutory amendment
specifically allowing us to go in this direction.
WEST VIRGINIA STATE TAX DEPARTMENT
8. What does the Dept. anticipate being the focus (foci) of the Dept.'s efforts on
audit/assessment for 2017?
Dana Angell
The Tax Department’s Auditing Division continues to monitor for compliance with
municipal sales and use tax ordinances to ensure that vendors are properly collecting
and reporting municipal tax. Every State consumer sales and use tax audit includes a
municipal sales and use tax audit. The Auditing Division reviews the combined sales and
use tax returns for accuracy in reporting; there are still a few taxpayers that are not in full
compliance. Tax generally reviews prior audit results to determine the issues to focus on
when selecting future audits. The Auditing Division also has several vacant tax examiner
positions. This, coupled with reduction of Tax’s travel budget is affecting the auditing
program.
WEST VIRGINIA STATE TAX DEPARTMENT
9. There seems to be an increasing number of individuals receiving "summary of
changes" tax notices for their WV Personal Income Tax returns - the changes are
for withholding tax that the taxpayer is not being given credit for by the WV State
Tax Department. The taxpayers are asked to provide a copy of the W-2. Is this a
trend you are aware of? Is the root of the problem at the employer level, with the
employer not filing their WV/IT-103 and W-2s timely? One case I saw recently
involved WV withholding from WV Lottery winnings.
Matthew Irby
The department has increased its efforts to match W-2 information as a part of our fraud
management plan. However, there recently was an issue where we were unable to
properly match all withholding information, and this issue was not discovered until
recently. Unfortunately, this led to increased requests to provide backup documentation.
This issue has been resolved and those requests should now come back down to normal
levels.
WEST VIRGINIA STATE TAX DEPARTMENT
10. Business & Occupation taxes constitute the primary funding source for many
of our municipalities, yet regulations have not been updated since the repeal of
state-wide B&O. Since that time, there have been fundamental changes in the way
organizations transact business. Will the Department consider
revising/modernizing new regulations?
Lydia McKee
Like many or our rules, the municipal business and occupation tax rules were
promulgated many years ago and probably need some technical changes. However,
given the State Tax Department’s workload and the limitations on resources, this is not a
high priority item for the Tax Commissioner.
WEST VIRGINIA STATE TAX DEPARTMENT
11. During the 2017 Legislative session there was considerable discussion
regarding elimination of personal property tax. What would be required to make
such a change? Constitutional amendment?
Mark Morton
Prior to the 2017 Legislative session there was considerable discussion about eliminating
the personal property tax on some or all tangible personal property. To exempt some or
all tangible personal property from ad valorem property taxation would take a
constitutional amendment. County commissions and municipalities want to be made
whole in the event some or all tangible personal property becomes exempt from tax.
Depending upon the scope of the exemption, this can be expensive. In some counties,
the assessed value of tangible personal property is approaching 50% of the total
assessed value of all taxable property in the county. If the local levying bodies are to be
held harmless by the State, how will this expense be funded? Another approach, which
would not require a constitutional amendment, would be to allow tangible personal
property taxes to be claimed as a credit against other taxes collected by the State. Two
problems with this approach are: First how will the State pay for this, and second, unless
the business is subject to State severances taxes or business and occupations taxes, the
business may not pay sufficient state taxes to be able to utilize the credits. During the
recent discussion about tax reform, exempting tangible personal property from taxation
has not been part of the discussion.
WEST VIRGINIA STATE TAX DEPARTMENT
12. Is it safe to assume that WV adopts the Federal due date for Income Tax
returns? Such as the 2016 federal returns that were due 4/18/2017.
The West Virginia Code established the due dates of the various tax returns. Under the
Code the personal income tax returns and estimated tax payments were due Saturday,
April 15, 2017. However, the Code also provides that when a return or payment is due on
a Saturday, Sunday, or legal holiday in this State, the return or payment is timely if filed or
paid on the next day that is not a Saturday, Sunday or legal holiday in this State. Because
the West Virginia personal income tax liability computation begins with federal adjusted
gross income and that is determined when the federal return is prepared, the Tax
Commission granted an extension of time to file and pay until the due date of the federal
return, both the federal 1040 and the federal declaration of estimated tax.
WEST VIRGINIA STATE TAX DEPARTMENT
13. The WV/IT-103 form shows a due date of February 28th. Please confirm that
this is the due date for next year's WV/IT-103 form and W-2s (for the 2017 tax year).
The Social Security Administration advanced the due date for W-3/W-2 forms by
one month, to January 31, starting with the 2016 tax year forms. Are there plans
for WV to adopt the SSA's January 31st due date for employers to submit their
state copies of the W-2s?
Lydia McKee
A bill was introduced during the 2017 regular session of the Legislature to move the due
date to January 31st. While this bill passed the House, it died in the Senate. For 2018,
the return will still be due on February 28, 2018. We intend to ask for this bill to be
reintroduced during the 2018 regular session of the Legislature.
WEST VIRGINIA STATE TAX DEPARTMENT
14. Two individual taxpayers have overpayments applied to the next tax year (and
perhaps make one or more estimated tax payments individually) - The two
taxpayers get married before the end of the next tax year and file a joint return.
What is the best way to ensure that the overpayments and estimated tax payments
get properly credited by the WV State Tax department to the joint return? Or
should we expect a tax notice?
Matthew Irby
When we process a joint return and systematically validate the estimated payments
claimed, the process only looks at the primary taxpayer because that is the account
where the return is posted. We are investigating ways to pull payments directly from a
spouse (or on a deceased taxpayer that is no longer a part of the return) where payments
may have been made.
WEST VIRGINIA STATE TAX DEPARTMENT
15. I've been wondering when the State Tax Department is going to update the
NIPA-2 form. It appears that charities aren't providing their NIPA Project number
on the NIPA-1 form because the state removed the line. However, the NIPA-2 asks
for the project number. They should either remove the line on the NIPA-2 asking
for the project number, or add back the line on the initial NIPA-1 form. Also, it
would be nice if they made this form a fill-in form.
Matthew Irby
It is anticipated that there will be changes to the NIPA form in the upcoming tax year. We
are looking at better ways to validate the information provided by the taxpayer.
Inconsistencies in the way the information is reported will also be examined.
WEST VIRGINIA STATE TAX DEPARTMENT
16. Each year, our clients who claim the apprenticeship credit receive notices that
the form required to receive the credit was not filed with the return, and the state
initially disallows the credit. However, our software will not allow us to claim the
credit and electronically file the return without the form being attached in a PDF
format, which we do. Why is this PDF form that has been attached not reviewed by
the state when return is e-filed? This causes us to responded to a notice and send
the information a second time. Is there a plan to address this issue, or something
we as tax return preparers should do differently?
Matthew Irby
We will work with software vendors to ensure we are receiving all attachments made on
those submissions. Without looking at a particular instance, we cannot say whether we
received the attachment through the MEF system.
17. There is a lot of confusion about what forms need attached to claim credits,
such as Neighborhood Investment Tax Credit, Senior Citizen Property Tax Credit,
Homestead Property Tax Credit, credit for taxes paid to other states (composite
returns), etc.
Matthew Irby
A compiled list of all forms and documentation for each credit will soon be available on
our website at: www.tax.wv.gov
WEST VIRGINIA STATE TAX DEPARTMENT
WEST VIRGINIA STATE TAX DEPARTMENT
Credit for Income Tax Paid to another State (Schedule
E)
(11-21-20)
• Separate Schedule E must be completed for each state
for which credit is claimed.
• Other states’ returns may be requested at the auditor’s
discretion
Non-Family Adoption Credit (WV/NFA-1)
(11-21-10a)
• Court order for the adoption may be requested at the
auditor’s discretion
General Economic Opportunity Tax Credit (WV/EOTC-
PIT) (11-13Q)
• WV/EOTC-1 completed by the pass-through entity
providing the Personal Income Tax credit.
• Copy of Federal Form 1120S, Schedule K-1
Strategic Research and Development Tax Credit
(WV/SRDTC-1) (11-13R)
Schedule only
WV Environmental Agricultural Equipment Credit
(WV/AG-1) (11-13K)
• Proof of purchase and installation
• Written certification from the appropriate office (see AG-1
instructions)
WV Military Incentive Credit (SCHEDULE J)
(11-21-42)
• This tax credit can ONLY be taken by employing
business or passed through to the partners.
Neighborhood Investment Program Credit (NIPA-2)
(11-13J)
• NIPA-1 certificates and NIPA-2 schedule may be
requested at the auditor’s discretion
Historic Rehabilitated Buildings Investment Credit
(RBIC)
(11-21-8A)
• Final National Park Service certification (NPS Form 10-
168c) is required.
Qualified Rehabilitated Buildings Investment Credit
(RBIC-A) (11-21-8g)
• Final West Virginia Department of Culture and History
certification (Form 10-168c)
• The residential certified historic structure must be
classified as class 2 no later than July 1st of the following
year in which the rehabilitation expenses are incurred.
WV Film Industry Investment Tax Credit (WV/FIIA-TCS)
(11-13X)
• Schedule and certificate must be attached
Apprenticeship Training Tax Credit (WV/ATTC-1)
(11-13W-1)
• Schedule only
Solar Energy Tax Credit (WV/SETC)
(11-13Z)
• Receipts for solar equipment and installation must be
included
• If any unused credit remains after July 1, 2014, the
amount thereof is forfeited.
• No taxpayer shall take a credit pursuant to this article for
a solar energy system installed after July 1, 2013.
Commercial Patent Incentive Tax Credit (CPITC-1)
(11-13AA)
• Schedule only
Concealed Carry Gun Permit Training Credit (CCGP-1)
(61-7-4r)
• Receipts showing date and dollar amount paid for
training class/application fee
• Dates for application and training classes
• Certificates showing successful completion of training
Alternative-Fuel Tax Credit (AFTC-1)
(11-6D)
The following information must also be included
•Purchase agreement / bill of sale must be attached
•Vehicle Registration card
Other Credits
Senior Citizen’s Tax Credit (SCTC-1)
(11-21-21)
•Schedule only
Homestead Excess Property Tax Credit (HEPTC-1)
(11-21-23)
•Schedule must include non-taxable social security and
some other types of income not included in FAGI (see
schedule HEPTC-1)
• Property Tax receipts or 1098’s may be
requested at the auditor’s discretion
Family Tax Credit (FTC-1)
(11-21-22)
•Schedule only
All schedules can be located on WV website
(except SCTC-1 which is mailed to the taxpayer)
www.tax.wv.gov
WEST VIRGINIA STATE TAX DEPARTMENT
18. Have you ever considered moving the filing and paying of the WV State
Unemployment taxes to WV MyTaxes? These can be filed paid online through
another website, but other states have all state tax payments through a single
website.
Matthew Irby
Unemployment taxes are paid to Workforce West Virginia and not to the State Tax
Department. Payment of unemployment taxes cannot be integrated into the MyTaxes
site.
WEST VIRGINIA STATE TAX DEPARTMENT
19. Have you considered allowing individuals to set up "accounts" with WV
MyTaxes, so they have access to the history of their tax payments in one place like
businesses do? Currently estimated individual tax payments can be made through
WV MyTaxes without logging in, and they can be looked up later one by one using
the confirmation number. It would be helpful to be able to log in and run a report
showing all of the estimated tax payments for the year.
Matthew Irby
The Department is currently considering allowing log on functionality to personal income
tax. There are infrastructure and security issues that have to be considered, along with
determining the amount and type of information available.
WEST VIRGINIA STATE TAX DEPARTMENT
WEST VIRGINIA STATE TAX DEPARTMENT
20. Does the state have any plans to provide a consolidated tax form to software
providers instead of requiring excel attachments for the WV UB-4CR? The excel
file is cumbersome and adds unnecessary preparation time.
Lydia McKee
We understand that the UB-4CR is difficult to complete within the excel file. When the
return components for the combined report were designed, the most consistent way to
get the information reported was through the excel form. However, after a few years of
experience, we are now considering designing a UB-4CR as a part of the MeF return
schema for software providers.
WEST VIRGINIA STATE TAX DEPARTMENT
21. With all the pipelines being constructed in WV a common financing structure is
for the pipeline to charge a reservation fee to pay for their pipeline and then also
charge an additional fee for transporting natural gas based on volume. Are both of
these charges by the pipelines deductible from the sales price of natural gas in
addition to the natural gas producer's cost of transportation from the well head to
the point of sale?
Lydia McKee
Transportation costs are deductible to arrive at the well-mouth value of the gas on which
severance tax is imposed. Generally, producers may choose to take either actual
transportation costs or fifteen percent of the sales price of the natural gas as a deduction
to arrive at the well mount value of the gas. (WV CSR §110-13A-4.8)
If a producer sells natural gas to a pipeline, they may deduct the cost of transportation to
the point of sale and the transportation costs charged by the pipeline, including the
reservation fee.
WEST VIRGINIA STATE TAX DEPARTMENT
22. Is a separate business registration required by oil and gas producers for each
separate well owned within WV?
Kym Lowers
The Tax Commissioner has changed Department policy. On a going forward basis, a
separate business registration certificate is not required for each oil well and each gas
well.
WEST VIRGINIA STATE TAX DEPARTMENT
23. Will the property tax division accept actual operating costs for horizontal wells
instead of a formula amount for property tax valuation?
Lydia McKee
No. The legislative rule for determining the appraised value of producing oil and gas wells
requires the State Tax Department to periodically survey producers of oil and gas to
determine their operating expenses. The current survey is to be completed and returned
to the Department by June 15, 2017. At the end of June, tentative variables for valuing
different types of natural resource properties will be published in the State Register for
public comment.
WEST VIRGINIA STATE TAX DEPARTMENT
24. As of July 1, 2017, there are 38 WV Cities imposing a 1% Municipal Sales Tax -
is there a map, or list of zip codes available that define these City Limits to assist
businesses with identifying when their sales are within one of these Cities and
subject to Municipal Sales Tax?
Matthew Irby
The State Tax Department’s website includes an excel spreadsheet listing the 9-digit zip
codes for all municipalities that currently impose a municipal sales and use tax. A
limitation is that neither the 5-digit zip codes nor the 9-digit zip codes respect geographic
boundaries. The Department would like to transition to an address-based system or a
GIS system. However, the Tax Department does not have the resources to do this and to
date municipalities have not been willing to pay for development of an address-based
system.
We are working on a few applications that may assist taxpayers in determining the sales
tax rates for locations within this state, but have no rollout date at this point due to lack of
resources.
Questions?Lydia S. McKee
Acting Deputy Tax Commissioner
tax.commissioner@wv.gov 304-558-0751
W E S T V I R G I N I A STATE TAX DEPARTMENT
W E S T V I R G I N I A
SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS A N N U A L M E E T I N G
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