W. Va. Code R. § 110-15-14a

Current through Register Vol. XLI, No. 24, June 14, 2024

Section 110-15-14a - Record Keeping of Transactions

14a.1. Every person doing business in the State of West Virginia or storing, using, or otherwise consuming tangible personal property purchased from a vendor, and every lessor and lessee of tangible personal property used in this State shall keep complete and accurate records as are necessary for the Tax Commissioner to determine the liability of each vendor or vendee for consumer sales and use tax purposes. Unless the Tax Commissioner authorizes, in writing, an alternative method of record keeping, these records shall show:

14a.1.1. Receipts from sales and leases of tangible personal property and from sales in this State of services, regardless of whether the vendor believes the receipts to be taxable or non-taxable;

14a.1.2. All deductions allowed by law and claimed in filing returns;

14a.1.3. Total purchase price of all tangible personal property purchased for sale, consumption or lease in this State, and the total price of all services purchased for sale or consumption in this State;

14a.1.4. All exemption certificates;

14a.1.5. All direct pay permit numbers and all material purchase certificate numbers;

14a.1.6. A true and complete inventory taken at least once a year.

14a.2. Each record shall consist of the normal books of account ordinarily maintained by the average prudent person engaged in the activity in question, including bills, receipts, invoices, cash register tapes, or other documents of original entry supporting the entries in the books of account, and all schedules or working papers used in connection with the preparation of tax returns.

14a.3. Each record may be microfilmed or microfiched, as long as the microfilm or microfiche records are authentic, accessible, and readable and the following requirements are fully satisfied:

14a.3.1. Each taxpayer shall provide transcriptions of any information concerning consumers sales or use tax liability on microfilm or microfiche which may be required to verify liability. The taxpayer shall also provide appropriate facilities for preservation of the microfilm or microfiche for the periods required.

14a.3.2. All microfilmed and microfiched data shall be indexed, cross-referenced and labeled to show beginning and ending alphabetical listing of documents, and beginning and ending numbers. All microfilm and microfiched data shall be systemically filed to permit reasonable access.

14a.3.3. Each taxpayer shall make available upon request of the Tax Commissioner or the Tax Commissioner's authorized agent, a reader-printer in good working order, at the examination site, for reading, locating and reproducing any record concerning consumers sales or use tax liability maintained on microfilm or microfiche.

14a.3.4. Each taxpayer shall set forth in writing the procedures governing the microfilm or microfiche system and the individual or individuals responsible for maintaining and operating the system.

14a.3.5. Each taxpayer shall maintain a complete microfilm or microfiche system and shall consistently use the system in the regular course of business.

14a.3.6. Each taxpayer shall establish appropriate documentation of procedures so that the original document can be followed through the microfilm or microfiche system.

14a.3.7. Each taxpayer shall establish internal procedures for microfilm or microfiche inspection and quality assurance.

14a.3.8. Each taxpayer shall be responsible for the effective identification, processing, storage, and preservation of microfilm or microfiche for a period of at least three (3) years from the last day of the calendar year during which the transaction occurred.

14a.3.9. Each taxpayer shall keep a record identifying the person or business entity that produced the microfilm or microfiche records.

14a.3.10. When displayed on a microfilm or microfiche reader or viewer, or reproduced on paper, the material shall exhibit a high degree of legibility. For this purpose, legibility is defined as the quality of a letter or numeral that enables the observer to identify it positively and quickly to the exclusion of all other letters or numerals being recognizable as words or complete numbers.

14a.3.11. All production of microfilm or microfiche and processing duplication, quality control, storage, identification, and inspection shall meet industry standards.

14a.4. An automated data processing tax accounting system may be used by the taxpayer to preserve consumers sales and use tax records required for the verification of tax liability. An automated data processing system shall include a method of producing legible records which will provide the necessary information for verifying tax liability. Each taxpayer maintaining records on an automated data processing system shall satisfy the following requirements:

14a.4.1. Automated data processing records shall provide an opportunity to trace any transaction back to the original source or forward to a final total. If detailed printouts are not made of transactions at the time they are processed, the systems shall have the ability to reconstruct these transactions.

14a.4.2. A general ledger, with source references, shall be written out to coincide with financial reports for tax reporting periods. When subsidiary ledgers are used to support the general ledger accounts, the subsidiary ledgers shall also be written out periodically.

14a.4.3. An audit trail shall be designed so that the details underlying the summary accounting data may be identified and made available to the Tax Commissioner or the Tax Commissioner's authorized agent. The system shall be designed so that supporting documents, such as sales invoices, purchase invoices, and credit memoranda are readily available.

14a.4.4. Each taxpayer shall make available a description of the automated data processing portion of the accounting system. The statements and illustrations as to the scope of operations shall be sufficiently detailed to indicate:

14a.4.4.1. The application being performed;

14a.4.4.2. The procedures employed in each application, such as flowcharts or block diagrams; and

14a.4.4.3. The controls used to ensure accurate and reliable processing. Important changes, together with their effective dates, shall be noted in order to preserve an accurate chronological record.

14a.4.5. Adequate record retention facilities shall be available for storing tapes and printouts, as well as all supporting documents as may be required by the consumers sales and use tax laws and these regulations.

14a.5. All records of a vendor or consumer pertaining to transactions involving consumers sales or use tax liability shall be preserved for a period of at least three years from the last day of the calendar year during which the transaction occurred.

14a.6. The foregoing records shall be available for and subject to inspection by the Tax Commissioner or the Tax Commissioner's authorized agents and employees, at all times during business hours of the day.

14a.7. If any taxpayer fails to substantially comply with the requirements of this regulation, the Tax Commissioner shall impose the penalty provided for in W. Va. Code ''11-10-18(c) or (d), as appropriate.

W. Va. Code R. § 110-15-14a