W. Va. Code R. § 110-15-8b

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

Section 110-15-8b - Nonresident Contractors - Registration, Bond, etc. Required

8b.1. Every person who engages in this State in any contracting business or contracting activity is required to obtain a business registration certificate from the Tax Commissioner prior to starting work in this State and to have a copy of that certificate available at every construction site in this State until the contractor's work at that site is completed. These requirements apply to resident as well as nonresident contractors. The business registration certificate is good for a one year period which begins July 1st and ends June 30th of the next calendar year. Civil penalties may be imposed under W. Va. Code ''11-12-1 et seq. and 11-10-1 et seq. for failure to satisfy these requirements. Additionally, criminal penalties may be imposed under W. Va. Code '11-9-1 et seq. for noncompliance.

8b.2. Beginning July 1, 1989, every nonresident contractor must also register with the Tax Commissioner under the consumers sales and use tax laws prior to engaging in the performance of a contract in this State. At the time of this registration, the contractor must satisfy one of the following requirements:

8b.2.1. Cash Bond - At the time each contract is registered, the nonresident contractor must deposit with the Tax Commissioner six percent (6%) of the gross value of the contract. The Tax Commissioner will deposit this money into the Contractor's Use Tax Fund where it will remain until after:

(1) the contract is completed,

(2) the amount of consumers sales and use taxes due this State with respect to such contract are ascertained, and

(3) the amount of tax due has been paid directly to the Tax Commissioner, or the contractor submits proof that the amount of tax due but not paid directly to the Tax Commissioner was paid to vendors required to collect this State's consumers sales or use taxes or to out-of-state vendors who voluntarily collect our use tax. Upon submission of proof satisfactory to the Tax Commissioner that these three (3) events have occurred, the Tax Commissioner will promptly refund the nonresident contractor's deposit with respect to such contract.

8b.2.2. Corporate Surety Bond. - In lieu of posting a cash bond for each contract, the nonresident contractor may provide a corporate surety bond for each contract which guarantees payment of consumers sales and use taxes due this State with respect to that contract. The corporate surety must be qualified to do business in this State; and the corporate surety bond must be approved by the Tax Commissioner as to form, sufficiency, value, amount, stability, and other features necessary to guarantee payment of the consumers sales and use taxes due this State with respect to such contract for contracting activity.

8b.2.2.1. Amount of Bond. - The amount of a corporate surety bond will depend upon the gross value of contract or contracts, the ratio which the value of the materials component of the contract bears to the entire gross value of the contract, the extent to which the materials component of the contract is taxable and taxpayer's record with this Department concerning the timely payment of tax liabilities.

8b.2.2.2. Umbrella Corporate Surety Bond. - In lieu of posting a cash bond or a corporate surety bond for each contract, a nonresident contractor may elect to file a corporate surety bond guaranteeing payment of consumers sales and use taxes due this State with respect to several contracts or all contracts executed within a specified period, whether such contracts be present or future contracts. The corporate surety must be qualified to do business in this State; and the corporate surety bond must be approved by the Tax Commissioner as to form, sufficiency, value, amount, stability and other features necessary to guarantee payment of the consumers sales and use taxes due this State with respect to such contracts. If the taxpayer has no tax payment history or record with this Department, an umbrella bond will not be accepted.

8b.3. The nonresident contractor may not begin performance of any contract until after the nonresident contractor posts with the Tax Commissioner a cash bond or corporate surety bond which is accepted and approved by the Tax Commissioner.

8b.4. Within thirty (30) days after complying with the registration requirements of W. Va. Code '11-15-8b and Section 8b of these regulations, the contractor shall file with the Tax Commissioner a statement itemizing the machinery, materials, supplies and equipment that he has or will have on hand in this State for performance of the contract. The itemized statement shall include the location outside this State from which such tangible personal property was or will be brought, shipped or transported: Provided, That the itemized statement shall include only the machinery, materials, supplies and equipment upon which neither the West Virginia consumers sales and service tax nor the West Virginia use tax has been paid. The tax due thereon shall be paid at the time of filing the above statement.

8b.5. See Section 110 of these regulations for additional information regarding nonresident contractors.

W. Va. Code R. § 110-15-8b