W. Va. Code R. § 110-15-9c

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

Section 110-15-9c - Direct Pay Permits

9c.1. Eligibility for Permit. - A person may apply for a direct pay permit if such person (i) has a current business registration certificate and (ii) is not delinquent on the payment of any taxes imposed by Chapter 11 of the West Virginia Code and (iii) satisfies any one of the following conditions:

9c.1.1. Is engaged in the business of manufacturing, transportation, transmission, communication or the production of natural resources.

9c.1.2. Is subject to tax under W. Va. Code '11-13-1 et seq. (Business and Occupation Tax), W. Va. Code '11-13A-1 et seq. (Severance Tax) or W. Va. Code '11-13B-1 et seq. (Telecommunications Tax).

9c.1.3. Is a bona fide charitable organization that makes no charge whatsoever for services it renders.

9c.1.4. Is a nationally chartered fraternal or social organization, the purchases of which are used for the sole purpose of free distribution in public welfare or relief work.

9c.1.5. Is a volunteer fire department organized and incorporated under the laws of the State of West Virginia.

9c.1.6. Makes purchases of tangible personal property or services, the use of which is unknown to him at the time of the purchase and one of the reasonably foreseeable uses would render the purchase exempt from consumers sales and service tax and use tax.

9c.1.7. Makes purchases of tangible personal property or services which are used in both exempt and taxable manners and who must pay tax on an apportionment basis.

9c.2. Applying for a Permit, Form. - A person seeking a direct pay permit must file a properly completed Application for Direct Pay Permit (Form WV/CST-250) with the West Virginia State Tax Department, Accounting Division, P. O. Drawer 425, Charleston, West Virginia 25322-0425. Applications may be obtained by mail from the West Virginia Tax Department, P.O. Drawer 2389, Charleston, West Virginia 25328, or may be picked up during regular business hours at the West Virginia State Revenue Center, 1001 Lee Street, East, Charleston, West Virginia, at the Taxpayer Services Division of the State Tax Department, Room W-417, State Capitol Building, Charleston, West Virginia or at any State Tax Department local field office.

9c.3. Issuance. - The Tax Commissioner, upon review of the application filed, has the sole discretion to issue a direct pay permit. If the application is approved, a numbered direct pay permit will be mailed to the applicant. Should the application be disapproved or rejected, the applicant will be so notified in writing.

9c.4. Validity; Renewal of Permit. - A direct pay permit shall continue to be valid until (i) surrendered by the holder or (ii) cancelled for cause or (iii) the expiration of the business' registration year under W. Va. Code '11-12-1 et seq. A direct pay permit that expires by reason of the expiration of the business' registration year shall be renewed automatically when the business' business registration certificate is issued for the next succeeding fiscal year unless cancelled for cause or surrendered by the holder thereof.

9c.5. Cancellation of Permit.

9c.5.1. Cause. - A direct pay permit may be cancelled or not renewed for cause. Cause shall include any one of the following:

9c.5.1.1. The direct pay permit holder is delinquent by more than thirty (30) days in the payment of any tax imposed by Chapter 11 of the West Virginia Code.

9c.5.1.2. The direct pay permit holder utilizes the permit in any unauthorized manner, including but not limited to making purchases of items for personal use or consumption of an individual officer, employee or proprietor of a business or organization when the permit is issued to the business or organization.

9c.5.1.3. The direct pay permit holder fails to file a direct pay return for any period in accordance with Section 9c.7 of these regulations within five (5) days after the due date thereof.

9c.5.1.4. Effective July 1, 1990, an applicant for a direct pay permit or an applicant for renewal of a direct pay permit shall not be issued a direct pay permit or direct pay permit renewal if the applicant is not, or is no longer, authorized to receive or use a direct pay permit under Section 9c.1 of these regulations, or under any other provision of these regulations, or under any provision of the West Virginia Code.

9c.5.2. Procedure. - The Tax Commissioner shall give the direct pay permit holder written notice of the Tax Commissioner's intent to cancel or not renew a direct pay permit.

9c.5.2.1. The notice shall contain the reason for the cancellation or nonrenewal, the date when the cancellation or nonrenewal becomes effective, and the date, time and place where the taxpayer may appear and show cause why the intended action should not occur.

9c.5.2.2. The written notice shall be served upon the taxpayer in the same manner as a notice of assessment is served under W. Va. Code '11-10-5e and the notice shall be served not less than twenty (20) days prior to the date of the informal show cause hearing.

9c.5.2.3. Failure to appear at a show cause hearing shall result in the direct pay permit holder's forfeiture of its right to such hearing and shall render the cancellation or nonrenewal final and not subject to administrative or judicial review. Should the direct pay permit holder be dissatisfied with the administrative decision resulting from the show cause hearing, an appeal may be taken to circuit court in accordance with the appeal procedure provided in W. Va. Code '11-10-10.

9c.5.2.4. The cancellation or nonrenewal of a direct pay permit shall not be stayed unless directed by a circuit court or the Tax Commissioner.

9c.5.3. Effect. - Upon the expiration, non-renewal, cancellation or surrender of a direct pay permit, the provisions of W. Va. Code '11-15-1 et seq. and W. Va. Code '11-15A-1 et seq., without regard to direct pay permits, shall apply to the person who previously held such permit. Each person who held a direct pay permit that has expired, not been renewed, been cancelled or surrendered shall promptly notify in writing all vendors from whom he purchases or leases tangible personal property or purchases taxable services with the use of direct pay permits that such permit was cancelled or surrendered. The notice required by this Section shall be made within ten (10) days after the permit has been cancelled or surrendered. Upon receipt of such notice, the vendor or retailer shall not be relieved pursuant to Section 4.3.3 (relating to acceptance of direct pay number in lieu of collecting tax) of these regulations from its requirement to collect the consumers sales and service tax and the use tax on all sales or leases of tangible personal property and sales of taxable services thereafter made to or for such person.

9c.6. Use of Direct Pay Permit.

9c.6.1. In General. - A direct pay permit may be used when the holder thereof notifies a vendor or retailer of his direct pay permit number in accordance with Section 9c.6.2 of these regulations. Upon receipt of such notice, the vendor or retailer shall be absolved from its responsibility to collect and remit consumers sales and service tax and use tax with respect to the transaction governed by the notice and such direct pay permit holder shall report the taxes to the Tax Commissioner in accordance with Section 9c.7 of these regulations.

9c.6.2. Notice. - The notice by the direct pay permit holder to the vendor or retailer may relate to a particular transaction or may apply such to present and future transactions as specified in such notice.

9c.6.3. Notwithstanding anything to the contrary, a direct pay permit may not be used in the following situations:

9c.6.3.1. If the direct pay permit has been cancelled, surrendered or has expired.

9c.6.3.2. For the purchase of food.

9c.6.3.3. Effective on and after July 1, 1990, as a device to defer payment of consumers sales and service tax or use tax.

9c.6.3.4. Effective on and after July 1, 1990, as a substitute for an exemption certificate or material purchase certificate.

9c.6.3.5. For the purchase of gasoline or special fuel. See Section 11.8 of these regulations.

9c.7. Reporting and Payment of Tax by Permit Holder.

9c.7.1. Determination of Taxable Status. - Each direct pay permit holder is required to determine the taxable status of each purchase and report it on the return covering the period in which the purchase occurred. If the holder cannot at the time of the purchase reasonably determine whether the use of the tangible personal property or services so purchased will be exempt from tax, the holder may report the purchase as exempt on the return covering the period in which the purchase occurred: Provided, That if the holder later uses the property in a manner that is not exempt from use tax, the holder must report such use and pay tax thereon on a quarterly use tax return Form WV/CST-220.

9c.7.2. Return. - A direct pay return shall show for the reporting period the value (monetary consideration or purchase price) of the direct pay permit holder's total purchases of tangible personal property and services for which a direct pay permit was used, the amount of purchases exempt from tax, and the amount of tax due from the permit holder, which amount shall accompany the return.

9c.7.3. Due Dates of Returns.

9c.7.3.1. On or before the fifteenth (15th) day of each month, every direct pay permit holder shall make and file with the Tax Commissioner a direct pay permit tax return for the preceding month on the Form WV/CST-210 or WV/CST-230.

9c.7.3.2. Returns Made on or After July 1, 1990.

9c.7.3.2.1. After June 30, 1990, if the amount of consumers sales and service tax and use tax in total due from the taxpayer averages less than $100 per month for the taxable year or for the taxpayer's immediately preceding taxable year, the taxpayer may file a combined consumers sales and service tax and use tax direct pay permit return quarterly, in lieu of monthly returns. The tax shown thereon to be due shall be remitted on or before the fifteenth (15th) day following the close of the calendar quarter.

9c.7.3.2.2. After June 30, 1990, if the amount of consumers sales and service tax and use tax in total due from the taxpayer averages less than $50 per calendar quarter or averaged less than $50 per calendar quarter during the taxpayer's immediately preceding taxable year, the taxpayer may file a combined consumers sales and service tax and use tax annual direct pay permit return. The amount of tax shown thereon to be due shall be remitted on or before the last day of January of the next succeeding calendar year after the calendar year during which the tax accrued.

9c.7.4. The Tax Department, upon written request by a direct pay permit holder, may grant a reasonable extension of time for the making and filing of direct pay permit returns, and paying the tax due. Interest on such tax shall be chargeable on every extended payment at the rate specified in W. Va. Code '11-10-17.

9c.8. Recordkeeping Requirements.

9c.8.1. If the direct payment permit holder does not timely file the appropriate return for tangible personal property or taxable services purchased through the use of the direct payment permit, the permit holder has not claimed exemption for such purchases; in this situation, "timely filing" means to claim the exemption for the purchase on the next return required to be filed after the purchase transaction is completed. Failure to properly claim the exemption on the direct pay permit return will result in loss of the exemption on the transaction with tax therefore due on the purchase.

9c.8.2. Failure to pay the tax at the time of the sale and failure to properly claim the exemption will result in the taxpayer being classified as being delinquent in the payment of the consumers sales and service tax or use tax. As a result, the taxpayer will be subject to the payment of the delinquent tax, interest, additions to tax and penalties as authorized by W. Va. Code '11-9-1 et seq. and W. Va. Code '11-10-1 et seq.

W. Va. Code R. § 110-15-9c