SALT Report 1182 – The West Virginia State Tax Department has issued guidance on the application of municipal sales and use taxes. The city of Williamstown is the only municipality in the state to implement a 1% municipal sales and use tax which took effect on October 1, 2011
All municipality sales and use taxes apply to the same items and services to which state-level sales and use taxes apply, except for the sale or use of motor vehicles. However, municipal sales and use taxes would not apply in situations where an exemption would apply, such as an exemption certificate used by an exempt entity. Additionally, local-level taxes would not apply when a seller ships or delivers an item to a customer outside the municipality.
As for municipal use taxes, these taxes would be due when a customer purchases an item or service outside a city that imposes a local sales and use tax, does not pay sales tax to the seller, and then uses, stores, distributes, or consumes the item in the city that imposes the sales and use tax. The department also provides guidance for the application of municipal sales and use taxes for pick-up and delivery scenarios involving locations inside and outside a taxing municipality.
Retailers registered to collect state-level sales tax and do business in a city where municipal sales tax is imposed are required to register with the department to collect the local tax, even if the retailer is physically located outside the city. In calculating state and municipal sales taxes for a single transaction, the state and local rates are combined and applied to the taxable sales price, and the resulting price is rounded up to the nearest full cent. Like state-level sales and use taxes, a municipality’s local sales tax and use tax rates will be identical.
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