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Remote Sellers and West Virginia Sales and Use Tax

Beginning January 1, 2019, remote sellers, as defined below, will need to collect West Virginia State and municipal sales and use taxes on sales delivered in West Virginia on or after January 1, 2019, unless the small-seller exception applies.

“Remote seller” means a person selling tangible personal property and/or services for delivery in West Virginia who does not have a physical presence in West Virginia and who has not voluntarily agreed to collect West Virginia sales and use taxes.

Small-seller exception: This collection requirement does not apply to a remote seller that during calendar year 2018 had gross sales of tangible personal property and/or services for delivery in West Virginia of $100,000 or less and had fewer than 200 sales transactions for delivery in West Virginia.

When the small seller-exception applies, then in any calendar year when either of these thresholds is met, the seller must begin to collect West Virginia sales and use taxes on sales made after the date either of these thresholds is met.

The duty to collect West Virginia sales and use taxes also applies to West Virginia municipal sales and use taxes when the transaction is sourced to a municipality that imposes sales and use taxes administered, collected and enforced by the State Tax Commissioner.

Remote sellers are required to register to collect West Virginia sales and use taxes. Registration may be done through the remote seller simplified registration process at the West Virginia State Tax Department webpage, or the webpage of the Streamlined Sales Tax Governing Board, Inc..

1. What is the Wayfair decision?

The Wayfair decision refers to the decision rendered by the United States Supreme Court on June 21, 2018 in South Dakota v. Wayfair, Inc., et al.

2. What is the effect of the Wayfair decision?

The effect of the United States Supreme Court's decision in Wayfair, Inc., is that an out-of-state seller with no physical presence in West Virginia (i.e., remote seller) is required to collect and remit West Virginia sales and use taxes on taxable sales delivered in West Virginia on and after January 1, 2019. More details are below.

3. Who is a remote seller?

A remote seller is an out-of-state seller that has no physical presence or activities in West Virginia other than making sales over the Internet, by telephone, or mail order.

4. Are all remote sellers required to register in West Virginia?

All remote sellers are required to be registered to collect and remit West Virginia State and municipal sales or use tax beginning on January 1, 2019, unless the following paragraph applies.

Smaller remote sellers that have no physical presence in West Virginia will not be required to collect West Virginia State and municipal sales and use taxes when the remote seller has annual sales of products and services into the state of (1) no more than $100,000 and (2) has less than 200 separate transactions for goods and services delivered in West Virginia.

Note: The small-seller exception does not apply to sellers with a physical presence in West Virginia, or to sellers that volunteer to collect West Virginia taxes.

See the answers to Question #5 and Question #6 for more information about registering in West Virginia.

See the answer to Question #7 for more information about the small-seller exception.

5. What is the date a remote seller is required to register with West Virginia?

West Virginia requires remote sellers to begin collecting sales or use tax on January 1, 2019.

To ensure the remote seller's registration is properly processed by January 1, 2019, the remote seller should complete the registration at least three weeks prior to January 1, 2019. The remote seller may indicate a first sales date of January 1, 2019 on the application. A remote seller may register and begin collecting tax at any time prior to January 1, 2019, but the first date of collection should be consistent with the first sales date indicated on its application for business registration.

See the answer to Question #6 for more information about registering in West Virginia.

6. How do remote sellers register in West Virginia?

Remote sellers can register to begin collecting and remitting West Virginia State and municipal sales and use taxes through either of the following methods:

Register directly with West Virginia – To register only for West Virginia, you can use West Virginia's Online Registration System, or you can get a Business Registration Form from our Business Registration page.

Register through Streamlined Sales Tax -- To register for multiple states, including West Virginia, submit a single application through the Streamlined Sales Tax Registration System (SSTRS). There is no fee to complete and submit this online registration.

Upon completion of the registration, the remote seller will be registered to collect and remit sales and use tax in all 24 Streamlined member states.

Additional information is provided on the Streamlined Sales Tax Registration System (SSTRS) web page, and in the Streamlined Sales Tax Registration System FAQs.

A remote seller may use a Certified Service Provider (CSP) to perform its sales or use tax responsibilities when registering through the Streamlined Sales Tax Registration System (SSTRS). CSPs are certified under the Streamlined Sales and Use Tax Agreement to perform all the remote seller's sales and use tax functions, other than the remote seller's obligation to remit tax on its own purchases. A CSP is designed to allow a business to outsource most of its sales tax administration responsibilities. If a remote seller registers through the Streamlined Sales Tax Registration System (SSTRS) and contracts with a CSP to perform its sales and use tax functions (i.e., CSP Services), the CSP will file monthly sales and use tax returns on behalf of the remote seller.

See the CSP FAQs for more information.

7. How is the small-seller exception determined?

A small-seller exception is provided for remote sellers that have $100,000 or less in annual gross sales and less than 200 separate sales transactions delivered in West Virginia. A remote seller that qualifies for the small-seller exception is not required to register and collect West Virginia state and municipal sales and use taxes.

The annual gross sales amount and number of separate transactions include both taxable and nontaxable sales of services delivered into West Virginia.

The small-seller exception is determined on an annual basis by looking at the seller’s business during the preceding calendar year. However, if during the current calendar year either of these thresholds is satisfied, the seller must begin collecting West Virginia State and municipal sales taxes on all sales made after the day the threshold was reached.

8. Is a remote seller required to register if it does not make any taxable sales in West Virginia?

A remote seller that does not qualify for the small-seller exception but only makes nontaxable sales in West Virginia is not required to register to collect West Virginia sales or use tax.

For example, a remote seller that is a wholesaler and only sells products for resale, is not required to register for sales or use tax. However, if that wholesaler makes taxable sales to end-users (i.e., not for resale), the wholesaler is required to register and collect sales or use tax on those sales, unless an exemption applies.

9. How are remote sellers that are already registered in West Virginia affected by the Wayfair decision?

Out-of-State sellers that were registered in West Virginia prior to the U.S. Supreme Court's decision in South Dakota v. Wayfair, Inc., are not impacted by this decision and must continue to collect and remit sales and use tax.

Note: New standards for administering sales tax laws for remote sellers are provided in Administrative Notice 2018-18. These standards are consistent with South Dakota v. Wayfair, Inc., which approved collection of the tax when the remote seller did not have a physical presence in the state and the small-seller exception for remote sellers who do not have annual sales of products and services into the state of (1) more than $100,000 or (2) 200 or more separate transactions. The small-seller exception does not apply to sellers with a physical presence in West Virginia or to remote sellers who previously volunteered to collect and remit West Virginia state and municipal sales and use taxes.

See the answer to Question #7 for more information about the small-seller exception.

10. Are remote sellers liable for tax on all sales into West Virginia?

Remote sellers are required to collect and remit sales or use tax on all sales of taxable products and services into West Virginia, unless an exemption applies (e.g., resale). See the department's Booklet online under the Business Registration forms page. The Booklet provides Information and Instructions for Business Registration.

Note: New standards for administering sales tax laws for remote sellers have been developed by Administrative Notice 2018-18 consistent with South Dakota v. Wayfair, Inc., which approved a small-seller exception for remote sellers who (1) do not have annual sales of products and services into the state of more than $100,000 and (2) have less than 200 separate transactions for delivery in West Virginia.

See the answer to Question #7 for more information about the small-seller exception.

11. Are remote sellers liable for tax on sales into West Virginia prior to the Wayfair decision?

If a remote seller is required to register based solely on the U.S. Supreme Court's decision in South Dakota v. Wayfair, Inc., the remote seller is not required to collect and remit sales or use tax on sales that occurred prior to January 1, 2019. A remote seller may voluntarily register and collect sales and use tax at any time prior to January 1, 2019.

12. Are remote sellers required to collect sales tax on sales made via the Internet?

Remote sellers are required to collect and remit tax on all taxable sales into West Virginia, including sales made online. The Internet Tax Freedom Act prohibits West Virginia from imposing a sales tax on Internet access services but does not prohibit West Virginia from taxing sales made via the Internet.

13. How often are remote sellers required to file sales and use tax returns?

A remote seller's filing frequency (e.g., monthly, quarterly, annually) is based on the information provided with registration. Remote sellers will be notified by the department of their filing frequency based on the annual dollar amount of their taxable sales. The department may review a remote seller's filing frequency on an annual basis and change the filing frequency based on the remote seller's filing history. If the department changes the filing frequency, the remote seller will be notified of the change.

Returns and tax payments are due on the 20th day of the calendar month following the close of the reporting period, except that the annual return is due on the 30th day following the close of the calendar or fiscal year, as the case may be.

Note: If a remote seller registers through the Streamlined Sales Tax Registration System (SSTRS) and contracts with a Certified Service Provider (CSP) to perform its sales and use tax functions (i.e., CSP Services), the CSP will file monthly sales and use tax returns on behalf of the remote seller.

14. How do remote sellers file sales and use tax returns?

Remote sellers may electronically file West Virginia sales and use tax returns using MyTaxes, the department's online filing and payment system.

Remote sellers must register for a username and password prior to filing returns. Instructions for creating a username and password for MyTaxes may be found in Help. Answers to frequency asked questions for registration and filing returns may be found in FAQ.

Note: If a remote seller registers through the Streamlined Sales Tax Registration System (SSTRS) and contracts with a Certified Service Provider (CSP) to perform its sales and use tax functions (i.e., CSP Services), the CSP will file monthly sales and use tax returns on behalf of the remote seller.

15. Are remote sellers required to collect and remit municipal sales and use taxes?

Remote sellers registered for West Virginia sales or use taxes must collect the applicable municipal sales and use taxes when the shipped-to physical address of the customer is located within the geographic boundaries of a municipality that imposes a sales and use tax.

Currently, 43 West Virginia municipalities impose a municipal sales and use tax. In most instances the rate of tax is 1% of the sales price, including shipping and handling charges. A few municipalities impose tax at the 0.5% rate of tax. A list of municipalities that impose sales and uses tax and the applicable rate of tax is posted on the Municipal Sales and Use Tax page on our website.

16. Are remote sellers subject to audits by the department?

Remote sellers may be subject to an audit, like any other sellers.

17. What is the effect of the Wayfair decision on West Virginia purchasers?

West Virginia purchasers have a statutory obligation to pay West Virginia sales and use taxes on their purchases. This obligation is satisfied when they pay the tax to the seller. Purchasers in West Virginia may see an increased number of remote sellers that are charging sales and use tax.

As before, if a remote seller does not charge West Virginia sales tax on a taxable item, the purchaser must report and pay use tax on the purchase price. An individual may report the use tax on his or her individual income tax return.

18. Are purchasers required to pay use tax if the remote seller qualifies for the small-seller exception?

The purchaser is responsible for reporting use tax on its purchase price of a taxable item if the remote seller does not charge tax. A remote seller that qualifies for the small-seller exception is not required to register and collect West Virginia sales or use tax on its taxable sales. However, the purchaser is liable for use tax on its purchase of taxable items.

19. Are there sales and use tax resources available for new registrants?

The following resources are available on the department's website.

Streamlined Sales Tax Governing Board, Inc.
http://www.streamlinedsalestax.org/

The Combined Sales and Use Tax Return and Instructions are available on the Sales and Use Tax page on our website.

TSD-100 provides information regarding West Virginia Business Taxes.

TSD-300 provides information for Sales and Use Tax Exemptions:

TSD-345 provides information for Sales Tax and Vendor Responsibilities:

The TSDs are accessed by going to the Business page and selecting Sales and Use Tax from the sidebar. The Sales and Use Tax page has a link to Publications and the return instructions.

20. Where can remote sellers find information for other states?

The Streamlined Sales Tax Governing Board has developed a State Website page and a Contact Information page that provide sales tax information for both Streamlined Sales Tax member states and non-member states. Information includes links to state websites, customer service contact information, registration pages, sales and use tax rates, and taxable/exempt information for each state.

21. What sales sourcing rules does West Virginia follow?

West Virginia has adopted destination sourcing and the sourcing rules in the Streamlined Sales and Use Tax Agreement. See W. Va. Code § 11-15B-14, 14a and 15.

The general rule is that the transaction is sourced to the location where the purchaser receives the tangible personal property purchased or makes first use of the service purchased. The hierarchy of sourcing rules is found in W. Va. Code § 11-15B-15(a).

For more information, please contact:

West Virginia State Tax Department
Taxpayer Services Division
P.O. Box 3784
Charleston, West Virginia 25337-3784

Phone: (304) 558-3333
Fax: (304) 558-3269

Email additional questions to TaxHelp@WV.Gov

Tax Information and Assistance: (304) 558-3333 or (800) 982-8297