If you’re thinking of starting a business in West Virginia or expanding your current sales area to include the state, you need to know the details of their sales tax laws and how those laws will impact you. Like in most other states, the applicable sales tax rate will vary from one location to another in West Virginia, and the specific regulations outlining the conditions that make you responsible for collecting and remitting that tax are slightly different in each state as well.
The state sales tax rate in West Virginia is 6%, and independent jurisdictions throughout the state have the option of adding a 1% local tax to that if they choose. Currently, 36 of those localities have instituted the local tax, making their effective tax rate 7%, but that still leaves large part of the state where only the 6% rate applies.
There was recently a proposal that passed the state senate to raise the state sales tax rate, but that proposal is not favored in the state house of representatives, leaving the rate at 6% for the foreseeable future. The state law also stipulates that any sales tax charged on a purchase needs to be listed separately on the receipt, or if it’s not, there needs to be a clear statement to the customer that the tax is included in the purchase price of the item.
In West Virginia, you are only responsible for collecting and remitting sales tax to the state if your business has a significant presence, or nexus, there. That may mean that you:
Amazon does have a customer service center in West Virginia, which can trigger a nexus condition for anyone using fulfillment by Amazon or Amazon seller central programs.
Most sales of tangible personal property in West Virginia are subject to sales tax, as are the vast majority of services. This includes groceries and over-the-counter medications, although prescription medicines, food stamp purchases, and day care services are exempt, along with a variety of other specific types of purchases. In most cases, shipping and handling charges are taxable in West Virginia as well, and so to calculate the total tax due on a shipped purchase, you must include whatever you charge for shipping and handling into the total price of the item before applying the appropriate tax rate.
West Virginia is a member of the Streamlined Sales and Use Tax Agreement (SSUTA), with one of the results of that being that the definition of what’s taxable is uniform across the state. The SSUTA began in response to the 1992 decision in the case of Quill Corp v North Dakota, which stated that North Dakota could not compel Quill to collect and remit state sales tax made on purchases by North Dakota customers because the company had no physical presence in the state.
North Dakota had argued that the use of proprietary software by Quill’s North Dakota customers to place their orders constituted a substantial presence, but the court disagreed, stating in part that the myriad local taxes and regulations within a state were too much of a burden to require out-of-state sellers to navigate.
If it turns out you do have a sales tax nexus in West Virginia, and that what you’re selling is taxable, you must register for a sales tax permit before making sales to West Virginia customers. This can be done online or by mail, and there is no charge. Once you receive your West Virginia sales tax permit, you will not need to renew it, although you will be responsible for filing returns for as long as your permit is active, even if you did not make any taxable sales in the state during the period in question.
Because West Virginia is a SSUTA member, you can also register through the SSUTA website. If you choose this method, you will have to register with all SSUTA member states at the same time, which may or may not be appropriate based on your particular situation.
You can file your West Virginia sales tax return online or by mail. If your total tax liability is more than $25,000 for the period in which you are paying, you must file and pay online. The state will assign you a filing frequency when you register, which will be either monthly, quarterly, or annually, and that may change from year to year based on the volume of your sales in the previous 12-month period.
Sales tax returns and payments are due in West Virginia on the 20th of the month following the close of the applicable period. For annual filers, returns for the previous year are due on January 20th.
|January – March (Q1)||April 20|
|April – June (Q2)||July 20|
|July – September (Q3)||October 20|
|October – December (Q4)||January 20|
If you are late filing your return or making your West Virginia sales tax payment, a 5% penalty will be assessed every month for as long as you remain delinquent, with a maximum penalty of 25% for any given period.
Especially when you sell in multiple states, it can be a challenge to stay on top of the various sales tax requirements in each. The laws in West Virginia are similar to those in other places, but the specific rates that apply to each sale and the details of what exactly is taxable are often different from one state to another. However, if you want to keep operating your business in good standing in many states including West Virginia, you need to ensure you’re always compliant.
Fortunately, TaxTools provides all of the help you need to keep track of your taxable sales in every state and make sure you’re up-to-date on any changes to sales tax regulations in West Virginia or elsewhere. TaxTools will automatically add tax at the appropriate rate, and it will keep detailed records of all of your sales, so you can access up-to-date reports whenever you need them. This is especially important as many states require records to be kept and preserved for a certain period of time. TaxTools is also compatible with all ecommerce platforms, so no matter which ones you use, you won’t have to change anything about the way you do business to take advantage of the benefits TaxTools provides.
If you’d like to learn more about the way TaxTools can help streamline your business processes, click here to sign up for a free trial today.