W. Va. Code R. § 110-13-2d

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-13-2d - Public Service or Utility Business

2d.1. Persons engaged within this State in certain public service or utility business are taxable on the privilege of engaging in the businesses and shall report the gross income from the business activities under the appropriate classification on the business and occupation tax form. Only gross income derived from the supplying of public services shall be reported under the public service classifications.

2d.2. There are certain persons who are not subject to tax under W. Va. Code '11-13-2d even though they may be subject to the control of this State's Public Service Commission. These statutorily exempt persons are railroads, railroad car companies, express companies, pipeline companies, motor carriers, telephone and telegraph companies and water carriers by steamboat or steamship. Municipally-owned water companies and municipally-owned electric distribution systems are not subject to the tax under W. Va. Code '11-13-2d.

2d.3. Upon any person engaged or continuing within this State in any public service or utility business, except railroad, railroad car, express, pipeline, telephone and telegraph companies, water carriers by steamboat or steamship and motor carriers, the tax due under in W. Va. Code ' 11-13-2d is equal to the gross income of the business derived from the activity or activities multiplied by the respective rates as follows:

2d.3.1. Street and interurban and electric railways, one and four-tenths percent (1.4%);

2d.3.2. Water companies, four and four-tenths percent (4.4%), except as to income received by municipally owned water plants;

2d.3.3. Electric light and power companies:

2d.3.3.1. A person who generates electric power in this State and then sells that power generation in regulated transactions in this State, shall pay tax at the rate of four percent (4%) on sales and demand charges derived from the sale of the power in this State, except as otherwise provided in this rule.

2d.3.3.2. A person who sells electric power in this State in regulated transactions which that person does not generate in this State, shall pay tax at the rate of three percent (3%) on sales and demand charges derived from the sale of the power in this State, except as otherwise provided in this rule.

2d.3.3.3. Notwithstanding the provisions of Sections 2.3.3.1 and 2.3.3.2 of this rule, if electric power is sold in this State:

(1) to a plant location of a customer engaged in manufacturing activity and the contract demand or usage at the plant location exceeds two hundred thousand kilowatts per hour per year or two hundred thousand kilowatts per hour in a year, then the rate of tax on the sales and demand charges derived from the sales is two percent (2%);

(2) to a plant location in this State that consumes the power in an electrolytic process for the manufacture of chlorine, then to the extent the electric power consumed in the electrolytic process is separately metered from all other electric power consumed at that location, the demand charges for the power is exempt from the tax imposed by W. Va. Code ' 1-13-2;

(3) to a plant location in this State that consumes the power in the manufacture of ferroalloy, then to the extent the electric power consumed in manufacturing ferroalloy is separately metered from all other electric power consumed at that location, the sales and demand charges for the power are exempt from the tax imposed by W. Va. Code '11-13-2; or

(4) by a municipally owned plant producing or purchasing electricity and distributing the same, the income it receives from the power is exempt from the tax imposed by W. Va. Code '11-13-2.

2d.3.3.4. As used in this Section, the term "ferroalloy" means any of the various alloys of iron and one or more other elements used as a raw material in the production of steel, but does not include the final production of steel.

2d.3.4. Natural gas companies shall pay tax at the rate of four and twenty-nine hundredths percent (4.29%) on the gross income, except (1) that the sale of natural gas under W. Va. Code '11-13-2d is exempt from the tax due under W. Va. Code '11-13-2d to the extent that the natural gas is separately metered and is gas from which the purchaser derives hydrogen and carbon monoxide for use in the manufacture of chemicals in this State, and the full economic benefit of the exception provided in this subdivision to the taxpayer shall be passed on to the purchaser of the natural gas and (2) that there shall be no exemption for the sale of any natural gas from which the purchaser derives carbon monoxide or hydrogen for the purpose of resale;

2d.3.5. Toll bridge companies shall pay tax at the rate of four and twenty-nine hundredths percent (4.29%); and

2d.3.6. Upon all other public service or utility business shall pay tax at the rate of two and eighty-six hundredths percent (2.86%).

2d.4. The measure of this tax shall not include gross income derived from commerce between this State and other states of the United States or between this State and foreign countries. The measure of the tax under this Section shall include only gross income received from the activity of supplying public service.

2d.5. Until June 1, 1995, on and after March 1, 1989, electric light and power companies shall also determine their liability for payment of tax under W. Va. Code ''11-13-2d, 11-13-2m and 11-13-2n. If for taxable months beginning on or after the March 1, 1989 liability for tax under W. Va. Code '11-13-2n is equal to or greater than the sum if the power company's liability for payment of tax under W. Va. Code '' 11-13-2d and 11-13-2m, then the company shall pay the tax due only under W. Va. Code '11-13-2n. But if tax liability under W. Va. Code '11-13-2n is less, then tax shall be paid under W. Va. Code ''11-13-2d and 11-13-2m and the tax under W. Va. Code '11-13-2n shall not be paid. The provisions of this subsection and subdivision 2d.3.3 of this rule shall expire and become null and void for taxable years beginning on or after January 1, 1998.

2d.6. Beginning June 1, 1995, electric light and power companies that actually paid tax based on the provisions of Section 2d.3.3 or Section 2m of this rule for every taxable month in 1994 shall determine their liability for payment of tax in accordance with Section 2d.6.1 of this rule. All other electric light and power companies shall determine their liability for payment of tax exclusively under Section 2o of this rule.

2d.6.1. If for taxable months beginning on or after June 1, 1995, liability for tax under Section 2o of this rule is equal to or greater than the sum of the power company's liability for payment of tax under Section 2d.3.3 and Section 2m of this rule, then the company shall pay the tax due under Section 2o of this rule and not the tax due under 2d.3.3 and Section 2m of this rule. If tax liability under Section 2o of this rule is less, then the tax shall be paid under Section 2d.3.3 and Section 2m of this rule and the tax due under Section 2o of this rule shall not be paid.

2d.6.2. The provisions of Section 2d.3.3 of this rule expire and become null and void for taxable years beginning on or after January 1, 1998, at which time all electric light and power companies shall determine their liability for payment of tax exclusively under Section 2o of this rule.

W. Va. Code R. § 110-13-2d