W. Va. Code R. § 110-15H-3

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

Section 110-15H-3 - Definitions

3.1. "Alcoholic beverages" means beverages that are suitable for human consumption and contain one half of one percent or more of alcohol by volume.

3.2. "Bundled transaction" means the retail sale of two or more products, except real property and services to real property, where the products are otherwise distinct and identifiable and the products are sold for one nonitemized price. A "bundled transaction" does not include the sale of any products in which the "sales price" varies, or is negotiable, based on the selection by the purchaser of the products included in the transaction.

3.2.1. "Distinct and identifiable products" does not include:

3.2.1.a. Packaging - such as containers, boxes, sacks, bags, and bottles - or other materials - such as wrapping, labels, tags, and instruction guides - that accompany the "retail sale" of the products and are incidental or immaterial to the "retail sale" of those products. Examples of packaging that are incidental or immaterial include grocery sacks, shoeboxes, dry cleaning garment bags and express delivery envelopes and boxes;

3.2.1.b. A product provided free of charge with the required purchase of another product. A product is "provided free of charge" if the "sales price" of the product purchased does not vary depending on the inclusion of the product "provided free of charge"; or

3.2.1.c. Items included in the member state's definition of "sales price," as defined in this section.

3.2.2. The term "one nonitemized price" does not include a price that is separately identified by product on binding sales or other supporting sales-related documentation made available to the customer in paper or electronic form including, but not limited to, an invoice, bill of sale, receipt, contract, service agreement, lease agreement, periodic notice of rates and services, rate card, or price list.

3.2.3. A transaction that otherwise meets the definition of a "bundled transaction" is not a "bundled transaction" if it is:

3.2.3.a. The "retail sale" of tangible personal property and a service where the tangible personal property is essential to the use of the service, and is provided exclusively in connection with the service, and the true object of the transaction is the service;

3.2.3.b. The "retail sale" of services where one service is provided that is essential to the use or receipt of a second service and the first service is provided exclusively in connection with the second service and the true object of the transaction is the second service;

3.2.3.c. A transaction that includes taxable products and nontaxable products and the "purchase price" or "sales price" of the taxable products is de minimis.

3.2.3.c.1. "De minimis" means the seller's "purchase price" or "sales price" of the taxable products is ten percent or less of the total "purchase price" or "sales price" of the bundled products.

3.2.3.c.2. Sellers shall use either the "purchase price" or the "sales price" of the products to determine if the taxable products are de minimis. Sellers may not use a combination of the "purchase price" and "sales price" of the products to determine if the taxable products are de minimis.

3.2.3.d. Sellers shall use the full term of a service contract to determine if the taxable products are de minimis;

3.2.3.e. A transaction that includes products taxable at the general rate of tax and food or food ingredients taxable at a lower rate of tax and the "purchase price" or "sales price" of the products taxable at the general sales tax rate is de minimis.

3.2.3.e.1. "De minimis" means the seller's "purchase price" or "sales price" if the products taxable at the general Sales Tax rate is ten percent or less of the total "purchase price" or "sales price" of the bundled products.

3.2.3.e.2. Sellers shall use either the "purchase price" or the "sales price" of the products to determine if the products taxable at the general rate of tax are de minimis. Sellers may not use a combination of the "purchase price" and "sales price" of the products to determine if the products taxable at the general rate of tax are de minimis.

3.2.3.e.3. Sellers shall use the full term of a service contract to determine if the products taxable at the general rate of tax are de minimis; or

3.2.3.f. The "retail sale" of exempt tangible personal property, or food and food ingredients taxable at a lower rate of tax, and tangible personal property taxable at the general rate of tax where:

3.2.3.f.1. The transaction includes "food and food ingredients", "drugs", "durable medical equipment", "mobility enhancing equipment", and "prosthetic devices" all as defined in W. Va. Code § 11-15B-1 et seq.; and

3.2.3.f.2. Where the seller's "purchase price" or "sales price" of the taxable tangible personal property, taxable at the general rate of tax, is fifty percent or less of the total "purchase price" or "sales price" of the bundled tangible personal property. Sellers may not use a combination of the "purchase price" and "sales price" of the tangible personal property when making the fifty percent determination for a transaction.

3.3. "Candy" means a preparation of sugar, honey or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops or pieces. "Candy" does not include any preparation containing flour and requires no refrigeration.

3.4. "Dietary supplement" means any product, other than "tobacco", intended to supplement the diet that:

3.4.1. Contains one or more of the following dietary ingredients:

3.4.1.a. A vitamin;

3.4.1.b. A mineral;

3.4.1.c. A herb or other botanical;

3.4.1.d. An amino acid;

3.4.1.e. A dietary substance for use by humans to supplement the diet by increasing the total dietary intake; or

3.4.1.f. A concentrate, metabolite, constituent, extract or combination of any ingredient described in paragraphs a through e of this subdivision;

3.4.2. Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such a form, is not represented as conventional food and is not represented for use as a sole item of a meal or of the diet; and

3.4.3. Is required to be labeled as a dietary supplement, identifiable by the "Supplemental Facts" box found on the label as required pursuant to 21 CFR §101.36, or in any successor section of the Code of Federal Regulations.

3.5. "Drug" means a compound, substance or preparation, and any component of a compound, substance or preparation, other than food and food ingredients, dietary supplements or alcoholic beverages:

3.5.1. Recognized in the official United States pharmacopoeia, official homeopathic pharmacopoeia of the United States, or official national formulary, and supplement to any of them;

3.5.2. Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in humans; or

3.5.3. Intended to affect the structure or any function of the human body.

3.6. "Food and food ingredients" means substances, whether in liquid, concentrated, solid, frozen, dried or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. "Food and food ingredients" does not include alcoholic beverages, prepared food, or tobacco.

3.7. "Food sold through a vending machine" means food dispensed from a machine or other mechanical device that accepts payment.

3.8. "NAICS" means North American Industry Classification Code.

3.9. "Person" means an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation or any other legal entity.

3.10. "Prepared food" means:

3.10.1. Food sold in a heated state or heated by the seller;

3.10.2. Two or more food ingredients mixed or combined by the seller for sale as a single item; or

3.10.3. Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food.

3.10.4. "Prepared food" does not include

3.10.4.a. Food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the Food and Drug Administration in chapter 3, part 401.11 of its Food Code of 2001 so as to prevent food borne illnesses;

3.10.4.b. Food sold by a seller whose proper primary NAICS classification is manufacturing in sector 311, except subsection 3118 (bakeries);

3.10.4.c. Food sold in an unheated state by weight or volume as a single item; or

3.10.4.d. Bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas.

3.11. "Purchase price" means the measure subject to the tax imposed by W. Va. Code §§ 11-15-1 et seq., or 11-15A-1 et seq., and has the same meaning as sales price.

3.12. "Purchaser" means a person to whom a sale of personal property is made or to whom a service is furnished.

3.13. "Retail sale" or "sale at retail" means:

3.13.1. Any sale or lease for any purpose other than for resale as tangible personal property, sublease or subrent; and

3.13.2. Any sale of a service other than a service purchased for resale.

3.14. "Sales price" means the measure subject to the Sales Tax and includes the total amount of consideration, including cash, credit, property and services, for which personal property or services are sold, leased or rented, valued in money, whether received in money or otherwise, without any deduction for the following:

3.14.1. The seller's cost of the property sold;

3.14.2. The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;

3.14.3. Charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;

3.14.4. Delivery charges;

3.14.5. Installation charges;

3.14.6. The value of exempt personal property given to the purchaser where taxable and exempt personal property have been bundled together and sold by the seller as a single product or piece of merchandise; and

3.14.7. Credit for the fair market value of any trade-in.

3.14.7.a. "Sales price" does not include:

3.14.7.a.1. Discounts, including cash, term, or coupons that are not reimbursed by a third party that are allowed by a seller and taken by a purchaser on a sale;

3.14.7.a.2. Interest, financing and carrying charges from credit extended on the sale of personal property, goods or services, if the amount is separately stated on the invoice, bill of sale or similar document given to the purchaser; and

3.14.7.a.3. Any taxes legally imposed directly on the consumer that are separately stated on the invoice, bill of sale or similar document given to the purchaser.

3.15. "Sales Tax" means the tax levied under W. Va. Code § 11-15-1 et seq.

3.16. "Seller" means any person making sales, leases or rentals of personal property or services.

3.17. "Service" includes all nonprofessional activities engaged in for other persons for a consideration, which involve the rendering of a service as distinguished from the sale of tangible personal property, but does not include contracting, personal services, services rendered by an employee to his or her employer, any service rendered for resale, or any service furnished by a business that is subject to the control of the Public Service Commission when the service or the manner in which it is delivered is subject to regulation by the Public Service Commission of this State. The term "service" or "selected service" does not include payments received by a vendor of tangible personal property as an incentive to sell a greater volume of such tangible personal property under a manufacturer's, distributor's or other third-party's marketing support program, sales incentive program, cooperative advertising agreement or similar type of program or agreement, and these payments are not considered to be payments for a "service" or "selected service" rendered, even though the vendor may engage in attendant or ancillary activities associated with the sales of tangible personal property as required under the programs or agreements.

3.18. "Soft drink" means nonalcoholic beverages that contain natural or artificial sweeteners. "Soft drinks" do not include beverages that contain milk or milk products, soy, rice or similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by volume.

3.19. "Tangible personal property" means personal property that can be seen, weighed, measured, felt, or touched, or that is in any manner perceptible to the senses. "Tangible personal property" includes, but is not limited to, electricity, steam, water, gas and prewritten computer software.

3.20. "Tax" includes all taxes levied under W. Va. Code §§ 11-15-1 et seq., or 11-15A-1 et seq., and additions to tax, interest and penalties levied under article ten of this chapter.

3.21. "Tobacco" means cigarettes, cigars, chewing or pipe tobacco or any other item that contains tobacco.

3.22. "Use Tax" means the tax levied under W. Va. Code § 11-15A-1 et seq.

3.23. "Vendor" means any person furnishing services taxed by W. Va. Code §§ 11-15-1 et seq., or 11-15A-1 et seq., or making sales of tangible personal property or custom software. "Vendor" and "seller" are used interchangeably in W. Va. Code §§ 11-15-1 et seq., and 11-15A-1 et seq.

W. Va. Code R. § 110-15H-3