W. Va. Code R. § 110-21-74

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

Section 110-21-74 - Employer Return And Payment Of Withheld Taxes

74.1. General. - Every employer required to deduct and withhold tax under the West Virginia Personal Income Tax Act shall file with the Accounting Division of the Tax Department an Employer's Return of West Virginia Income Tax Withheld and remit with said return the full amount of taxes withheld at such time and in such manner as provided in this regulation.

74.1.1. Monthly Returns. - Every employer who withholds more than one hundred dollars ($100) per month must file a monthly return and remit therewith the tax withheld for such month. The due date for the filing of a monthly return shall be on or before the twentieth (20th) day of the succeeding month except for the month of December where the due date of the return shall be on or before the thirty-first (31st) day of January.

74.1.1.1. Where an employer is required to file on a monthly basis, such employer shall continue to file on a monthly basis until the end of the calendar year regardless of the amount of tax withheld. The monthly status of an employer can only be changed by permission of the Tax Commissioner when it can be established that the amount of tax will not exceed one hundred dollars ($100) per month. Such change will only be permitted to be made at the beginning of a calendar year.

74.1.1.2. Monthly returns are required to be filed even though, in any given month, no wages are paid or tax withheld. On such returns, the employer shall state the reason why no West Virginia income tax was withheld on the monthly return.

74.1.1.3. Once a monthly return is required to be filed, an employer must continue to file monthly returns unless the Tax Commissioner has ordered otherwise or until the employer has permanently ceased to pay wages under his current identification number.

74.1.2. Quarterly Returns. - Every employer who withholds less than one hundred dollars ($100) per month must file quarterly returns and remit therewith the tax withheld during each calendar quarter. Quarterly returns are due on or before the last day of the month following the close of each calendar quarter as herein provided:

Period ... Due Date

January 1 to March 31 ... April 30

April 1 to June 30 ... July 31

July 1 to September 30 ... October 31

October 1 to December 31 ... January 31

74.1.2.1. Quarterly returns are required to be filed even though, in any calendar quarter, no wages are paid or tax withheld. On such returns, the employer shall state the reason why no West Virginia income tax was withheld on the quarterly return.

74.1.2.2. Once a quarterly return is required to be filed, an employer must continue to file quarterly returns unless the Tax Commissioner has ordered otherwise or until the employer has permanently ceased to pay wages under his current identification number.

74.1.3. Annual Returns. - Where the aggregate amount of West Virginia income tax withheld by the employer is less than twenty-five dollars ($25) in a calendar quarter and the total amount can reasonably be expected to be less than one hundred dollars ($100) for the entire calendar year, the employer may be granted permission to file his withholding returns annually instead of quarterly. An employer, however, may not withhold on an annual basis unless he has obtained written permission to do so from the Tax Commissioner.

74.1.3.1. The due date for filing an annual return and for remitting tax therewith is January thirty-first (31st) of the succeeding year.

74.1.4. Not withstanding the provisions of Subsections 74.1.1, 74.1.2, 74.1.3, the Tax Commissioner may, if he believes such action necessary for the protection of the revenues, require any employer to make such return and pay to him or to a designated depository the tax deducted and withheld at any time, or from time to time as he deems advisable.

74.1.5. Credits Against Tax Withheld. - A payment of tax withheld pursuant to W. Va. Code '11-21-74 and this regulation may be subject to the credit set forth in W. Va. Code '11-15-9b and the credit set forth in W. Va. Code '11-15A-3b as detailed under Section 43 of these regulations.

74.1.6. Correction Of Over And Under with holding. - Any errors or mistakes in withholding shall be corrected in the same manner as provided for federal withholding tax purposes.

74.1.6.1. If a withholding error is discovered in a subsequent month of the same calendar year, wages and salary payments shall be adjusted in that month.

74.1.6.2. If a withholding error cannot be adjusted on a return for a subsequent return period of the same calendar year, the employer is required to consult the Accounting Division for purposes of determining the proper method of correction.

74.1.6.3. If an error is made on the Employer's Return of West Virginia Income Tax Withheld, a credit or additional payment shall be made on the succeeding return.

74.2. Annual Reconciliation Of Tax Withheld.

74.2.1. The Annual Reconciliation of West Virginia Income Tax Withheld (Form I.T 103) must be submitted by the employer on or before February twenty-eighth (28th) following the close of the calendar year, together with Tax Department copies of all withholding tax statements for the year. Such annual reconciliation must be accompanied by a list, preferably in the form of an adding machine tape or accounting machine listing of the amounts of income tax withheld. This reconciliation is to be submitted separately from the employer's monthly or quarterly return.

74.2.2. Where the number of withholding statements is substantial, they may be forwarded to the Tax Department's Accounting Division in packages of convenient size. When this procedure is followed, the packages should be identified with the name and identification number of the employer and consecutively numbered and the annual reconciliation placed in the package numbered one (1). The number of packages should be indicated on the annual reconciliation.

74.2.3. If an employer's total payroll consists of a number of separate establishments, the withholding statements may be assembled accordingly and a separate list submitted for each establishment. In such case, a summary list should be submitted, the total of which must agree with the corresponding entry made on the annual reconciliation.

74.3. Termination Of Business. - If an employer permanently discontinues or sells his business or permanently ceases to pay wages under his current identification number, withholding returns shall be filed simultaneously with or within thirty (30) days after the filing of the final monthly or quarterly return and shall be accompanied by the adding machine tape or accounting machine listing referred to above. Such last return must be marked "Final Return".

74.3.1. Liability Of Successor. - The successor in business of any employer required under W. Va. Code '11-21-71 and Section 71 of these regulations to deduct and withhold personal income tax from wages who sells out his or its business or stock of goods, or ceases doing business, shall be personally liable for the payment of personal income tax withheld or which should have been withheld plus additions to tax, penalties and interest relating thereto which remain unpaid after expiration of the thirty (30) day period allowed for payment by the predecessor except as provided in Subsection 74.3.1.1 of this regulation.

74.3.1.1. Where a business is purchased in an arms-length transaction, and where the purchaser withholds so much of the consideration for the purchase as will satisfy any withholding tax, additions to tax, penalties and interest which may be due until the seller produces a receipt from the Tax Commissioner evidencing the payment thereof, the purchaser shall not be personally liable for withholding taxes attributable to the former owner of the business unless the contract of sale provides for the purchaser to be liable for some or all of such taxes. The amount of tax, additions to tax, penalties and interest for which the successor is liable constitutes a lien on the property of the successor in accordance with W. Va. Code '11-10-ll(f)(2).

74.3.1.1.a. Purchase price is not limited to cash transferred to the seller, but includes any consideration flowing directly or indirectly to a seller or predecessor.

74.3.1.1.b. The requirement to withhold consideration does not necessarily mean to retain or hold physical assets, but means dealing with the purchase consideration in such a manner as to deny the seller or the predecessor the benefit of the purchase consideration and to make it available to the State for the satisfaction of the tax liability.

74.3.1.2. The term "successor" refers to any person who directly or indirectly purchases, acquires, or succeeds to the business or the stock of goods of any employer quitting, selling, or otherwise disposing of a business or stock of goods. The purchase or acquisition of a business may give rise to successor liability whether the consideration is money, property, assumption of liabilities or cancellation of indebtedness.

74.3.1.3. The liability of a successor arises from any sale, transfer, assignment or other acquisition of a business or stock of goods. A person who purchases or acquires a portion of a business or stock of goods may become liable as a successor where he purchases or acquires substantially all of the business assets or stock of goods.

74.3.1.4. The business assets include the assets of a business pertaining directly to the conduct of the business. Business assets include real property or any interest therein; tangible personal property, including fixtures, equipment and vehicles; and intangible property, including accounts receivable, contracts, business name, business goodwill, customer lists, delivery routes, patents, trademarks or copyrights.

74.3.1.5. If any taxpayer operates more than one business at separate locations, each business location is a separate business and has a separate stock of goods for purposes of determining successor liability. A successor of the business or stock of goods of any business location is subject to liability as a successor with respect to the tax attributable to that location even if he does not purchase the business or stock of goods of all the locations.

74.3.1.6. A change in the form of a business will generally give rise to successor liability, such as the incorporation of a sole proprietorship or partnership, the voluntary or involuntary dissolution of a corporation, the merger or consolidation of two or more corporations, the formation of a partnership from one or more sole proprietorships or corporations; or change in the name of a corporation.

74.3.1.7. Successor liability does not arise in connection with sales or transfers pursuant to assignments for the benefit of creditors, deeds of trust, or security interests, statutory liens, judgment liens unless the previous owner receives purchase money from the transfer or sale. Any business operated under Title 11 of the United States Code, which is purchased or acquired by another person, shall not give rise to successor liability.

74.3.1.8. The liability of a successor extends to taxes incurred in the course of operation of the business by the predecessor, or any prior predecessor. The liability includes all taxes, interest, and additions to tax, whether assessed or unassessed against the predecessor, and without regard to whether a tax lien has been issued or perfected against the predecessor. If any predecessor is given a certificate relating to the tax liability of a prior predecessor, then the successor shall only be liable for the tax liability of his immediate predecessor.

74.4. Use Of Pre-Addressed Forms. - If pre-addressed forms are mailed to the employer by the Accounting Division for use in filing the employer's withholding returns, such pre-addressed forms shall be used by the employer in filing these reports. Where use of such forms is impractical, the employer must exercise extreme care to show the employer's name and identification number exactly as they appear on previously filed returns. Lack of any form or return required under this regulation shall not excuse an employer's failure to file any such form or return.

74.5. West Virginia Employer's Identification Number.

74.5.1. Each employer will be identified by a West Virginia employer's identification number. This identification number will be the same as the federal identification number in every case where the employer has been assigned such a number by the Internal Revenue Service.

74.5.2. In any instance where an employer has not been assigned an identification number for federal purposes and is not required to obtain such a federal number, the employer must notify the Accounting Division which will assign a West Virginia number for his use. If an employer has been assigned an identification number by the Accounting Division and later obtains a federal number, he must notify the Accounting Division of the federal number and he will be notified to discontinue using the West Virginia identification number.

74.5.3. Each employer shall have only one identification number. If an employer has been assigned more than one (1) federal number and has not been advised which to use, he should notify the Internal Revenue Service of the numbers he has, the name and address to which each number was assigned and the address of his principal place of business. The Internal Revenue Service will then advise him which number to use.

74.5.4. An employer who has acquired the business of another employer must not use any identification number assigned to the original employer, but must obtain a new identification number in accordance with this regulation.

74.6. Deposit In Trust For Tax Commissioner. - Whenever any employer fails to collect, truthfully account for, pay over the tax, or make returns of the tax as required under W. Va. Code '11-21-74 and this regulation, the Tax Commissioner may serve a notice requiring such employer to collect the taxes which become collectible after service of such notice, to deposit such taxes within the time specified in such notice in a bank approved by the Tax Commissioner, in a separate account in trust for and payable to the Tax Commissioner, and to keep the amount of such tax in such account until payment over to the Tax Commissioner. Such notice shall remain in effect until a notice of cancellation is served by the Tax Commissioner. Any employer, who, after service of such notice by the Tax Commissioner, fails to comply with the instructions contained therein shall be liable for criminal and civil penalties.

74.6.1. In lieu of the requirement set forth in Subsection 74.6 to deposit the taxes in a separate bank account in trust for and payable to the Tax Commissioner, the notice may require the employer to remit such taxes to a designated officer or employee of the Tax Commissioner.

W. Va. Code R. § 110-21-74