W. Va. Code R. § 110-26-11

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

Section 110-26-11 - Doing Business Within And Without The Municipality

11.1. Persons domiciled outside a municipality who (a) lease tangible personal property to lessees in the municipality, or (b) perform construction or installation contracts in the municipality, or (c) render services to others therein, are doing business in the municipality, irrespective of the domicile of such persons and irrespective of whether or not such persons maintain a permanent place of business in the municipality.

11.2. Persons domiciled outside a municipality who sell tangible personal property to persons in the municipality, may be doing business in the municipality, irrespective of the domicile of such persons and irrespective of whether or not such persons maintain a permanent place of business in the municipality.

11.3. Persons domiciled in and having a place of business in a municipality, who (a) sell or lease personal property to buyers or lessees outside the municipality, or (b) perform construction or installation contracts outside the municipality, or (c) render services to others outside the municipality, are doing business both within and without the municipality. Whether or not such persons are subject to municipal business and occupation tax under the law depends upon the kind of business and the manner in which it is transacted. The following general principles govern in determining tax liability under the municipal business and occupation tax.

11.3.1. When the business involves a construction or installation contract in the municipality, no deduction from the measure of the tax is permitted, even though the contractor is domiciled outside the municipality and maintains a place of business outside the municipality which may contribute to the contract performed in the municipality.

11.3.2. When the business involves a construction or installation contract outside the municipality, the tax does not apply to any part of the income derived therefrom (except such part of the income as may be applicable to the manufacturer in the municipality by the contractor of articles used or incorporated in such construction or installation), even though the contractor is domiciled in the municipality and maintains a place of business therein which may contribute to the contract performed outside the municipality.

11.3.3. When the business involves a transaction taxable under the service classification, the tax does not apply upon any part of the gross income received for services incidentally rendered to persons in the municipality by a person who does not maintain a place of business in the municipality and who is not domiciled therein. However, the tax applies upon the income received for services incidentally rendered to persons outside the municipality by a person domiciled therein who does not maintain a place of business within the jurisdiction of the place of domicile of the person to whom the service is rendered.

11.3.4. For example, persons domiciled in a municipality, but having no place of business outside the municipality, are taxable upon the following types of income:

11.3.4.1. An insurance agency upon commissions received for insurance placed outside the municipality;

11.3.4.2. An attorney upon fees received from persons outside the municipality, even though a portion of his services were necessarily performed without the municipality;

11.3.4.3. A collection agency upon income received from clients without the municipality or with respect to collections made from persons without the municipality;

11.3.4.4. An accountant upon income received from persons for services performed without the municipality;

11.3.4.5. An investment company upon income received from loans placed without the municipality;

11.3.4.6. A commodity broker upon commissions received from persons without the municipality;

11.3.4.7. An advertising agency upon income received from advertising solicited and secured from firms without the municipality;

11.3.4.8. An employment agency upon income received for securing employees for firms without the municipality;

11.3.4.9. A physician upon income received from the treatment of patients without the municipality;

11.3.4.10. A purchasing agency upon commissions received from clients without the municipality or with respect to purchases made without the municipality.

11.3.5. Conversely, persons engaged in business without the municipality, but having no place of business within the municipality, are not taxable with respect to the reverse of the above situations. It is assumed, of course, that such services, to avoid taxation, are rendered only incidentally to persons within the municipality.

11.3.6. Persons engaged in a business taxable under the service classification and who maintain places of business both within and without the municipality which contribute to the performance of a service, shall apportion to the municipality that portion of gross income derived from services rendered by them in that municipality. Where it is not practical to determine such apportionment by separate accounting methods, the taxpayer shall apportion to each the proportion of total income which the cost of doing business within each bears to the total cost of doing business within and without each municipality.

W. Va. Code R. § 110-26-11