W. Va. Code R. § 110-41-5

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

Section 110-41-5 - Application for credit for sales tax liability paid to another state, prerequisites, required information and calculation of credit

5.1. The credit under W. Va. Code § 11-15A-10a is only applicable for the tax actually paid by the taxpayer which exceeds the taxpayer's portion of the $4,300,000 cap.

5.1.a. The taxpayer's portion of the $4,300,000 of motor fuel variable rate component paid and refunded, is not subject to the application for credit under W.Va. Code § 11-15A-10a. In other words, only the amount of motor fuel tax actually paid above the $4,300,000 refunded amount is subject to the application for credit.

5.1.b. In years where the cap is not exceeded, no requests for credit for sales tax paid to another state as defined in W. Va. Code § 11-15A-10a will be granted.

5.2. As required by W. Va. Code § 11-15A-10a, the sales tax must be lawfully paid to another state as a prerequisite for application for the sales tax credit.

5.3. To determine the amount of credit for sales tax actually paid to another state, the Tax Department will apply the following steps:

5.3.a. Multiply all gallons of fuel upon which tax was paid in other states by the taxpayer's West Virginia apportionment factor.

5.3.b. Multiply gallons upon which credit can be taken by the lesser of the West Virginia fuel tax rate or the amount of tax actually paid per gallon. The product of ((a X b) X Min (c,d)) is the potential credit.

5.3.c. Multiply the potential credit by a factor:

5.3.c.1. The numerator of which is the difference between the total gallons used in West Virginia and the total amount of gallons upon which the railroad diesel locomotive exemption applied.

5.3.c.2. The denominator of which is the total amount of gallons used in WV.

5.3.c. The result is the amount of credit allowed for tax paid to other states.

5.3.d. The result of 5.3.c is the amount of credit allowed for tax paid to other states.

5.3.e. The above four steps are represented algebraically as:

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Where:

a = Gallons upon which tax was paid to other states

b = West Virginia apportionment factor

c = West Virginia motor fuel variable tax rate

d = Actual rate paid per gallon

e = Total Gallons used in West Virginia

f = Gallons exempt due to railroad diesel locomotive exemption.

5.4. To apply for the credit for sales tax paid to another state, the information above must be timely filed along with the MFT-USE report and payment for each quarter.

5.4.a. That is, all information for the previous quarter must be provided by the due date of the return for that quarter as set out in section 4.

5.4.b. The number of gallons upon which tax was paid to other states is the actual number of gallons, not an estimate and not an average.

5.4.c. The actual rate paid per gallon is to be reported, not an estimate or average rate.

W. Va. Code R. § 110-41-5