The West Virginia House Finance Committee is considering a proposed bill that would prohibit municipalities from imposing a local business and occupation (B&O) tax on certain business activities. Under H.B. 4567, February 7, 2022, municipalities would be barred from imposing the B&O or privilege tax on any business activity or occupation where the basis of the tax is derived from products being shipped into or sold in the municipality.
Generally, the privilege tax is assessed at the local level as a gross receipts tax on business activities. The proposed amendments to § 8-13-5 of the Code of West Virginia would place restrictions on the imposition of the tax on the business of selling used cars. Sales proceeds from the sale of new automobiles that have never been registered in the name of an individual would be exempt from the municipal B&O or privilege tax under the proposal.
The proposed amendments also provide that if the business activity is carried on in two or more municipalities, the gross proceeds from the business would only be taxable by the municipality in which the business activity has its principal place of business. If enacted, the effective date of these provisions would be July 1, 2022.
We will keep you updated as this bill progresses through the legislative process.
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Mark L. Nachbar
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