Current through Register Vol. XLI, No. 38, September 20, 2024
14a.1. Every person doing business in the
State of West Virginia or storing, using, or otherwise consuming tangible
personal property purchased from a vendor, and every lessor and lessee of
tangible personal property used in this State shall keep complete and accurate
records as are necessary for the Tax Commissioner to determine the liability of
each vendor or vendee for consumer sales and use tax purposes. Unless the Tax
Commissioner authorizes, in writing, an alternative method of record keeping,
these records shall show:
14a.1.1. Receipts
from sales and leases of tangible personal property and from sales in this
State of services, regardless of whether the vendor believes the receipts to be
taxable or non-taxable;
14a.1.2.
All deductions allowed by law and claimed in filing returns;
14a.1.3. Total purchase price of all tangible
personal property purchased for sale, consumption or lease in this State, and
the total price of all services purchased for sale or consumption in this
State;
14a.1.4. All exemption
certificates;
14a.1.5. All direct
pay permit numbers and all material purchase certificate numbers;
14a.1.6. A true and complete inventory taken
at least once a year.
14a.2. Each record shall consist of the
normal books of account ordinarily maintained by the average prudent person
engaged in the activity in question, including bills, receipts, invoices, cash
register tapes, or other documents of original entry supporting the entries in
the books of account, and all schedules or working papers used in connection
with the preparation of tax returns.
14a.3. Each record may be microfilmed or
microfiched, as long as the microfilm or microfiche records are authentic,
accessible, and readable and the following requirements are fully satisfied:
14a.3.1. Each taxpayer shall provide
transcriptions of any information concerning consumers sales or use tax
liability on microfilm or microfiche which may be required to verify liability.
The taxpayer shall also provide appropriate facilities for preservation of the
microfilm or microfiche for the periods required.
14a.3.2. All microfilmed and microfiched data
shall be indexed, cross-referenced and labeled to show beginning and ending
alphabetical listing of documents, and beginning and ending numbers. All
microfilm and microfiched data shall be systemically filed to permit reasonable
access.
14a.3.3. Each taxpayer
shall make available upon request of the Tax Commissioner or the Tax
Commissioner's authorized agent, a reader-printer in good working order, at the
examination site, for reading, locating and reproducing any record concerning
consumers sales or use tax liability maintained on microfilm or
microfiche.
14a.3.4. Each taxpayer
shall set forth in writing the procedures governing the microfilm or microfiche
system and the individual or individuals responsible for maintaining and
operating the system.
14a.3.5. Each
taxpayer shall maintain a complete microfilm or microfiche system and shall
consistently use the system in the regular course of business.
14a.3.6. Each taxpayer shall establish
appropriate documentation of procedures so that the original document can be
followed through the microfilm or microfiche system.
14a.3.7. Each taxpayer shall establish
internal procedures for microfilm or microfiche inspection and quality
assurance.
14a.3.8. Each taxpayer
shall be responsible for the effective identification, processing, storage, and
preservation of microfilm or microfiche for a period of at least three (3)
years from the last day of the calendar year during which the transaction
occurred.
14a.3.9. Each taxpayer
shall keep a record identifying the person or business entity that produced the
microfilm or microfiche records.
14a.3.10. When displayed on a microfilm or
microfiche reader or viewer, or reproduced on paper, the material shall exhibit
a high degree of legibility. For this purpose, legibility is defined as the
quality of a letter or numeral that enables the observer to identify it
positively and quickly to the exclusion of all other letters or numerals being
recognizable as words or complete numbers.
14a.3.11. All production of microfilm or
microfiche and processing duplication, quality control, storage,
identification, and inspection shall meet industry standards.
14a.4. An automated data
processing tax accounting system may be used by the taxpayer to preserve
consumers sales and use tax records required for the verification of tax
liability. An automated data processing system shall include a method of
producing legible records which will provide the necessary information for
verifying tax liability. Each taxpayer maintaining records on an automated data
processing system shall satisfy the following requirements:
14a.4.1. Automated data processing records
shall provide an opportunity to trace any transaction back to the original
source or forward to a final total. If detailed printouts are not made of
transactions at the time they are processed, the systems shall have the ability
to reconstruct these transactions.
14a.4.2. A general ledger, with source
references, shall be written out to coincide with financial reports for tax
reporting periods. When subsidiary ledgers are used to support the general
ledger accounts, the subsidiary ledgers shall also be written out
periodically.
14a.4.3. An audit
trail shall be designed so that the details underlying the summary accounting
data may be identified and made available to the Tax Commissioner or the Tax
Commissioner's authorized agent. The system shall be designed so that
supporting documents, such as sales invoices, purchase invoices, and credit
memoranda are readily available.
14a.4.4. Each taxpayer shall make available a
description of the automated data processing portion of the accounting system.
The statements and illustrations as to the scope of operations shall be
sufficiently detailed to indicate:
14a.4.4.1.
The application being performed;
14a.4.4.2. The procedures employed in each
application, such as flowcharts or block diagrams; and
14a.4.4.3. The controls used to ensure
accurate and reliable processing. Important changes, together with their
effective dates, shall be noted in order to preserve an accurate chronological
record.
14a.4.5. Adequate
record retention facilities shall be available for storing tapes and printouts,
as well as all supporting documents as may be required by the consumers sales
and use tax laws and these regulations.
14a.5. All records of a vendor or consumer
pertaining to transactions involving consumers sales or use tax liability shall
be preserved for a period of at least three years from the last day of the
calendar year during which the transaction occurred.
14a.6. The foregoing records shall be
available for and subject to inspection by the Tax Commissioner or the Tax
Commissioner's authorized agents and employees, at all times during business
hours of the day.
14a.7. If any
taxpayer fails to substantially comply with the requirements of this
regulation, the Tax Commissioner shall impose the penalty provided for in W.
Va. Code ''11-10-18(c) or (d), as appropriate.
