West Virginia Code of State Rules
Agency 110 - Tax
Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT
Series 110-15 - Consumer Sales And Service Tax And Use Tax
Section 110-15-33 - Persons Rendering Services

33.1.1. When the service is physically dispensed, rendered or provided in this State, that service is provided by a person engaging in business in this State regardless of whether such person does or does not have a permanent place of business in this State.

33.4.1. Contracting services.

33.4.2. Professional services.

33.4.3. Services rendered by an employee to his employer that fall within the scope of the employee's employment contract.

33.4.4. Public utility services.

Example. ABC Company is engaged in this State in manufacturing silver coffee and tea sets, silverware, silver trays and silver bowls. It will also resilver these items. A customer located in the State of Ohio mails her silver tray to ABC Company for it to be resilvered. As an indispensable part of the transaction, the silver tray is to be returned after the work is done to the customer by mail. The charge for this service is charged to the customer's bank card account number. No West Virginia consumers sales and service tax will be charged to the Ohio customer. If the Ohio customer had taken delivery of the resilvered tray in this State, then the charge to this customer would include West Virginia's consumers sales and service tax.

33.4.5. A service which is purchased for resale. A service is purchased for resale when it is subcontracted by the person who is contracted to perform the service, for example:

Example 1. X is a printer and enters into a contract with Y to print 500 bulletins. X subcontracts the job to Z. Z prints the 500 bulletins for X. There is no tax on the contract between X and Z since X is purchasing the printing service from Z for resale to Y. In this transaction Y provides the paper upon which the bulletins are printed.

Example 2. B owns a used car lot. E purchases an automobile from B. As a condition of such sale B agrees to make repairs to the automobile. However, B subcontracts such repair work to C. E has agreed to pay B for the repair services and for the sale price of the automobile. Under these circumstances, the repair services furnished by C to B constitute a sale of such service to B for resale to E who is the consumer of the services.

Example 3. B owns an auto repair shop and C brings an automobile in to have the air conditioning fixed. B is unable to fix the unit so the car is sent to G who is an air conditioning specialist. The sale of G's service to B is a sale for resale by B to C.

33.6.1. The tax on services is basically a tax on labor. When such services result in a capital improvement to a building, structure, or real property or are performed "on or connected with" new construction, reconstruction, alteration, expansion or remodeling of real property or structures which work results in a capital improvement thereto, such services are exempt from tax as contracting services. This would not include, however, the repair of the contractor's machinery or equipment on the job site or any other service that does not fall within the definition of contracting.

33.6.2. Repairs that result in a capital improvement to a building or other structure or to real property are tax exempt contracting services. All other repairs are services subject to consumers sales and service tax. The difference between a repair which is not a capital improvement to a building or other structure or to real property (which is a repair subject to the consumers sales and service tax) and a repair which constitutes an improvement to a building or other structure or real property (which is a tax exempt contracting service) can often times be difficult. Therefore, the intent of the parties and the scope of the project may become the factors which determine whether the services are taxable or exempt. See Section 115 of these regulations for detailed information on determining whether repair of tangible personal property constitutes a taxable service or contracting. See Section 116 of these regulations for detailed information on determining whether repair of a structure, building or real property constitutes a taxable service or contracting.

33.6.3. "Repair" is synonymous with mend, restore, maintain, replace and service. A repair contemplates an existing building or structure or thing which has become imperfect and constitutes restoration of the original property which has been lost or destroyed. A repair is generally not a capital improvement when it does not materially add to the value or substantially prolong the original useful life of the property.

33.6.4. A person who makes repairs to a building or entire other structure or to real property that are not capital improvements thereto and also sells tangible personal property in connection with such taxable services must collect and remit consumers sales and service tax on the entire gross receipts from the entire transaction. A person making taxable repairs may purchase tangible personal property for resale when the property used in the repair job is resold to the customer. Non-exclusive examples of taxable repair situations include the following:

Repair of broken or defective glass.

Replacement of broken windowpanes.

Replacing individual or damaged roof shingles.

Replacing or repairing a portion of worn out or broken kitchen cabinets.

Replacement of garage door hinges.

Replacing or repairing a portion of a broken or worn tub, shower, or faucets.

Replacing or repairing a portion of a broken water heater, furnace or central air conditioning compressor.

33.6.5. The following are examples of repairs which constitute capital improvements to a building or other structure or to real property. This list is non-exclusive:

The building of a garage or adding a garage to an existing building is considered a capital improvement.

Adding a redwood deck to an existing structure is considered a capital improvement.

Replacing the entire roof on an existing structure is considered a capital improvement.

Adding a new room to an existing building is considered a capital improvement.

Adding a new room by building interior walls is considered a capital improvement.

Replacing kitchen cabinets with some other modifications is considered a capital improvement.

Paneling existing walls is considered a capital improvement.

Laying a new floor over an existing floor is considered a capital improvement. (See special rules for carpeting and other floor coverings sold and installed by retailers.)

Rebuilding a structure damaged by flood, fire or other uncontrollable disaster or casualty is considered to be a capital improvement.

Building a new wing to an existing building is considered a capital improvement.

Rearranging the interior structure of a building is considered a capital improvement.

In all of these examples, the contractor is responsible for paying consumers sales and service tax to any vendor of the materials.

33.6.6. The term "on or connected with" as used in Section 33.6.1 of these regulations is broad and conveys its generally accepted meaning. Therefore, in a specific situation, the facts relating thereto are controlling in determining whether the service is contracting or is a taxable service. "On or connected with" does not connote that things connected have to be primary or subsidiary to the construction, reconstruction, alteration, expansion or remodeling of the building or other structure or real property. An incidental relationship can qualify the activity as contracting if the relationship forms an immediate connection with the construction activity.

33.6.7. Other Factors.