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 110-15-8a - Contracting Services

8a.1. Persons engaged in the business of providing contracting services to other persons are providing a service that is generally not subject to the consumers sales and service tax. Such persons are generally considered to be the user or consumer of all tangible personal property and all services which they purchase. Consequently consumers sales and use taxes must be paid on all purchases of tangible personal property or taxable services except as otherwise provided in these regulations.

8a.2. The terms "contracting services" and "contracting" are synonymous. Thus, the term "contracting services" means the furnishing of work or both materials and work, for another in fulfillment of a contract for the construction, alteration, repair, decoration or improvement of a new or existing building or structure or any part thereof or for the removal or demolition of a building or structure or any part thereof or for the alteration, improvement or development of real property. Beginning July 1, 1989, the form of the contract no longer controls whether a person is providing a tax exempt contracting service or is providing a taxable service. The question in every case will be what is being done, not how is it being billed.

8a.3. Additionally, the definition of "contracting" is narrowed beginning July 1, 1989. For contracts entered into on or after July 1st, the work must result in a capital improvement to a building or other structure or to real property for the work to be contracting. If this condition is not met, the work provided is a taxable service, not contracting. When a taxable service is provided, consumers sales and service tax must be charged to and collected from the customer, but the vendor may purchase materials that will be used or consumed in making the taxable service free from consumers sales and use taxes by presenting a resale exemption certificate to the vendor.

8a.4. Not all activity of a contractor is treated as contracting for consumers sales and use tax purposes. For example:

8a.5. A capital improvement is an alteration, repair, decoration or improvement of a building or structure or the alteration, improvement or development of real property:

8a.6. A "retailer dealer" merchant who agrees to sell from the inventory of his general or special store certain types of tangible personal property and to install the same, or to arrange for its installation, is not a contractor with respect to such sale and installation when the installation is merely incidental to the sale of the tangible personal property. See Section 114 of these regulations for detailed information on sales of certain tangible personal property with incidental installation by "retail dealers."

8a.7. For additional information about the tax liability of contractors see Sections 107 through 122 of these regulations.