West Virginia Code of State Rules
Agency 110 - Tax
Title 110 - LEGISLATIVE RULE STATE TAX DEPARTMENT
Series 110-26 - Municipal Business And Occupational Tax
Section 110-26-2c - Selling Tangible Property; Exempt Sales

2c.3.1. "Selling at Wholesale" and "Wholesale Sales" shall mean and include:

2c.3.2. Sales of tangible personal property made to purchasers who are going to resell property in the form of tangible personal property are sales at wholesale by the vendor, regardless of where the purchaser sells such property. To illustrate: A distributor in the municipality sells kitchen products (pots, pans, knives, etc.) to a vendee who intends to resell such products without the municipality. The distributor shall report the gross income from such sale under the wholesale classification; for it is immaterial that the vendee intends to make sale of the property outside the municipality. To qualify as a wholesale sale for the taxable status of the vendor, it is only necessary that the vendor be appraised by the vendee that he (the vendee) is purchasing tangible personal property to be resold in the form of tangible personal property.

2c.3.3. Sales of tangible personal property which property is not resold in the same form by the vendee are also sales at wholesale if the vendee directly uses or consumes such property in a business or activity which is subject to municipal business and occupation tax. To illustrate: A vendor sells pens, paper, etc., to a manufacturer who will consume such products in the conduct of his manufacturing operation. Said sale is deemed to be at wholesale for purposes of the vendor's municipal business and occupation tax liability for the purchaser intends to use the purchased goods in a business activity subject to municipal business and occupation tax. If the vendor had made such sale to an Ohio manufacturer who has no business activity within this State subject to this State's municipal business and occupation tax, such sale, for the vendor's tax status, is nevertheless at wholesale.

2c.4.1. All sales made to ultimate consumers and sales that are not wholesale sales are sale made at retail, and the gross income therefrom must be reported under the retail classification of the municipal business and occupation tax form.

2c.4.2. An ultimate consumer is one who purchases goods for his own personal use and who does not engage in the business of selling such goods in the form of tangible personal property and who does not consume such goods in the conduct of a business which would be subject to this States municipal business and occupation tax if it were carried on in a municipality imposing such a tax.

2c.4.3. All sales of real estate (such as by a speculative builder) are sales at retail and must be reported accordingly. On sales of realty, the status of the purchaser or the intention or use made of the property by the purchaser is of no consequence to the vendor's tax status. To illustrate: A speculative builder constructs apartment buildings which he later sells to a West Virginia municipality, such sale must be reported at retail on the tax return of the speculative builder.

2c.4.4. Casual sales of real estate are not taxable to the vendor.

2c.4.5. Sales of tangible personal property made by vendors to persons engaging in exempt business activities (agriculture, horticulture, grazing) are not exempt sales and the gross income derived from such sales must be reported by the vendor under the retail classification. This rule results from the fact that the purchaser (farmer, etc.) is not engaged in a business subject to the municipal business and occupation tax.

2c.4.6. All sales made through vending machines are sales at retail. The term "Vending Machines" means and includes only those machines which, through the insertion of a coin of a specified amount, will return to the vendee a predetermined specific article of merchandise. It includes, but is not limited to, machines which vend cigarettes, toilet articles, sandwiches, beverages, candies, confections, et cetera.

2c.5.1. Sales by any person engaging in the business of horticulture, agriculture or grazing are not taxable under either the wholesale or retail classification. These sales, to be exempt from municipal business and occupation tax, must be made by the taxpayer of products he has grown and produced in the business of horticulture, agriculture or grazing and not of products which he purchases from others. To illustrate: A florist who purchases flowers and shrubbery from a horticulturist and resells the same to the public is deemed to be making sales at retail and such sales do not fall within this exemption. The sales made by the horticulturist (one who grows his own) to the florist are not taxable sales and, of course, come within this exemption. If the florist grows any of his own stock and makes sale of the same, he is not taxable on such sales.

2c.5.2. The exemption contained herein does not extend to all business activities of the person making exempt sales but is limited to sales of his own products. The gross income from any other business activities of such person must be reported under the applicable classification on the municipal business and occupation tax return. To illustrate: A farmer who leases or rents his equipment to other farmers must report his gross rental income under the rental classification. Also, persons who manufacture, compound or prepare their own products (before sale thereof) into new, useful or different products become liable under the manufacturing classification on the tax return. For example, A raises dairy cows and produces milk therefrom which he sells to supermarkets. The sale of such milk is an exempt sale since the milk was produced by A from his own herd. (Pasteurization and homogenization are not manufacturing processes under this tax.) If A, rather than selling a portion of his milk, makes butter, cheese or ice cream from such milk, he is engaged in the business of manufacturing and must report the gross income from such products under the manufacturing classification.

2c.5.3. Sales of stocks, bonds or other evidences of indebtedness are not sales at either wholesale or retail and are therefore exempt from such classifications. However, income, fees or commissions derived from buying and selling the same for others must be reported under the appropriate classification.