W. Va. Code R. § 110-15-60
Current through Register Vol. XLI, No. 45, November 8, 2024
Section 110-15-60 - Employee or Independent Contractor60.1. Services rendered by an employee to his or her employer are exempt from the consumers sales and service tax and use tax. On the other hand, services rendered by an employee to his or her employer which do not fall within the scope of the employee-employer relationship or the contract of employment, and services rendered by independent contractors are subject to the consumers sales and service tax and use tax unless some other exemption provision in Section 9 of these regulations applies.60.2. There may be situations where the issue is whether a person is an employee or an independent contractor. Generally, the relationship is that of employer-employee if the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work, but also as to the details and means by which the result is accomplished.60.3. Following are factors to be considered when determining the nature of the relationship. The factors are designed to be only guidelines and where appropriate, the Tax Department will look beyond the formal aspects of the relationship to determine its substance. 60.3.1. Instructions. - A worker who is required to comply with other persons' instructions about when, where, and how he or she is to work is ordinarily an employee.60.3.2. Training. - Requiring a worker to receive training shows that the person or persons for whom the services are performed want the services performed in a particular way.60.3.3. Integration. - Integrating the worker's services into the business operations generally shows that the worker is subject to direction and control.60.3.4. Services Rendered Personally. - This shows the person for whom the services are performed is interested in the methods used to accomplish the work as well as the results, and indicates the person exercises control.60.3.5. Hiring, Supervising, and Paying Assistants. - If a person for whom services are performed hires, supervises, and pays assistants, this generally shows control over the workers on the job. But if one worker hires, supervises, and pays the other assistants pursuant to a contract under which the worker agrees to provide materials and labor and under which the worker is responsible only for the attainment of a result, then this indicates an independent contractor status.60.3.6. Continuing Relationship. - This indicates an employer-employee relationship. It may exist where work is performed at frequently recurring although irregular intervals.60.3.7. Set Hours of Work. - This is a factor indicating control.60.3.8. Full Time Required. - Shows control over the amount of time the worker spends working and impliedly restricts the worker from doing other gainful work. An independent contractor, on the other hand, is free to work when and for whom he or she chooses.60.3.9. Doing Work on Employer's Premises. - Control over the place of work is indicated when the person or persons for whom the services are performed have the right to compel the worker to travel a designated route, to canvass a territory within a certain time, or to work at specific places as required.60.3.10. Order or Sequence Set. - If the person for whom the services are performed has the right to establish the routines and schedules to be followed, that right is a factor indicating control.60.3.11. Oral or Written Reports. - A requirement that the worker submit regular or written reports to the person for whom services are rendered indicates a degree of control.60.3.12. Payment by Hour, Week, Month. - This indicates an employer-employee relationship provided it's not just a convenient way of paying a lump sum agreed upon as the cost of a job. Payment made by the job or on a straight commission generally indicates that the worker is an independent contractor.60.3.13. Payment of Business and Traveling Expenses. - An employer, to be able to control expenses, generally retains the right to regulate and direct the worker's business activities.60.3.14. Furnishing Tools and Materials. - Tends to show an employer-employee relationship.60.3.15. Significant Investment. - If a worker invests in facilities that he uses in a performing service and that are not typically maintained by employees (such as maintaining an office rented at fair market value from an unrelated party), that factor tends to indicate that the worker is an independent contractor. Special scrutiny is required for certain types of facilities, such as home offices.60.3.16. Realization of Profit or Loss. - For example, if the worker is subject to a real risk of economic loss due to significant investments or a bona fide liability for expenses, such as salary payments to unrelated employees, that factor indicates that the worker is an independent contractor.60.3.17. Working for More Than One Firm at a Time. - This generally indicates an independent contractor status. However, a worker who performs services for more than one person may be an employee of each of the persons, especially where such persons are part of the same service arrangement.60.3.18. Making Service Available to General Public. - Doing so on a regular and consistent basis indicates an independent contractor relationship.60.3.19. Right to Discharge. - This is a factor indicating that the worker is an employee and the person possessing the right to discharge is an employer. An independent contractor cannot be fired so long as he produces a result that meets the contract specifications.60.3.20. Right to Terminate. - If a worker has the right to quit at any time without incurring liability, this indicates an employer-employee relationship.60.4. Temporary Employment Agencies. - Persons hired by employers through temporary employment agencies are not considered to be employees within the scope of the exemption. Instead, the temporary employment agency is considered to be rendering services to the employer which are subject to consumers sales and service tax unless some other provision in Section 9 of these regulations applies.W. Va. Code R. § 110-15-60