W. Va. Code R. § 110-15-9

Current through Register Vol. XLI, No. 45, November 8, 2024

Section 110-15-9 - Exemptions

9.1. General. - Certain types of transactions are exempt from the consumers sales and service tax and the use tax. The question of whether an exemption is applicable is determined by the nature of the tangible personal property or service being sold, purchased or used; how the property or service is being used; or the status of the vendor, purchaser or user. The exemptions allowed by law are classified in Sections 9.2, 9.3, 9.4 and 9.5 of these regulations; and the words "gasoline and special fuel" are defined in Section 2 of these regulations.

9.2. Per Se Exemptions. - The following sales and purchases of tangible personal property or services are exempt per se from the consumers sales and service tax and the use tax, meaning that no exemption certificate, material purchase certificate or direct pay permit is required to claim any of the following exemptions:

9.2.1. Sales of gas, steam and water when delivered to consumers through mains or pipes. Therefore, sales of bottled gas, bottled water, etc., do not qualify for this exemption.

9.2.2. Sales of electricity.

9.2.3. Sales of other public services which are subject to regulation by the West Virginia Public Service Commission.

9.2.4. Sales of textbooks required to be used in any of the schools of the State, public or private, or in any institution in this State which qualifies as a nonprofit or educational institution subject to the West Virginia Department of Education or West Virginia Board of Regents, regardless of whether such textbooks are sold directly to such schools or to a student enrolled in such schools: Provided, That the vendor must retain proof that the book is a required textbook and that the purchaser is currently enrolled as a student at the school where the textbook is required.

9.2.5. An isolated transaction (as defined in Section 2) in which any taxable service or tangible personal property is sold, transferred, offered for sale, or delivered by the owner thereof or by his representative for the owner's account, such sale, transfer, offer for sale or delivery not being made in the ordinary course of repeated and successive transactions of like character by such owner or on his account by such representative: Provided, That an owner who sells, transfers or offers for sale tangible personal property in an isolated transaction through an auctioneer need not collect the tax from either the auctioneer or the purchaser. To illustrate: A person who is not engaged in the business of selling furniture sells his used household furniture. Since such person is not regularly engaged in selling to the public, his sale of used furniture is an isolated transaction upon which no consumers sales and service tax or use tax is imposed. For sales by an auctioneer, See Section 86 of these regulations.

9.2.6. Sales of newspapers when delivered to consumers by route carriers. All other sales of newspapers are taxable, unless the transaction is exempt under some other provision of this Section.

9.2.7. Sales of drugs dispensed upon prescription and sales of insulin to consumers for medical purposes. See Section 92 of these regulations.

9.2.8. Sales of services performed by licensed day care centers or registered day care centers as that phrase is defined in Section 2 of these regulations. This exemption does not include sales of tangible personal property and services to a day care center; such sales are taxable unless exempt under some other provision of this Section. Even though the organizations and activities referenced in subsections 2.25.1, 2.25.2, 2.25.3 and 2.25.4 of these regulations are not classified as "day care centers, the services provided by such organizations may be exempt under another exemption. For example, sales of babysitting services may be exempt as casual and occasional sales or isolated transactions.

9.2.9. Sales of West Virginia lottery tickets and materials by licensed lottery sales agents and lottery retailers authorized by the West Virginia Lottery Commission, under the provisions of W. Va. Code '29-22-1 et seq., provided the materials sold relate directly to the lottery. Tangible personal property and services sold by a licensed lottery sales agent or a lottery retailer which are not directly related to the operation of the lottery are taxable unless exempt from tax under some other provision of this Section.

9.2.10. Leases of motor vehicles titled pursuant to the provisions of W. Va. Code '17A-3-1 et seq. to lessees for a period of thirty (30) or more consecutive days. This exemption shall apply to leases executed on or after July 1, 1987, and to payments under long-term leases executed before July 1, 1987, for months beginning on or after such date.

9.2.11. Sales of food intended for human consumption when sold by the following organizations in the manner indicated are exempt:

9.2.11.1. Food sold by public or private schools, school sponsored student organizations, or school sponsored parent-teacher associations to students enrolled in such school or to employees of such school during normal school hours; but not those sales of food made to the general public. See Section 126 of these regulations.

9.2.11.2. Food sold by a public or private college or university or by a student organization officially recognized by such college or university to students enrolled at such college or university when such sales are made on a contract basis so that a fixed price is paid for consumption of food products for a specific period of time without respect to the amount of food product actually consumed by the particular individual contracting for the sale and no money is paid at the time the food product is served or consumed. See Section 70 of these regulations.

9.2.11.3. Food sold by a nonprofit organization or a governmental agency under a program to provide food to low-income persons at or below cost. For further information, See Section 126 of these regulations.

9.2.11.4. Food sold in an occasional sale by a charitable or nonprofit organization, including volunteer fire departments and rescue squads, if the purpose of the sale is to obtain revenue for the functions and activities of the organization and the revenue so obtained is actually expended for that purpose.

9.2.11.5. Food sold by any religious organization at a social or other gathering conducted by it or under its auspices, if the purpose in selling the food is to obtain revenue for the functions and activities of the organization and the revenue obtained from selling the food is actually used in carrying on such functions and activities: Provided, That purchases made by such organizations shall not be exempt as a purchase for resale.

9.2.11.6. Sales of food by little leagues, midget football leagues, youth football or soccer leagues and similar types of organizations including scouting groups and church youth groups if the purpose in selling the food is to obtain revenue for the functions and activities of the organization and the revenues obtained from selling the food is actually used in supporting or carrying on functions and activities of the groups: Provided, That such purchases made by such organizations shall not be exempt as a purchase for resale.

9.2.11.6.1. This exemption is effective whether the sale of food occurs at the sporting event or through a separate fund-raising event.

9.2.12. Sales of tangible personal property or services purchased after September 30, 1987, and lawfully paid for with food stamps pursuant to the Federal Food Stamp Program codified in 7 U.S.C. 2011, et seq., as amended, or with drafts issued through the West Virginia special supplemental food program for women, infants and children (WIC) as codified in 42 U.S.C. 1786. Such tangible personal property or services include, but are not necessarily limited to the following:

9.2.12.1. "Food" as defined in Section 2 of these regulations.

9.2.12.2. Seeds and plants for growing in gardens to produce food for personal consumption by eligible households.

9.2.12.3. Deposits on returnable bottles or other returnable containers which are part of the cost of the food contained therein.

9.2.12.4. Distilled water and ice unless specifically labeled for nonfood use.

9.2.13. Sales of tickets for activities sponsored by elementary and secondary schools located within this State. This exemption does not include activities sponsored by other organizations, which merely occur on school property and are not sponsored directly by such school.

9.2.14. Sales of radio or television broadcasting time, and sales of advertisements of goods and services in preprinted advertising circulars, and magazines, newspapers and outdoor advertising space: Provided, That pre-printed advertising circulars shall include purchase of direct-mailing advertising services, and space in home shoppers guides, and newspaper supplements and inserts, but does not include wholesale and retail catalogs through which tangible personal property and services may be directly ordered.

9.2.15. Personal services, as defined in Section 2.

9.2.16. Professional services, as defined in Section 8.

9.2.17. Contracting services, as defined in Section 2.

9.2.18. Services rendered by an employee to his or her employer. See Section 60 of these regulations, Employee or Independent Contractor.

9.2.19. Sales of tangible personal property or taxable services in this State, or the use in this State of tangible personal property or services, which this State is prohibited from taxing under its consumers sales and service tax and use tax laws by the United States Constitution, controlling federal law, the Constitution of this State or some controlling provision of West Virginia law not found in the consumers sales and service tax and use tax laws, such as, for example, sales by credit unions under W. Va. Code '31-10-33, the sale of services by owners, trainers or jockeys which are essential to the effective conduct of a horse or dog racing meeting under W. Va. Code '19-23-12, or the commission of an auctioneer licensed under W. Va. Code '19-2C-1 et seq.: Provided, That the vendor shall maintain adequate documentation to show the sale is not subject to the consumers sales and service tax and use tax.

9.2.20. Charges for room and meals by fraternities and sororities to their members: Provided, That purchases of food for meals made by a fraternity or sorority shall not be exempt as a purchase for resale. See Section 70 of these regulations for further clarification.

9.2.21. Sales of or charges for the transportation of passengers in interstate commerce.

9.2.22. Casual and occasional sales (as defined in Section 2) of property or services not conducted in a repeated manner or in the ordinary course of repetitive and successive transactions of like character by corporations or organizations which are exempt from the payment of tax under W. Va. Code '11-15-9(f) and Section 9.3.10 of these regulations on its purchases of tangible personal property or services.

9.2.23. Tuition charged for attending an educational summer camp (as defined in Section 2 of these regulations).

9.2.23.1. Even though the tuition charged for attending an educational summer camp is exempt, that exemption does not extend to charges for services or tangible personal property which is provided by the summer camp.

9.2.23.2. In order for the exemption to be claimed, the tuition charge must be separately identifiable and it may not include other charges for services or tangible personal property provided by the summer camp.

9.2.23.3. For further information, See Section 125 of these regulations.

9.2.24. Sales of vehicles which are titled with the West Virginia Department of Motor Vehicles and which are subject to the vehicle title privilege tax imposed by W. Va. Code '17A-3-4 or a similar tax imposed by another state. All sales of vehicles are subject to the consumers sales and service tax and the use tax unless two conditions are met:

(1) it is titled by the West Virginia Department of Motor Vehicles or a similar agency of another state; and

(2) it is subject to the vehicle title privilege tax or a similar tax imposed by another state; or unless the transaction is exempt under some other provision of this Section.

9.2.24.1. Any vehicle which is licensed or titled by the West Virginia Department of Motor Vehicles but which is not subject to the West Virginia vehicle title privilege tax, is subject to the consumers sales and service tax or the use tax.

9.2.24.2. Any vehicle which is licensed or titled by the West Virginia Department of Motor Vehicles, such as a travel trailer or a camping trailer, which is purchased from a person who is not engaged in the business of selling such vehicles or related property is considered to have been the subject of an isolated sale and is exempt from consumers sales and service tax and the use tax.

9.2.24.3. In order to establish the applicability of the consumers sales and service tax or use tax, the Tax Commissioner may require proof that the motor vehicle privilege tax has been paid.

9.2.24.4. Any vehicle which is purchased and delivered in West Virginia and immediately removed from this State is exempt from the consumers sales and service tax and use tax if the vehicle is then titled and registered in another state and is subject to a tax similar to the tax imposed by W. Va. Code '17A-3-4.

9.2.25. Charges for the services of opening and closing a burial lot or burial vault for the ultimate disposition of human remains.

9.2.26. Sales of livestock, poultry, or other farm products in their original state by the producer thereof (or a member of the producer's immediate family) who is not otherwise engaged in making retail sales of similar tangible personal property. See Section 2 of these regulations for additional information.

9.2.26.1. This section applies whether the retail sales transaction occurs at a roadside stand or elsewhere; however, such retail sales will not be affected by the normal wholesale sale of the producer's products. For example, if a producer grows apples, such apples may be sold exempt from tax so long as the producer does not operate a retail business in which apples are sold. However, if that same producer operates a commercial produce market and sells the apples he raises as well as other apples and produce grown by others, the sale of all apples is subject to consumers sales and service tax.

9.2.26.2. Neither the producer nor a member of the producer's immediate family claiming entitlement to this exemption may be engaged as an employee, independent contractor, owner or partner of a retail business which sells tangible personal property similar to that being sold by the producer.

9.2.27. Sales of livestock at public sales sponsored by breeder's or registry associations or at livestock auction markets.

9.3. Exemptions for Which Exemption Certificate or Material Purchase Certificate Required. - The following sales of tangible personal property and taxable services shall be exempt from tax but only if the purchaser presents to, and the vendor thereof accepts, in good faith, a properly executed exemption certificate or material purchase certificate, or the purchaser presents his direct pay permit number issued by the Tax Commissioner under W. Va. Code ''11-15-9d and 11-15A-3a:

9.3.1. Sales of tangible personal property or taxable services to this State, its institutions or subdivisions, governmental units, institutions or subdivisions of other states: Provided, That the law of such other state provides the same exemption to governmental units or subdivisions of the state, and to the government of the United States, including agencies of federal, State or local governments for distribution in public welfare or relief work.

9.3.1.1. It is necessary that the vendor acquire a properly executed exemption certificate from all purchasers claiming exemption from tax under this provision. Frequently, governmental entities fail to present such a certificate. In such event, the books and records of the vendor must show that the purchase was billed to and paid by the government agency.

9.3.1.2. Sales to individuals who are employees of this State, its institutions and subdivisions, or of the United States government, are not exempt from tax unless the sale is billed directly to the appropriate government agency or the purchase is by means of a properly completed government purchase order.

9.3.2. Reserved for future use.

9.3.3. Sales of property or services to churches which make no charge whatsoever for the services they render: Provided, That this exemption shall apply only to services, equipment, supplies, food for meals and materials directly used or consumed by these organizations, and shall not apply to purchases of gasoline or special fuel. For example, the purchase of pamphlets relating to drug abuse are not subject to tax if the church makes no charge in rendering services to persons with drug problems. For those purchases which qualify for exemption, the church may issue to the vendor a properly completed exemption certificate.

9.3.4. Sales of tangible personal property for the purpose of resale in the form of tangible personal property: Provided, That sales of gasoline and special fuel by distributors and importers shall be taxable except when the sale is to another distributor for resale.

9.3.4.1. Tangible personal property purchased for resale is taxable when it is withdrawn from inventory for use or consumption by the purchaser unless that consumption or use is exempt under some other provision of this Section. The value subject to tax is the purchase price paid by the purchaser at the time the item was purchased for inclusion in inventory.

9.3.4.1.a. Example. - A wholesale office supply company may purchase office supplies from the manufacturer without paying the consumers sales and service tax or the use tax on such purchases. The wholesaler then resells such supplies to a vendor who purchases them for sale to consumers. That vendor purchases supplies from the wholesaler without imposition of the tax, inasmuch as he purchased them for the purpose of resale. When this vendor withdraws office supplies from his inventory held for resale, whether for use or consumption in his office supply business or for his personal use or consumption, he becomes liable for payment of use tax.

9.3.4.2. The exemption allowed by this Section permits vendors of tangible personal property, whether they be wholesalers, distributors, jobbers, retailers, providers of taxable services (but not providers of services excepted from tax under W. Va. Code '11-15-8) or others to purchase tangible personal property for the purpose of resale in the form of tangible personal property without paying the consumers sales and service tax or the use tax. However, when such vendors purchase tangible personal property or services for use or consumption in their business of selling tangible personal property, they must pay the consumers sales and service tax or the use tax on such purchases. Therefore, purchases of janitorial services, equipment repairs, adding machines, etc., are taxable. In other words, vendors of tangible personal property are exempt from tax only on purchases of tangible personal property which are purchased for the purpose of resale in the form of tangible personal property, unless the purchases are exempt under some other provision of this Section. For application of this exemption for personal services providers, see Section 35 of these regulations.

9.3.4.3. For providers of taxable services and sellers of tangible personal property subject to the consumers sales and service tax or use tax, property purchased is presumed to be purchased for resale if the final consumer or end user of the property sold will obtain possession of the property upon consummation of the final sale of the property or service sold.

9.3.4.3.a. Example: Property sold for resale relating to sales of taxable services would include: sales of plastic dry cleaning bags and hangers to persons in the business of dry cleaning, sales of television picture tubes, solder and wire to television and electronics repair businesses and sales of primers and paint to persons in the automobile body repair business.

9.3.4.3.b. Example: Property not sold for resale to such service providers would include: sales of dry cleaning fluid, cash registers or other office equipment or dry cleaning equipment to persons in the business of dry cleaning, and sales of soldering irons, electronic test equipment, office or shop furniture or electronics manuals and technical books to television or electronics repair businesses.

9.3.4.3.c. Sales of carpet shampoo to persons in the carpet cleaning business would not constitute sales for resale because, although the shampoo is applied to the customer's carpet in the cleaning process, it is extracted from the carpet, allowed to evaporate or otherwise effectively used up in the process rather than being the subject of a transfer of possession.

9.3.4.3.d. Regulations relating to containers can be found in Section 32 of these regulations.

9.3.4.4. Except as otherwise provided in this Section, the exemption allowed by Section 9.3.4 of these rules does not apply to sales of building materials or building supplies or other property to any person engaging in the activity of contracting when the materials, supplies or property are to be installed in, affixed to or incorporated by such person or his agent into any real property, building or structure.

9.3.4.4.a. Prior to October 1, 1990, the exemption allowed by Section 9.3.4 of these rules does apply to sales of tangible personal property to a person engaging in the activity of contracting when the contracting activity meets the following requirements. Effective October 1, 1990 and subject to the provisions in W. Va. Code '11-15-8c and Section 8c of these regulations, the exemption for the purchase of materials for use in government contracts was generally repealed. See Section 109 of these regulations for additional information on the transition rules relating to the taxation of materials for use in governmental contracts.

9.3.4.4.a.1. The contracting activity must occur pursuant to a written contract with the government of the United States, the State of West Virginia, or a political subdivision thereof, or with a public corporation created by the Legislature, or by another government entity pursuant to an act of the Legislature, or with an agency or instrumentality of the government of the United States.

9.3.4.4.a.2. The written contract must be for the construction or improvement of a building or structure or for the improvement of other real property. The building or structure or improved real property must be or will be owned by the governmental entity and it must be used for a governmental or proprietary purpose.

9.3.4.4.a.3. With the exception of construction waste, the tangible personal property purchased by the person engaging in the contracting activity must be totally incorporated into the building, structure or improved property which is the subject of the written contract. Construction waste shall mean the discarded materials and refuse resulting from the contracting activity.

9.3.4.4.a.4. The person who purchases tangible personal property which is exempt in accordance with Section 9.3.4.4.a of these regulations shall, for the purposes of such purchases, be deemed to be the vendor of such property to the governmental entity.

9.3.4.4.a.5. A subcontractor who, pursuant to a written subcontract with a contractor who qualifies for this exception, provides equipment, or materials, and labor to such a prime contractor shall be treated in the same manner as the contractor is treated with respect to the prime contract under the exemption provided by Section 9.3.4.4.a of these regulations.

9.3.4.4.b. In order to claim the exemption allowed by Section 9.3.4.4.a of these regulations, a contractor or subcontractor who has a current Business Registration Certificate issued in accordance with W. Va. Code '11-12-1 et seq., may, prior to July 1, 1990, use his direct payment permit as issued by the Tax Commissioner or subsequent to June 30, 1990, apply for and obtain a material purchase certificate from the Tax Commissioner: Provided, That effective July 1, 1990, this exemption may only be claimed by the contractor or subcontractor issuing his material purchase certificate number to the vendor. The entity awarding the contract will provide the contractor with the application for the material purchase certificate if the contractor is to use that method for claiming exemptions. The material purchase certificate will entitle the contractor or subcontractor to purchase materials that are to become a component part of the building, structure or other property which is to be constructed or improved and for which Section 9.3.4.4.a of these regulations authorizes exemption. The material purchase certificate shall expire upon completion of the contract named thereon. As of October 1, 1990, the exemption provided in Section 9.3.4.4.a of these regulations was generally repealed and use of the material purchase certificate became very limited. See Section 109 of these regulations for additional information on the transition rules relating to the taxation of materials for use in governmental contracts.

9.3.4.4.b.1. Component materials are considered to be all materials which become an integral part of the structure being erected.

9.3.4.4.b.2. When applying for the material purchase certificate, the contractor must provide the Tax Commissioner with a list of all work subcontracted to others, indicating the amount of work to be performed, and the names and addresses of each subcontractor.

9.3.4.4.b.3. The contractor, or subcontractor, shall provide his vendor with his material purchase certificate number whenever he purchases tangible personal property which is to become a component part of a structure or improvement to realty pursuant to an exempt contracting activity. So long as the vendor in good faith takes the material purchase certificate number and notes it on the invoice, sales slip or other record of sale, the vendor shall be absolved of all duties and responsibilities imposed for the collection of consumers sales and service tax and use tax with respect to such sales. Failure to take the material purchase certificate number or to collect the amount of tax due shall result in the vendor being liable for the amount of tax not collected.

9.3.4.4.b.4. Any vendor who takes the material purchase certificate number in lieu of the consumers sales and service tax or use tax due and who has received notice in writing that such material purchase certificate has been canceled or surrendered or has expired shall be liable for any such tax he failed to collect.

9.3.4.4.b.5. Upon the expiration, cancellation or surrender of a material purchase certificate, the provisions of W. Va. Code '11-15-1 et seq. and W. Va. Code '11-15A-1 et seq., without regard to a material purchase certificate, shall apply to the person who previously held such a certificate. Such person shall promptly notify in writing all vendors from whom he purchases tangible personal property with the use of the material purchase certificate that such certificate has expired, was cancelled or surrendered. The notice required by this Section shall be made within ten (10) days after the certificate has been cancelled or surrendered or expired. Upon receipt of such notice, the vendor shall be required to collect the consumers sales and service tax and the use tax on all sales or leases of tangible personal property and sales of taxable services, thereafter made to or for such person for the contract covered by the invalid material purchase certificate.

9.3.4.5. Liquors or wines purchased by persons or organizations licensed under the authority of W. Va. Code article 60-7 from retail liquor stores operated in accordance with W. Va. Code article 60-3 or from retail liquor stores licensed under the authority of W. Va. Code article 60-3A are not exempt as purchases for resale.

9.3.5. Sales of property or services to a school which has approval from the Board of Trustees of the University System of West Virginia or the Board of Directors of the State College System to award degrees, which has its principal campus in this State, and which is exempt from federal and state income taxes under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended: Provided, That sales of gasoline and special fuel to such entities shall be taxable.

9.3.6. Sales of mobile homes that will be utilized by the purchasers as their principal year-round residence and dwelling: Provided, That these mobile homes shall be subject to the consumers sales and service tax and the use tax at the three percent (3%) rate. See Section 122 of these regulations for further information.

9.3.7. Sales of propane to consumers for poultry house heating purposes. Any person selling to such consumer who paid the consumers sales and service tax on special fuel in his price, shall not pass it on to the consumer, but may make application and receive refund of such tax from the Tax Commissioner, notwithstanding any provision of W. Va. Code '11-15-1 et seq. to the contrary.

9.3.7.1. A seller who paid the consumers sales and service tax or the use tax when purchasing the propane for resale is not authorized to pass such tax on to the consumer who purchases such propane for the sole purpose of heating a poultry house. In that instance, it is necessary for the seller to reduce the sales price of the propane sold for the exempt purpose by the amount of the sales or use tax on special fuel included in the consideration he paid for that quantity of propane and claim a refund of such tax from the Tax Commissioner.

9.3.8. Sales of tangible personal property or taxable services purchased for use or consumption in connection with the commercial production of an agricultural product, the ultimate sale of which will be subject to the consumers sales and service tax: Provided, That sales of tangible personal property and services to be used or consumed in the construction of or permanent improvement to real property and sales of gasoline and special fuel shall not be exempt.

9.3.8.1. This exemption applies to purchases for use in the commercial production of agricultural products as a business and not to purchases for use or consumption for any other purpose. Therefore, a person in the business of farming may purchase feed, seed, fertilizer, repairs to a tractor, etc., without payment of the consumers sales and service tax.

9.3.8.2. Sales of tangible personal property or services to a farmer to be used or consumed in the construction or improvement of real property are not exempt from the consumers sales and service tax and the use tax. For example, sales to farmers of building materials to construct barns, sheds or fences are taxable. If, at the time fencing materials are purchased, the purchaser intends to install the fencing at a specific location for a period of time in excess of sixty (60) days, the fence will be considered a permanent improvement to real property and the purchase of the materials will be taxable; however, if the time period for installation is intended to be sixty (60) days or less, the fence will not be considered a permanent improvement to real property and the purchase may be exempt.

9.3.8.3. Prior to July 1, 1989, a farmer or person in an agricultural business was not required to hold a business registration certificate in order to issue an exemption certificate. Effective July 1, 1989, in order to claim this exemption, the purchaser, whether a farmer or person in an agricultural business, may either present the vendor with a properly completed exemption certificate, or pay the tax due and claim a refund or credit from the Tax Department. Furthermore, such purchaser must hold a valid business registration certificate issued under the authority of W. Va. Code '11-12-1 et seq. in order to issue an exemption certificate.

9.3.9. Sales of building materials for use in remodeling, rehabilitation, or new construction in an enterprise zone, and the sale of new or used equipment and machinery when purchased by a qualified business for use in an enterprise zone: Provided, That the terms "qualified business" and "enterprise zone" are determined and designated in accordance with W. Va. Code '5B-2B-1 et seq. In order to claim this exemption when purchasing building materials for use in remodeling, rehabilitation, or new construction in an enterprise zone, the purchaser must provide the vendor with his material purchase certificate number. For purposes of these regulations, the materials purchase certificate is to be the exemption certificate required to obtain the exemption set forth in W. Va. Code '5B-2B-1.

9.3.9.1. The owner of such facility, or a lessee making leasehold improvements in the facility which inure to the benefit of the owner of the facility, shall obtain from the Tax Commissioner and furnish to the contractor a material purchase certificate for the project involved, and the contractor may purchase materials, machinery and equipment for incorporation in such project.

9.3.9.2. The contractor shall furnish the number on such certificate to all suppliers from whom such purchases are made, and such suppliers shall execute invoices covering the same and bearing the number of such certificate.

9.3.9.3. Upon completion of the project, the contractor shall furnish to the owner of the qualified business facility a sworn statement, on a form to be prescribed by the Tax Commissioner, that all purchases so made were entitled to exemption. All invoices shall be retained by the contractor for a period of five (5) years and shall be subject to audit by the Tax Commissioner.

9.3.9.4. Any contractor or any agent, employee or subcontractor thereof, who shall use or otherwise dispose of any materials, machinery or equipment purchased under such a material purchase certificate for any purpose other than that for which the certificate is issued without paying the tax imposed by W. Va. Code '11-15-1 et seq. or W. Va. Code '11-15A-1 et seq. shall be liable for payment of such taxes including interest, any applicable additions to tax plus any penalty and applicable criminal sanctions.

9.3.10. Sales of tangible personal property or taxable services to a corporation or organization which has a current Business Registration Certificate issued under W. Va. Code '11-12-1 et seq., which is exempt from federal income taxes under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as amended, and which satisfies one of the following requirements:

9.3.10.1. The corporation or organization is a church or a convention or association of churches as defined in Section 170 of the Internal Revenue Code of 1986, as amended.

9.3.10.2. The corporation or organization is an elementary or secondary school, whether public or private, which maintains a regular faculty and curriculum and has a regularly enrolled body of pupils or students in attendance at the place in this State where its educational activities are regularly carried on.

9.3.10.3. A corporation or organization which annually receives more than one half of its support from any combination of gifts, grants, direct or indirect charitable contributions, or membership fees as defined in Section 2 of these regulations.

9.3.10.4. An organization which has no paid employees and its gross income from fund raisers, less reasonable and necessary expenses incurred to raise such gross income (or the tangible personal property or services purchased with such net income), is donated to an organization which is exempt from income taxes under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as amended.

9.3.10.5. A youth organization, such as the Girl Scouts of the United States of America, or the Boy Scouts of America, or the YMCA Indian Guide/Princess Program, and the local affiliates thereof, which is organized and operated exclusively for charitable purposes and has as its primary purpose the nonsectarian character development and citizenship training of its members.

9.3.10.6. The exemption allowed by W. Va. Code '11-15-9(f) and this Section 9.3.10 does not apply to sales of gasoline or special fuel or to sales of tangible personal property or services to be used or consumed in the generation of unrelated business income as defined in Section 513 of the Internal Revenue Code of 1986, as amended.

9.3.10.7. The exemption authorized by W. Va. Code '11-15-9(f) and this Section 9.3.10 shall apply only to services, equipment, supplies and materials used or consumed in the activities for which such organizations qualify as tax exempt organizations under the Internal Revenue Code by these organizations and shall not apply to purchases of gasoline or special fuel.

9.3.10.8. A corporation or organization which fails to satisfy the requirements in the foregoing Section 9.3.10, such requirements being necessary to claim an exemption, must pay the tax but may not claim a refund unless some other exemption is available.

9.3.11. Sales of electronic data processing services and related software: Provided, That for the purposes of this Section, "electronic data processing services" means

(1) the processing of another's data, including all processes incident to processing of data such as keypunching, keystroke verification, rearranging, or sorting of previously documented data for the purpose of data entry or automatic processing, and changing the medium on which data is sorted, whether these processes are done by the same person or several persons; and

(2) providing access to computer equipment for the purpose of processing data or examining or acquiring data stored in or accessible to such computer equipment. So long as the electronic data processing service is performed for another person who is in no manner a part of the entity performing the service, and provided that the charge is actually and only for the sale of electronic data processing services and does not include any charges for other activities, the exemption will apply.

9.3.11.1. This exemption does not apply to the sale of computer software, whether of canned or custom design, if such software is not to be used for the processing another's data. In other words, the purchase of software for a person's own computer is not exempt unless that person is in the business of processing data for others and the software is to be utilized for that purpose.

9.3.11.2. This exemption does not apply to any purchase of computer hardware.

9.3.12. Dispensing of services performed by one corporation for another corporation when both corporations are members of the same controlled group. Control means ownership, directly or indirectly, of stock possessing fifty percent or more of the total combined voting power of all classes of the stock of a corporation entitled to vote or ownership, directly or indirectly, of stock possessing fifty percent or more of the value of the corporation. Purchases of taxable services from an entity outside the controlled group by a member of the controlled group for use by other members of the controlled group are not exempt from consumers sales and service tax or use tax as a purchase for resale under W. Va. Code '11-15-9(j) or Section 9.3.4.2 of these regulations.

9.3.13. Food, as defined in Section 2.30 of these regulations, when purchased by the following organizations shall be exempt:

9.3.13.1. Food purchased by public or private schools, school sponsored student organizations, or school sponsored parent-teacher associations and sold to students enrolled in such school or to employees of such school during normal school hours, but not those sales of food made to the general public. For further information about this exemption, See Section 126 of these regulations.

9.3.13.2. Food purchased by a public or private college or university or by a student organization officially recognized by such college or university to students enrolled at such college or university when such sales are made on a contract basis so that a fixed price is paid for consumption of food products for a specific period of time without respect to the amount of food product actually consumed by the particular individual contracting for the sales and no money is paid at the time the food product is serviced or consumed. For additional information about this exemption, See Section 126 of these regulations.

9.3.13.3. Food purchased by a charitable or private nonprofit organization, a nonprofit organization or a governmental agency under a program to provide food to low-income persons at or below cost.

9.3.13.3.a. For additional information about this exemption, See Section 126 of these regulations.

9.3.14. Sales of motion picture films to motion picture exhibitors for exhibition if the sale of tickets or the charge for admission to the exhibition of the film is subject to the sales and service tax.

9.3.15. Sales of coin-operated video arcade machines, or video arcade games to a person engaged in the business of providing such machines or games to the public for a charge upon which the sales and service tax is imposed and which is remitted to the Commissioner.

9.4. Refundable Exemptions. - The vendor liable for collection of the consumers sales and service tax or use tax shall collect such taxes when making the following sales of tangible personal property or taxable services (unless the purchaser presents his direct pay permit number issued by the Tax Commissioner under W. Va. Code ''11-15-9d and 11-15A-3d and provided that the sales are not exempt under paragraph 9.2 of these regulations); and such taxes, after payment, shall, upon proper application therefor, be refunded or credited to the purchaser as provided in W. Va. Code ''11-15-9b and 11-15A-3b:

9.4.1. Sales of property or services to persons engaged in this State in the business of manufacturing, transportation, transmission, communication or in the production of natural resources (as such terms are defined in Section 2): Provided, That the exemption provided in this Section shall only apply to services, machinery, supplies and materials directly used or consumed in the activities of manufacturing, transportation, transmission, communication or the production of natural resources in the businesses or organizations named above and shall not apply to purchases of gasoline or special fuel. For further information See Section 123 of these regulations.

9.4.1.1. For example:

9.4.1.1.a. Sales of janitorial services and supplies to a person who manufactures chemicals are not exempt but the sale of raw materials utilized in a chemical manufacturing process would be exempt.

9.4.1.1.b. Sales of telephone poles and wires to a telephone or telegraph company are generally exempt; however, purchases of telephone poles and wires or other goods and services used in activities not subject to the Telecommunications Tax, W. Va. Code '11-13B-1 et seq., are not exempt unless directly used in communications activities as defined in Section 2.16 of these regulations.

9.4.1.1.c. Charges for the transportation of a product between different locations of the same manufacturer where subsequent steps in the manufacturing process occur are exempt.

9.4.1.1.d. Sales to contract miners to be directly used in the extraction of natural resources would be exempt while those purchases not directly used in that activity would be taxable. However, if a contract miner is subject to the Severance Tax, W. Va. Code '11-13A-1 et seq., all purchases whether directly or not directly used in the conduct of privileges which are subject to the Severance Tax are exempt. See Section 9.4.4 of these regulations for additional information.

9.4.1.2. The sale, to be exempt, must be of tangible personal property or taxable services directly used or consumed (as defined in Section 2 of these regulations) in the business activity of manufacturing, transportation, transmission, communication or in the production of natural resources.

9.4.2. Sales of tangible personal property or services to nationally chartered fraternal or social organizations when such property or services are purchased for the sole purpose of free distribution in public welfare or relief work: Provided, That sales of gasoline and special fuel shall be taxable. This exemption is applicable to only those purchases of property or services which will be distributed free in public welfare or relief work. All other purchases will be subject to the consumers sales and service tax or the use tax unless such purchases are exempt under some other provision of these regulations.

9.4.3. Sales and services of fire fighting or station house equipment, including construction and automotive equipment, made to any volunteer fire department organized and incorporated under the laws of the State of West Virginia: Provided, That sales of gasoline and special fuel shall be taxable.

9.4.4. Sales of property and services to persons subject to the Business and Occupation Tax, W. Va. Code '11-13-1 et seq., the Severance Tax or the Telecommunications Tax after June 30, 1987: Provided, That this exemption shall apply only to tangible personal property or services used or consumed in the conduct of privileges which are subject to one of the above-referenced taxes and shall not apply to purchases of gasoline or special fuel.

9.4.4.2. It should be noted that some entities may be engaged in many activities, some of which are subject to the B & O, severance or telecommunications tax and some of which are not subject to such taxes. If a purchaser will use the purchase in more than one activity, the purchaser must apportion the purchase price in accordance with Section 9d of these regulations.

9.4.5. Sales of building materials or building supplies or other property to an organization qualified under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as amended, which are to be installed in, affixed to or incorporated by such organization or its agent into real property, or into a building or structure which is or will be used as permanent low-income housing, transitional housing, emergency homeless shelter, domestic violence shelter or emergency children and youth shelter if such shelter is owned, managed, developed or operated by an organization qualified under Section 501(c)(3) or (c)(4) of the Internal Revenue Code of 1986, as amended.

9.4.5.1. The qualified organization must purchase the materials or property in order to claim this exemption.

9.4.5.2. The materials or property must be installed in, affixed to or incorporated into real property or a structure which will be used for the purposes stated in Section 9.4.5 of these regulations.

9.4.5.2.a. Either the qualified organization or its agent must install, affix or incorporate the property or materials into the qualified structure or real property.

9.4.5.2.b. For purposes of this exemption, agent is defined as being a person employed by the qualified organization for the purpose of installing, affixing or incorporating the materials or property into the qualified real property, building or structure.

9.4.6. Sales of property or services to bona fide charitable organizations which make no charge whatsoever for the services they render: Provided, That this exemption shall apply only to services, equipment, supplies, food for meals and materials directly used or consumed by those organizations, and shall not apply to purchases of gasoline or special fuel.

9.4.6.1. For purposes of this exemption, a bona fide charitable organization is an organization which qualifies or is qualified under I.R.C. 501(c)(3) or under Section 2.12 of these regulations.

9.4.7. Sales of aircraft repair, remodeling and maintenance services when such services are to an aircraft operated by a certificated or licensed carrier of persons or property, or by a governmental entity or to an engine or other component part of an aircraft operated by a certificated or licensed carrier of persons or property, or by a governmental entity.

9.4.7.1. Sales of tangible personal property that is permanently attached as a component part of an aircraft owned or operated by a certificated or licensed carrier of persons or property, or by a governmental entity, as part of the repair, remodeling or maintenance service.

9.4.7.2. Sales of machinery, tools, or equipment, directly used or consumed exclusively in the repair, remodeling, or maintenance of aircraft, aircraft engines, or aircraft component parts, for a certificated or licensed carrier of persons or property, or for a governmental entity.

9.4.8. Sales of tangible personal property and services to a person entitled to claim the tax credit for investment in certain management information services facilities allowed under W. Va. Code '11-13D-3c, pursuant to the issuance of a management information services tax credit certification by the Tax Commissioner in accordance with W. Va. Code '11-13D-3c(e), when such property or services are directly used or consumed by the purchaser in the operation of the management information services facility, as defined in Section 2 of these regulations for which credit is allowed under W. Va. Code '11-13D-3c. Tangible personal property, or services, directly used or consumed in the operation of a management information services facility includes only:

(1) computer processing and telecommunications equipment;

(2) data storage and input/output devices;

(3) disaster recovery services;

(4) supplies;

(5) application, telecommunication and operating system software;

(6) repair and maintenance of any of the aforesaid items; and

(7) other tangible personal property or services directly used or consumed in the operation of a management information services facility: Provided, That the property is purchased or leased after March 31, 1991. This exemption shall not apply to tangible personal property, or services, that are not directly used or consumed in the operation of a management information services facility, or to gasoline or special fuel: Provided, however, that nothing in this paragraph shall be construed to limit, exclude or preclude the application or availability of any other exemption set forth in this W. Va. Code '11-15-9, elsewhere in the Code or in these regulations, which might otherwise apply to any sale of tangible personal property or services.

9.5. Specific Use Tax Exemptions. - The use in this State of the following tangible personal property and taxable services is specifically exempted from the use tax:

9.5.1. All articles of tangible personal property brought into the State of West Virginia by a nonresident individual thereof for his or her use or enjoyment while temporarily within this State or while passing through this State, except gasoline and special fuel: Provided, That fuel contained in the supply tank of a motor vehicle that is not a motor carrier shall not be taxable. In other words, vacationers, visitors or other nonresident individuals may bring tangible personal property, including gasoline in their personal vehicles, into this State for their own use without imposition of use tax.

9.5.1.1. All tangible personal property brought into this State for use or consumption in this State by a nonresident contractor is subject to W. Va. Code '11-15-8b and Section 8b of these regulations. See Section 110 of these regulations for further information.

9.5.2. Tangible personal property or services, the gross receipts from the sale of which in this State are exempt from the consumers sales and service tax by the terms of W. Va. Code '11-15-1 et seq. and provided that the property or services are being used for the purpose for which it was exempted.

9.5.3. Tangible personal property or services, the gross receipts from the sale of which in this State are required to be included in the measure of the consumers sales and service tax, and upon which such tax has been paid. It is necessary for the purchaser to provide a receipt showing that the consumers sales and service tax has been paid.

9.5.4. Tangible personal property or services, the sale of which in this State is not subject to the consumers sales and service tax. The exemption contained herein is related directly to the purchase or use of a taxable service or a particular item of tangible personal property and not to the status of the vendee. In other words, it is use or sale of the particular article or property or service which is exempt. For example, X, a resident of West Virginia, has his federal and state income tax returns prepared by an Ohio certified public accountant. X will pay no use tax thereon because the purchase within West Virginia of professional services is not subject to consumers sales and use tax.

9.6. Exemptions; Exception for Liquors and Wines Purchased for Resale. - The exemption provided for sales of tangible personal property purchased for resale does not apply to purchases of alcoholic liquor, wines or fortified wines, as defined in Chapter 60 of the Code, from the Alcohol Beverage Control Commissioner or retail liquor licenses licensed under the authority of W. Va. Code '60-3A-1 et seq. for resale by persons or organizations licensed under authority of W. Va. Code '60-7-1 et seq.

9.7. Moving Residence or Business Into State. - The use tax shall not apply to tangible personal property purchased outside this State for use outside this State by a person who at that time was a nonresident natural person, or a business entity not actually doing business within this State, who or which later brings such tangible personal property into this State in connection with his establishment of a permanent residence or business in this State: Provided, That such property was purchased more than six (6) months prior to the date it was first brought into this State, or six (6) months prior to the establishment of such residence or business, whichever first occurs.

9.7.1. Tangible personal property used out-of-state for six (6) or more months by a nonresident individual, or a business entity not actually doing business in this State, that is brought into this State for use by such individual or business in this State in connection with moving the person's residence or business into this State is exempt regardless of how it was brought into this State.

9.7.2. Property purchased and used out-of-state for less than six (6) months by a nonresident individual, or by a business not actually doing business in this State, will be subject to use tax when such property is relocated in this State in connection with moving the person's residence or business into this State unless:

9.7.2.1. One of the exemptions in this Section 9 specifically applies; or

9.7.2.2. If the amount of sales or use taxes lawfully paid to another State with respect to such property is equal to or greater than the amount of this State's use tax otherwise due on the original purchase price of the property at the time it is brought into this State, then no West Virginia use tax is due. However, if the amount of West Virginia use tax exceeds the amount of tax lawfully paid in another state, the difference must be remitted to the Tax Commissioner.

W. Va. Code R. § 110-15-9