Persons Rendering Services

33.1. Persons engaged in this State in the business of dispensing, rendering or providing taxable services are required to collect consumers sales and service tax from their customers on the gross proceeds which they derive from dispensing, rendering or providing such 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.

33.2. Persons not physically engaged in business in this State who dispense, render or provide taxable services to West Virginia customers are required to collect the use tax imposed by this State when such out of state persons have sufficient nexus with this State. See regulation Section 128 for when out-of-state vendors are required to collect use tax.

33.3. The phrase "persons engaged in business" as used herein means persons who offer a service to the public or to others for a consideration whether such person offers the service continuously, part-time, seasonally or for short periods. The consumer sales and use tax laws apply to all services except those that are exempt from tax.

33.4. Enumerated Services Excepted. - Consumers sales and service tax shall not apply to any of the following services:

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.

33.5. Persons engaged in any of the activities set out below or any similar or analogous activities are rendering a service subject to the consumers sales and service tax and use tax unless the transaction is subject to an express exemption:

Alterations of tangible personal property Motor repair
Armored car service Motorcycle repair
Automobile repair Painting
Billboards Photography
Billiards, pool Planing mills
Bowling alleys Printing
Boat repair Recapping
Business machine Repairing tangible repair personal property
Cleaning, pressing, dyeing Sewing
Creosoting Shoe repair
Dance schools Storage warehouse
Delivering and storage lockers
Engraving Termite and pest
Foundries control
Furniture repair Tin and sheet metal
Hotels, motels, repair shops homes, rooming houses Warehouses
House moving Washing cars
Jewelry repair Watch repair
Laundries Weighing
Machine operators Welding
Meat cutting Wrapping merchandise

This does not constitute a complete list. Other activities not appearing on the foregoing list are subject to the consumers sales and service tax and use tax unless specifically exempted or excepted by these regulations.

33.6. Repairs: Contracting Service or Taxable Repair.

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.

33.6.7.1. The presence of a time relationship can also be a factor in determining the applicability of the contracting exemption. To illustrate, a repair which ordinarily would be a taxable service is tax exempt contracting when the vendor makes the repair as part of a contract for a capital improvement.

33.6.7.2. The motive behind the activity and the course of events that could reasonably be expected to occur would be another consideration in determining if an exempt contracting service is involved.

33.6.7.3. A physical relationship is also a factor that should be evaluated. If a building is constructed to house machinery, any enumerated services relating to the installation of that machinery would be an exempt contracting service. For example, piping joining two pieces of equipment housed in separate buildings would be treated as tax exempt contracting if the equipment in either building was installed while such new construction, reconstruction, alternation, expansion or remodeling of the structure resulting in a capital improvement was also taking place to house the equipment.