RATE OF SALES TAX:
6.00%
LOCAL & COUNTY MAXIMUM RATES:
1.00%
What are the taxable goods and services?
The first step in sales tax compliance is determining if the items or services your firm offers are taxable in West Virginia.
Traditional Products and Services
Physical property, such as furniture, household appliances, and automobiles, is subject to sales tax in West Virginia.
Prescription drugs, food, and fuel are all tax-free purchases.
Digital Products and Services
A digital item or service is anything that is supplied electronically, such as a music downloaded from iTunes or a movie bought from Amazon.
Businesses in West Virginia are not required to collect sales tax on the sale of digital products or services.
West Virginia, on the other hand, has one exemption to this restriction. Businesses are required to collect sales tax on pre-written computer software offered online.
How to Register for Sales Tax in West Virginia
If you have concluded that you must charge sales tax on part or all of the products and services that your company sells, the next step is to apply for a seller’s licence.
This enables your company to collect sales tax on behalf of the municipal and state governments.
You will need the following information to register:
Personal identifying information (SSN, address, etc.)
Business identity information (EIN, address, and so forth) – Even if you are situated outside of the West Virginia NAICS code, always provide your home company or business address (You can do a NAICS Code Lookup and find the NAICS Code for LLC that matches your industry.)
When did you start conducting business in West Virginia? (Unsure what to put here? More information on “When to Register for a Sales Tax Permit”)
A Resale Certificate might help you save money.
When acquiring items for resale, your firm does not have to pay sales tax if you obtain a resale certificate, also known as a reseller’s permit.
Sales Tax Collection
After obtaining your seller’s licence and starting your company, you’ll need to figure out how much sales tax to charge various consumers. It is critical for company owners to collect the right rate of sales tax to avoid penalties and the danger of expensive audits.
When computing sales tax, consider the following types of transactions:
Store Sales Shipping Within-State Sales Outside-State Sales
Retail Sales
For conventional company owners who sell products or services on-site, calculating sales tax is simple: all sales are taxed at the rate determined by the store’s location.
Here’s an illustration of how this situation may look:
Mary runs a bookshop in Morgantown, West Virginia. Because books are taxable in West Virginia, Mary imposes a flat-rate sales tax of 6.000% on all purchases. This includes the state sales tax of 6.000% in West Virginia.
Sales inside the state
West Virginia has what is known as a destination-based sales tax scheme. This implies that long-distance transactions inside West Virginia are taxed based on the buyer’s address. This regulation applies to sales taxes levied by the state, county, and city.
Consider the following scenario:
Steve operates his own eBay electronics company from his home in Beckley, West Virginia. A buyer from Charleston discovers Steve’s eBay website and buys a $350 set of headphones. Steve uses the West Virginia state tax rate of 6.000%, plus the municipal tax rate of 1.000%, when computing the sales tax for this transaction. The entire cost is $374.50 ($24.50 sales tax) at a total sales tax rate of 7.000.
Out-of-State Purchases
Businesses in West Virginia must only pay sales tax on out-of-state sales if they have nexus in other states.
Nexus indicates that the company has a physical presence in another state.
Common nexus types include:
A physical place, such as an office, retail shop, or warehouse.
An employee who works from home or as a roaming sales representative.
An affiliate marketer
Dropshipping from a third-party vendor.
A temporary physical site, such as a festival or fair booth.
Submit Your Sales Tax Return
You’re ready to submit your sales tax return now that you’ve obtained your West Virginia seller’s permit and understand how to charge the correct amount of sales tax to all of your customers. You avoid penalties and fines, be sure to meet all filing dates.
How to File a Claim
Businesses in West Virginia are required to file sales tax forms and make sales tax payments online.
How Frequently Should You File?
The frequency with which you must submit is determined by the total amount of sales tax collected by your firm.
Annual filing: If your company receives less than $600.00 in sales tax each year, you must submit returns on an annual basis.
Quarterly filing: If your company receives no more than $250.00 in sales tax every month, you should submit quarterly returns.
Monthly filing: If your company receives more than $250.00 in sales tax each month, you must submit monthly returns.
Deadlines for Filing
The deadline for all West Virginia sales tax returns is the 20th of the month, unless it is a weekend or federal holiday, in which case the deadline is postponed to the following working day.
Penalties for Filing Late
West Virginia has a late filing penalty of 5.0% every month or partial month, with a maximum penalty of 25.00% of the tax recorded on the tax return.
West Virginia additionally imposes a late payment penalty of 0.5% each month, up to a maximum of 25% of the unpaid tax.