Collection of sales tax expansion begins Jan. 1

CHARLESTON, W.Va. — West Virginia will have sales tax revenue coming from some new sources beginning next year when a new state law kicks in.

The new law calls for those businesses that sell products in West Virginia, online or otherwise, to collect the six percent sales tax if the company itself or a company affiliated with it has a physical presence in the state.

Many West Virginia lawmakers, like those from other states, believe states are losing millions a year on items purchased over the internet because sales tax is not collected.

State Deputy Revenue Secretary Mark Muchow said the new requirement could bring in as much $10 million a year. He said it’s difficult to predict exactly how much will be collected.

The U.S. Supreme Court recently refused to hear a challenge of New York’s online sales tax law earlier this year. Muchow said that’s a much more aggressive law than West Virginia’s but eventually Congress will likely have to decide the issue.

“It’s an uneven playing field out there,” Muchow said. “It’s probably ultimately going to take some action by Congress. The U.S. Supreme Court is saying ‘This is for Congress to decide. We don’t want to get involved,'” Muchow said.

Muchow said the West Virginia change applies to large businesses online or otherwise, which may not necessarily have a home office in West Virginia, but part of its group does have a physical presence here.

“It may not be you but one of the companies affiliated with you that’s part of your group that has a physical presence in the state, then you have to collect taxes in the state of West Virginia,” Muchow said.

The state expects all of the impacted companies to follow the new law.

“As far as I know the taxpayers that are subject to that law change will be complying come January 1st,” Muchow said.  





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