West Virginia Sales Tax Guide
Chapter 1: An introduction to West Virginia sales tax management
Learn about sales tax automation
Introducing our Sales Tax Automation 101 series. The first installment covers the basics of sales tax automation: what it is and how it can help your business.
Sales tax is a tax paid to a governing body (state or local) for the sale of certain goods and services. First enacted in the United States in 1921, sales tax dates back to ancient Egyptian times where paintings depict the collection of tax on commodities. West Virginia first adopted a general state sales tax in 1921. Since that time, the rate has risen to 6. In the second quarter of 2015, the West Virginia State Tax Department reported $327,767 in revenue from taxes on general sales and gross receipts; 20.5% of total West Virginia state taxes.
As a business owner selling taxable goods or services, you act as an agent of the state of West Virginia by collecting tax dollars from purchasers and passing it along to the state and local tax authority. This is an important point worth emphasizing. Any sales tax collected from residents belongs to the West Virginia State Tax Department. As a business owner, it is your responsibility to manage the taxes you collect to remain in compliance with state laws and avoid penalty and interest payments.When does West Virginia sales tax need to be collected?
In West Virginia, sales tax is collected on the sale of tangible goods and some services. The tax is collected by the seller and remitted to state and local tax authorities. The seller acts as a pseudo-tax collector.Do I need to collect sales tax in West Virginia?
To better understand whether you need to collect sales tax in West Virginia, we've created a simple three step checklist you can use to get a better feel for your West Virginia tax situation:
- Do I have nexus in West Virginia?
- Am I selling taxable goods or services to West Virginia residents?
- Is my buyer required to pay sales tax?
If the answer to all three of the questions above is "Yes", then you are required by the West Virginia State Tax Department to collect, file, and remit sales tax.Does sales tax accept out-of-state resale certificates?
Yes! At the time of publication, the West Virginia State Tax Department is accepting out-of-state resale certificates.What happens if I don't collect any sales tax?
If you meet the criteria for collecting sales tax (nexus in West Virginia and selling taxable goods or services to taxable residents) and choose not to collect sales tax, you will be held responsible for the tax due. As such it is extremely important that you set up tax collection at the point of sale. Attempting to contact customers to collect sales tax after the fact is time consuming and unlikely to be fruitful.Is West Virginia a Streamlined Sales Tax (SST) state?
At this time, West Virginia is a full member of the Streamlined Sales Tax (SST) Agreement.What state sourcing rules apply to West Virginia?
West Virginia is a destination-based state. Destination-based states are those where the transaction location is defined as the customer delivery location rather than the shipping location of the business. As a seller in West Virginia, this means you are responsible for applying the sales tax rate determined by the ship-to address on all taxable sales.