West Virginia Adopts New Regulations Outlining Per Se Exemption for Construction Contractors Performing Work for Public Projects

Saturday, November 19, 2011

West Virginia recently adopted new regulations concerning per se sales tax exemptions for construction contractors working for public service districts or government-owned water or sewer utilities. According to the new regulations, which take effect November 15, 2011, "purchases of services, machinery, supplies, or materials, except gasoline and special fuel, to be directly used or consumed in the construction, alteration, repair or improvement of a new or existing public utility structure or system by a contractor a subcontractor providing contracting services to a public utility are per se exempt from Consumers Sales and Service Tax and Use Tax."

The exemption applies to purchases of tangible personal property that will remain on the construction site, rentals of construction equipment, and purchases made by subcontractors that would otherwise qualify for the exemption if purchased by the prime contractor. However, the exemption does not apply to purchases of property that will become property of the contractor or subcontractor and are removed from the construction site upon completion of the contract.

Because the exemption is per se, no exemption certificate is required to claim it. Contractors and subcontractors may claim the exemption by either submitting a refund claim to the Tax Department or providing Form WV CST-286, "Special Contractors Exempt Purchases Certificate" when making qualifying purchases. The form must contain the public utility’s tax identification number.

 

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