Construction Contractors May Take Advantage of Nonprofit Youth Organization Exemption in West Virginia

Mar 28th, 2012

The West Virginia legislature recently enacted legislation allowing construction contractors to take advantage of sales tax exemptions for nonprofit youth organizations when the contractors perform work for such organizations (West Virginia Senate Bill 555). Previously, construction contractors making purchases of services, building materials, and tangible personal property had to pay sales tax on these items. The construction contractors could not claim an exemption on the items purchased simply by virtue of the fact that the items would be used in performing work for a tax exempt entity. The sales tax exemption would only apply if the nonprofit youth organization purchased the items themselves.

The recently passed legislation, which amends W. Va. Code Ann. sec. 11-15-8d, allows nonprofit youth organizations to pass their exemption through to construction contractors performing work on their behalf. For purposes of the statute, "nonprofit youth organization" is defined as "any nonprofit organization, including any subsidiary, affiliated or other related entity within its corporate or business structure, that has been chartered by the United States Congress to help train young people to do things for themselves and others, and that has been established in an area of at least six thousand contiguous acres within West Virginia in which to provide adventure or recreational activities for these young people and others." The amendment becomes effective July 1, 2012 and terminates June 30, 2022.