West Virginia recently adopted regulations governing a per se exemption from the consumers’ sales and service tax and use tax for contractor purchases relating to contracting services provided to government-owned or public service district water or sewer utilities. The exemption is effective November 15, 2011. This exemption represents an expansion of the various industries for which contractors may claim exemption on qualifying purchases.
The exemption will be applicable to purchases by contractors and subcontractors of machinery, materials, supplies and services for direct use or consumption in the construction, alteration, repair or improvement of a new or existing public utility structure or system when the contractor or subcontractor is providing contracting services to the public utility. The exemption is limited to government-owned water and/or sewer utilities, public service district water and/or sewer utilities, or a combination of these entities. The exemption is not applicable to privately owned water or sewer utilities or contractors providing contracting services to such entities.
Since the exemption is per se, no exemption certificate is required to claim it. A contractor or subcontractor can either use Form WV CST-286 and note the public utility’s tax identification number for each qualifying purchase or pay the applicable sales tax and claim a refund.
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