West Virginia Sales Tax Guide 2024: Compliance, Rates, and Regulations for Ecommerce Businesses

Sales tax at a glance

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West Virginia sales tax rates & calculations in 2023

The West Virginia sales tax rate in 2023 is 6%. This comprises a base rate of 6% plus local rates that can reach up to 1%. Depending on the local sales tax jurisdiction, the total tax rate can be as high as 7%.

List of local sales tax rates in West Virginia

You can look up the full table of sales tax rates in each city and county in West Virginia on the State Tax Department's website. Here’s a small sample:

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Recent tax rate changes in West Virginia

There have been no recent changes to the state or local sales tax rates in West Virginia. The 6% state sales tax rate has remained steady since 2005.

Some West Virginia cities and counties periodically enact or adjust local sales taxes. Businesses should monitor any local rate changes that impact their nexus locations.

FAQs

How do you calculate West Virginia sales tax?

To calculate West Virginia sales tax, use this formula:

Sales tax = (state base rate + local rate) * taxable purchase price

For example: State base rate: 6%

Local rate: 1%

Taxable purchase: $100

Sales tax = (6% + 1%) * $100 = 7% * $100 = $7

Is West Virginia a destination-based or origin-based sales tax state?

West Virginia is a destination-based sales tax state. The applicable tax rate in West Virginia depends on where the customer receives the product.

Is West Virginia a streamlined sales tax state?

Yes, West Virginia has been a full Streamlined Sales and Use Tax Agreement (SSUTA) member since October 1, 2005.

Sales tax nexus table in West Virginia

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FAQs

Do I need a West Virginia seller's permit if I’m only a wholesaler?

If you only make sales for resale and not to end consumers, you may not need a West Virginia seller's permit. However, you may still have sales tax obligations for your taxable purchases. Check with the State Tax Department to confirm.

Do I need a West Virginia seller's permit if I only sell temporarily in the state?

Even temporary selling activity in West Virginia can establish a sales tax nexus requiring a seller's permit and collection obligations. There is no temporary selling exemption in the state.

Exemptions from sales tax in West Virginia

West Virginia provides sales tax exemptions on some specific categories of products and buyers, such as:

• Textbooks
• Prescription drugs
• Certain medical devices
• Purchases made by government agencies
• Certain non-profit organizations

FAQs

Are groceries taxable in West Virginia?

Most grocery food items are exempt from West Virginia sales tax. However, prepared foods, candy, soft drinks, and dietary supplements are still taxable.

Is clothing taxable in West Virginia?

Clothing and footwear are generally taxable in West Virginia. However, there is a sales tax holiday in early August for certain back-to-school items under set price thresholds.

Are digital products taxable in West Virginia?

Yes, West Virginia taxes digital products like music, movies, ebooks, streaming services, software, mobile apps, and more. Cloud software services are also generally taxable.

Is software-as-a-service (SaaS) taxable in West Virginia?

In most cases, SaaS and other cloud software services are considered taxable in West Virginia. However, certain custom software development services can be exempt.

Are services taxable in West Virginia?

West Virginia taxes various services under its sales tax laws, including landscaping, pet grooming, data processing, IT services, and more. Some professional and personal services are exempt.

Excise taxes in West Virginia (alcohol, tobacco, gasoline, fuel, marijuana)

In addition to the general state sales tax, West Virginia levies selective excise taxes on selling or consuming certain products like motor fuels, cigarettes, tobacco, alcohol, and marijuana.

• Motor fuels: Gasoline, diesel, and other fuels are subject to a variable per-gallon excise tax rate calculated monthly by the State Tax Commissioner. This averages around $0.359 per gallon for gasoline. A 5% backup tax is also imposed on the statewide average wholesale price.
• Cigarettes: The cigarette excise tax rate is $1.20 per pack of 20 cigarettes and $1.50 per pack of 25 cigarettes. E-cigarettes and vaping products are taxed as “other tobacco products” at 56.32% of the wholesale price.
• Tobacco products: Cigars, loose tobacco, chewing tobacco, snuff, and other tobacco products besides cigarettes are taxed at an excise rate of 56.32% of the wholesale price.
• Alcohol: Beer is taxed at $0.18 per gallon. Wine is taxed at $1.04 per gallon (table wine) or $2.34 per gallon (fortified wine). Liquor and spirits are taxed at $5.05 per gallon.
• Marijuana: Legal medical marijuana sales in West Virginia are subject to a 10% excise tax on the gross receipts of growers/processors. This functions as a retail excise tax paid by the consumer.

Food and beverage tax in West Virginia

West Virginia does not have a statewide food and beverage tax. However, municipalities and counties may levy certain food taxes on prepared meals.

Remote sellers in West Virginia

Remote sellers with no physical presence in West Virginia may still have economic nexus based on their sales volume or transactions in the state. Such retailers must register and collect West Virginia sales tax if they exceed either:

• $100,000 in annual West Virginia gross sales, OR
• 200 separate West Virginia transactions

A marketplace facilitator tax applies to marketplace providers meeting these thresholds on their third-party sellers' behalf.

Prepaid sales tax rates for fuel products in West Virginia

West Virginia imposes a variable rate excise tax on gasoline and other motor fuels and an additional 5% backup tax calculated on the statewide average wholesale price.

Discretionary taxes in West Virginia (local sales taxes)

Counties and municipalities in West Virginia can impose up to a 1% local sales tax on top of the 6% state sales tax rate. Over 40 local jurisdictions levy a sales tax, with six cities charging the maximum 1% rate.

Collecting sales tax in West Virginia

Let’s explore the requirements and best practices for collecting and remitting West Virginia sales tax.

How to collect sales tax in West Virginia if you are an out-of-state seller

Out-of-state sellers with no West Virginia physical presence may still have economic nexus requiring sales tax collection based on their sales volume or transactions.

Specifically, you must register and collect West Virginia sales tax if you are considered to be "engaged in business" in the state by meeting either of these thresholds:

• Having over $100,000 in annual West Virginia gross sales
• Completing at least 200 separate West Virginia sales transactions

There are also West Virginia sales tax obligations if you have property, employees, contractors, trademarks, or other tangible assets within state borders. Remote sellers can voluntarily register and collect West Virginia sales tax even if not legally required.

Once economic nexus is established, you must complete the West Virginia business registration process and acquire a seller's permit. This allows your business to operate in West Virginia and officially gives you sales tax collection responsibilities.

The West Virginia State Tax Department offers full registration services through its convenient online portal. You'll provide details on your business activities and tax compliance contacts.

Should you collect sales tax on shipping charges in West Virginia?

If shipping fees are separately stated on the invoice, they are generally excluded from West Virginia sales tax. However, handling charges related to taxable goods or services sales are typically considered taxable.

When delivery/shipping fees are built into the total selling price rather than broken out, they take on the same tax status as the overall sale. So, taxable goods with shipping included would see the tax calculated on the entire sale amount.

There are exceptions, so check with the West Virginia State Tax Department if you need clarity on taxing shipping and delivery charges for your specific products and services.

Filing and paying sales taxes in West Virginia

West Virginia requires sellers to file sales tax returns and remit collections to the State Tax Department on a monthly, quarterly, or annual basis, depending on sales volume. Payments must be submitted by the due date for each assigned filing period.

Returns can be filed online through the West Virginia State Tax Department's MyTaxes portal, by phone, or by paper. However, electronic filing is required for sellers with over $25,000 in annual liability.

Sales tax return filing schedule and due dates in West Virginia

The West Virginia State Tax Department assigns each seller a filing frequency of monthly, quarterly, or annual.

Returns and payments are due by the 20th day of the month after each reporting period ends. If the 20th falls on a weekend or holiday, the filing deadline moves to the next business day.

Monthly filing periods and due dates

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Quarterly filing periods and due dates

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Annual filing

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Filing penalties in West Virginia

The penalties for late filing or inaccurate West Virginia sales tax returns are:

• 5% per month up to a maximum of 25% for failure to file taxes
• 0.5% per month up to 25% for failure to pay on time

Criminal tax evasion charges may apply to willful errors and omissions over specific liability amounting to a 50% penalty.

When are returns due in West Virginia?

The monthly, quarterly, or annual West Virginia sales tax returns are due by the 20th after each reporting period closes. The exception is yearly returns, which must be filed by January 30 for the prior calendar year.

Audit & appeals process

Suppose a business is selected for a West Virginia sales tax audit. In that case, the State Tax Department auditor will thoroughly review tax returns, sales records, exemption certificates, and other documents to verify compliance.

Discrepancies may result in assessments for uncollected tax, interest, and penalties. But, businesses have opportunities to contest audit findings through the appeals process.

West Virginia sales tax audit process

The typical stages of a West Virginia sales tax audit include:

• Notification letter: The Tax Department sends an audit notice detailing the scope, timing, contact info, and requested records.
• Initial interview: The auditor explains the audit process and requests data to analyze. This may occur on-site or remotely.
• Fieldwork: The auditor inspects records, conducts sampling/projections, and calculates liability estimates. Additional data may be requested.
• Exit conference: The auditor presents their preliminary findings and calculations. This is a chance for the business to ask questions, present contrary evidence, or dispute methods.
• Assessment letter: A final determination letter with a bill for uncollected tax, interest, and penalties. Includes appeal rights info.

What to expect during the audit?

West Virginia sales tax audits focus on common issues like taxability determinations, exemption certificate compliance, proper sourcing of local taxes, returns accuracy, and timeliness.

Auditors may review sales invoices, bank deposit details, expense records, exemption certificates, and other sources to verify tax calculations and reporting.

After the audit – Appealing the results

If a business disagrees with the auditor's final assessment after an exit conference, it can file a petition for reassessment within 60 days. This appeals to the Tax Commissioner's Office for review.

Further appeals of decisions are possible to the West Virginia Office of Tax Appeals and Kanawha County Circuit Court. Businesses may benefit from sales tax audit defense services throughout the multi-stage appeals process.

How to register for sales tax in West Virginia

Sellers can visit the State Tax Department's online registration system to register for a West Virginia sales tax permit. You'll need to provide details like:

• Business name, address, ownership type
• Federal EIN or SSN
• Estimate of monthly taxable WV sales
• Business start date and industry
• Owner and compliance contacts

Once registered, you must collect and remit sales tax on West Virginia taxable sales. Use sales tax software or manual filing.

Registration requirements for online sellers

Out-of-state online retailers have West Virginia economic nexus for sales tax if they exceed $100,000 in state sales or 200 WV transactions in the current or prior calendar year.

A physical presence like warehouses or local order sourcing creates West Virginia registration requirements. Voluntary early registration is possible, too.

Cost of registration

Registering for a West Virginia business license and sales tax permit costs $30. However, additional fees, taxes, or bonds may sometimes apply.

More Information & Contacts

For West Virginia sales tax questions or audit disputes, contact:

• West Virginia State Tax Department
• Phone: (304) 558-3333
• Website: tax.wv.gov

There you have it—a comprehensive guide on West Virginia's sales tax regime. Need help filing taxes for your Shopify store? Get a demo with Numeral now.