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Martinsburg latest W.Va. city to impose sales tax

MARTINSBURG, W.Va. — Businesses within the city limits of Martinsburg should soon receive a notice from the city that the 1 percent municipal sales tax goes into effect July 1, and all businesses that must collect the state sales tax must start collecting the city sale tax.

The 1 percent sales tax is one of the powers granted the city last year, when it became part of the West Virginia Municipal Home Rule Pilot Program Phase II.

To assess the sales tax, the city had to either eliminate or reduce its business and occupation tax. City Council members voted to eliminate the B&O tax on amusement businesses and reduce the B&O tax on retail and wholesale businesses by 10 percent.

Charles Town and Ranson also were accepted into the Home Rule Pilot Program. Both passed 1 percent sales taxes as well.

Mark Spickler, Martinsburg’s finance director, estimates the city will get about $2.4 million in sales tax revenues annually. He estimates the city will lose about $300,000 annually in B&O tax revenues with the reductions.

The notices are going to all businesses that pay the city’s business and occupation tax, Spickler said Wednesday in a telephone interview. Not all businesses that pay the B&O tax must also pay the sales tax, such as professional services, but by sending the notice to all businesses, he is sure to cover every possibility.

Businesses will have to remit the 6 percent state sales tax plus the 1 percent municipal sales tax to the state tax department on a quarterly basis. The state tax department should then send Martinsburg its sales tax revenue sometime in October.

Businesses should have received email notices from the state tax department about collecting the additional 1 percent municipal sales tax, Spickler said.

“But what we’re hearing, a lot of businesses have never been notified,” he said. “I’m mailing 3,500 copies of the notice. We’re trying to get the word out that people need to change their cash registers to 7 percent sales tax. And businesses outside the city doing business inside the city, they have to charge the additional 1 percent sales tax on work inside the city.”

If a business does not collect and remit the sales tax, the state tax department will bill the business for the tax, Spickler said, and then the business “will have to eat it,” meaning the business will have to pay the tax itself without collecting it from customers. Penalties and interest also will be attached to the payment by the state, he said.

The notice will include information about how to calculate the sales tax with the additional 1 percent city sales tax, what businesses are required to collect the city sales tax, the local use tax, when to charge the local tax and what items are exempt.

For more information about the state tax department’s local sales and use tax, go to www.wva.state.wv.us/wvtax/ or call 304-558-3333 or 800-982-8297 between 8 a.m. and 5 p.m. Mondays through Fridays.

– Staff writer John McVey can be reached at 304-263-3381, ext. 128.

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