West Virginia issues new rule addressing vendor absorption of sales tax

Retailers in West Virginia will now be permitted to advertise or claim that sales and use tax can be absorbed by the retailer under specific conditions following a new rule issued by the state’s Tax Department.

The rule was put into effect on July 1, 2022, and is scheduled to terminate on August 1, 2027. The practice had not been allowed in the state before 2021.

1. Va. Code R. § 110-15M addresses what requirements must be followed “if a vendor absorbs or assumes sales tax and addresses certain consequences of action.” Application of the rule will not apply to the sales of motor vehicles, fuel tax, or special district excise tax.

Before this rule was enacted, a retailer was not allowed to state or hold out the West Virginia sales tax. This rule enables the retailer to do so under certain circumstances. This is not excluding the transaction from tax but instead moving the sales tax burden to the retailer to absorb the tax and pay it out of pocket to the state and municipalities.

If the taxpayer is a West Virginia retailer or vendor and wishes to utilize this option, the taxpayer should ensure that all provisions of the requirements for absorbing or assuming the tax are met.

(W. Va. Code R. § 110-15M)