Feb 22, 2016
From KPMG TaxWatch
Recently, a West Virginia Administrative Law Judge (ALJ) addressed whether an out-of- state service provider was required to collect and remit West Virginia sales and service taxes. The taxpayer at issue provided exterior facilities maintenance services (e.g., ice and snow removal, landscaping, and window washing) to customers in over twenty states, including West Virginia. Rather than performing the services itself, the taxpayer engaged independent contractors to perform the services for the taxpayer’s customers. Using proprietary software, the taxpayer was able to monitor the work performed by the independent contractors. The taxpayer had no physical presence in West Virginia and did not advertise within the state. The sole issue before the ALJ was whether it was constitutionally permissible under the dormant Commerce Clause for the Tax Commissioner to require the taxpayer to collect and remit West Virginia sales and service taxes.
The Commissioner, relying primarily on the U.S. Supreme Court’s holding in
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