West Virginia Consumer Sales and Use Tax Protest, Refund Claim, and OTA Petition

WEST VIRGINIA CONSUMER SALES AND USE TAX PROTEST AND REFUND CLAIM

TABLE OF CONTENTS

1. Cover Letter — Informal Protest of Sales/Use Tax Audit
2. Caption — Office of Tax Appeals
3. Verified Petition for Reassessment (Sales/Use Tax)
4. Refund Claim under W. Va. Code § 11-10-14
5. Wayfair / Economic Nexus Position Statement (§ 11-15A-6b)
6. Statement of Facts and Argument
7. Relief Requested
8. Verification, Power of Attorney, and Service
9. West Virginia Practice Notes
10. Sources and References

1. COVER LETTER — INFORMAL PROTEST OF SALES/USE TAX AUDIT

[DATE]

West Virginia Tax Division
Compliance and Taxpayer Services Division
1001 Lee Street East
Charleston, WV 25301

Re: Informal Protest — Consumer Sales / Use Tax Audit
Taxpayer: [TAXPAYER NAME]
Account ID: [________________________________]
FEIN: [XX-XXXXXXX]
Audit Period(s): [DATES]

Dear Sir or Madam:

This letter is a timely informal protest of the proposed sales and use tax adjustment described in the auditor's preliminary findings dated [DATE]. Taxpayer respectfully requests a closing conference before any Notice of Assessment is issued.

1. Disputed Adjustments. Taxpayer disputes the following:

2. Grounds. The adjustments are erroneous because:
   - The transactions qualify for the [manufacturing / production / direct-use / resale] exemption under W. Va. Code § 11-15-9(b)(__);
   - Exemption certificates were obtained in good faith and on file (W. Va. Code § 11-15-9a);
   - The auditor's projection sample is statistically defective; and
   - Penalties should be abated for reasonable cause under W. Va. Code § 11-10-18a.

3. Documents Enclosed / To Follow. Exemption certificates; vendor documentation; engineering/use studies; sampling-methodology objections.

4. Reservation. This protest is without prejudice to a verified Petition for Reassessment to the Office of Tax Appeals within sixty (60) days of any Notice of Assessment under W. Va. Code §§ 11-10-9 and 11-10A-9.

Respectfully,

[________________________________]

[ATTORNEY / REPRESENTATIVE NAME]

2. CAPTION — OFFICE OF TAX APPEALS

STATE OF WEST VIRGINIA

OFFICE OF TAX APPEALS

DOCKET NO. [________________________________]

VERIFIED PETITION FOR REASSESSMENT — CONSUMER SALES AND USE TAX

3. VERIFIED PETITION FOR REASSESSMENT (SALES/USE TAX)

Petitioner [TAXPAYER NAME], by counsel, pursuant to W. Va. Code §§ 11-10-8, 11-10-9, 11-10A-8, 11-10A-9, and 11-10A-10, and 121 C.S.R. 1, petitions the West Virginia Office of Tax Appeals for reassessment of the consumer sales and use tax assessment described herein, and states:

1.1. Petitioner. Petitioner is a [corporation / LLC / individual] doing business at [ADDRESS], holding West Virginia Business Registration Certificate No. [________].

1.2. Respondent. West Virginia State Tax Commissioner, 1001 Lee Street East, Charleston, WV 25301.

1.3. Tax Type. Consumer Sales and Service Tax (W. Va. Code Ch. 11, Art. 15) and / or Use Tax (W. Va. Code Ch. 11, Art. 15A).

1.4. Tax Periods. [MONTHLY / QUARTERLY PERIODS COVERED].

1.5. Notice of Assessment. Tax Commissioner issued a Notice of Assessment dated [DATE], Letter ID [____], asserting:

A true and correct copy is attached as Exhibit A.

1.6. Date Served. Petitioner was served on [DATE].

1.7. Timeliness. This Petition is filed within sixty (60) calendar days of service and is timely under W. Va. Code §§ 11-10-9 and 11-10A-9.

1.8. Jurisdiction. OTA has jurisdiction under W. Va. Code § 11-10A-8.

Assignments of Error

3.1. The Tax Commissioner erred in assessing use tax on [CATEGORY] purchases that qualify for the [MANUFACTURING / DIRECT-USE / RESALE] exemption under W. Va. Code § 11-15-9(b)(__);

3.2. The Tax Commissioner erred in disregarding exemption certificates obtained in good faith from purchasers under W. Va. Code § 11-15-9a;

3.3. The Tax Commissioner erred in applying a statistical sample that is biased and does not satisfy generally accepted sampling standards;

3.4. The Tax Commissioner erred in asserting nexus over Petitioner as a remote seller because Petitioner did not exceed the $100,000 OR 200-transaction threshold of W. Va. Code § 11-15A-6b in the relevant lookback period;

3.5. The Tax Commissioner erred in imposing penalties under W. Va. Code §§ 11-10-18 and 11-10-18a notwithstanding Petitioner's reasonable cause and good-faith reliance;

3.6. The Assessment is barred in whole or in part by the limitations period of W. Va. Code § 11-10-15.

(Statement of Facts, Legal Argument, and Relief follow in Parts 6 and 7.)

4. REFUND CLAIM UNDER W. VA. CODE § 11-10-14

[DATE]

West Virginia Tax Division
Refund Section / Compliance Division
1001 Lee Street East
Charleston, WV 25301

Re: Claim for Refund of Sales and/or Use Tax
W. Va. Code § 11-10-14
Taxpayer / Claimant: [NAME]
FEIN / SSN: [__________]
Account ID: [__________]
Refund Periods: [DATES]
Amount Claimed: $[AMOUNT]

Dear Sir or Madam:

Pursuant to W. Va. Code § 11-10-14, the undersigned (the "Claimant") hereby files a claim for refund of consumer sales and/or use tax overpaid for the periods indicated.

4.1. Basis for Refund

☐ Sales tax paid on a transaction qualifying for an exemption under W. Va. Code § 11-15-9(b)(__);
☐ Use tax remitted in error on property purchased for resale (W. Va. Code § 11-15-9(a)(9));
☐ Tax paid on transaction not subject to WV jurisdiction (e.g., interstate commerce, drop shipment);
☐ Tax double-paid to vendor and accrued by purchaser;
☐ Mathematical or computational error in returns as filed;
☐ Federal or state court determination that tax is not due;
☐ Wayfair / nexus — tax remitted prior to crossing § 11-15A-6b threshold;
☐ Other: [DESCRIBE].

4.2. Computation of Refund

4.3. Statute of Limitations

This claim is filed within three (3) years of the due date of the return for the earliest period covered, as required by W. Va. Code § 11-10-14(l), and is therefore timely.

4.4. Documents Enclosed

• Copies of returns as filed;
• Invoices and proof of payment;
• Exemption certificates (if applicable);
• Spreadsheet schedule of refund computation;
• Form WV-2848 Power of Attorney.

4.5. Relief Requested

Claimant respectfully requests a refund of $[AMOUNT], with interest as provided by W. Va. Code § 11-10-14a, payable to [CLAIMANT NAME] at [ADDRESS].

4.6. Reservation of Appeal Rights

If this claim is denied in whole or in part, Claimant intends to file a petition with the Office of Tax Appeals within sixty (60) calendar days of the denial, as authorized by W. Va. Code §§ 11-10-14(p) and 11-10A-9.

Respectfully,

[________________________________]

[CLAIMANT / REPRESENTATIVE]

5. WAYFAIR / ECONOMIC NEXUS POSITION STATEMENT (§ 11-15A-6b)

5.1. Statutory Threshold

A remote seller, marketplace facilitator, or referrer must collect West Virginia consumer sales and use tax on West Virginia sales when, in the immediately preceding calendar year OR the current calendar year, the seller's West Virginia sales:

(1) Equal or exceed $100,000 in gross revenue; OR

(2) Are made in 200 or more separate transactions.

W. Va. Code § 11-15A-6b. The thresholds are disjunctive: crossing either triggers the collection duty.

5.2. Petitioner's Position

5.2.1. No nexus. Petitioner did not cross either threshold during the period at issue and accordingly had no obligation to register, collect, or remit West Virginia consumer sales or use tax. The supporting transaction analysis is attached as Exhibit __.

5.2.2. Marketplace facilitator collection. A subset of Petitioner's sales were made through marketplace facilitators that were themselves obligated to collect under § 11-15A-6b(c). Sales facilitated by such marketplace facilitators must be excluded from the assessed measure of Petitioner's tax liability.

5.2.3. Wayfair safe harbor. Under South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), a state's economic nexus statute satisfies the dormant Commerce Clause only where, inter alia, the state provides a "safe harbor" for sellers who transact only limited business and does not impose retroactive collection obligations. Any retroactive collection obligation asserted against Petitioner before its threshold crossing is unconstitutional.

5.2.4. Registration and prospective compliance. Petitioner registered with the West Virginia Tax Division on [DATE] through the Streamlined Sales Tax Registration System and is in current compliance going forward.

5.2.5. Penalty abatement — first-time compliance. Penalties asserted for periods immediately following first threshold crossing should be abated for reasonable cause where Petitioner promptly registered and remitted upon becoming aware of the obligation.

5.3. Documentation Submitted

6. STATEMENT OF FACTS AND ARGUMENT

6.1. Statement of Facts

6.1.1. Petitioner is a [describe business] with [describe operations] in West Virginia (or, in the case of a remote seller, with sales destined for West Virginia).

6.1.2. [CHRONOLOGY OF AUDIT — including audit notice, IDRs, conferences, and proposed adjustments.]

6.1.3. [DESCRIPTION OF TRANSACTIONS AT ISSUE — including invoice exemplars, customer types, end-use, and any exemption certificates.]

6.1.4. [NEXUS / VOLUME DATA, where relevant — including § 11-15A-6b threshold analysis.]

6.2. Argument

6.2.1. Exemption — manufacturing / production / direct-use. West Virginia exempts sales of services, machinery, supplies, and materials directly used or consumed in the activity of manufacturing under W. Va. Code § 11-15-9(b). The "directly used" test is satisfied when the property is integral and essential to the production process. [APPLY TO FACTS.]

6.2.2. Exemption — sale for resale. Property purchased for resale in the regular course of business is exempt under W. Va. Code § 11-15-9(a)(9) where the purchaser holds a valid resale certificate (W. Va. Code § 11-15-9a). [APPLY TO FACTS.]

6.2.3. Exemption certificates received in good faith. A vendor that accepts a properly completed exemption certificate at the time of sale is relieved of liability under W. Va. Code § 11-15-9a, even if the certificate is later determined to be invalid, absent actual knowledge of falsity.

6.2.4. Use tax — tax paid to other state. Use tax does not apply to property on which a like tax has been paid to another state, to the extent of the credit allowed under W. Va. Code § 11-15A-10a.

6.2.5. Statistical sampling defects. The auditor's sample is not representative because [explain bias, sample size, stratification errors]. A defective sample cannot supply prima facie support for an assessment.

6.2.6. Wayfair / nexus. As described in Part 5, Petitioner did not satisfy the § 11-15A-6b threshold. The dormant Commerce Clause prohibits retroactive collection.

6.2.7. Penalty abatement. Reasonable cause exists under W. Va. Code § 11-10-18a because [reliance on counsel, complexity of issue, first-time controversy, good-faith dispute as to legal interpretation].

6.2.8. Statute of limitations. Any portion of the Assessment outside the three-year window of W. Va. Code § 11-10-15 is time-barred.

7. RELIEF REQUESTED

WHEREFORE, Petitioner respectfully requests that the Office of Tax Appeals enter an order:

• A. Cancelling the Notice of Assessment in its entirety; or alternatively
• B. Reducing the Assessment to $[AMOUNT] consistent with the corrections set forth herein;
• C. Granting the refund claim in the amount of $[AMOUNT] with statutory interest under W. Va. Code § 11-10-14a;
• D. Abating all penalties and additions to tax;
• E. Awarding costs and attorney's fees as permitted by law; and
• F. Such other and further relief as is just and equitable.

8. VERIFICATION, POWER OF ATTORNEY, AND SERVICE

8.1. Verification

STATE OF WEST VIRGINIA

COUNTY OF [COUNTY]

I, [TAXPAYER NAME], being first duly sworn, depose and state under oath that I am the Petitioner / Claimant (or duly authorized officer) in the foregoing Petition / Claim; that I have read the same and know the contents thereof; and that the facts stated therein are true to the best of my knowledge, information, and belief.

[________________________________]

[TAXPAYER NAME / TITLE]

Sworn to and subscribed before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public

(My Commission Expires: [_______________])

8.2. Power of Attorney

A completed Form WV-2848 (Power of Attorney) is attached as Exhibit __.

8.3. Signature

Date: [DATE]

Respectfully submitted,

[LAW FIRM / CPA FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], W.Va. State Bar No. [####]

Counsel for Petitioner

[STREET ADDRESS]

[CITY, STATE ZIP]

Telephone: [NUMBER] | Email: [EMAIL]

8.4. Certificate of Service

I certify that on this [____] day of [_______________], 20[____], the foregoing was filed with the West Virginia Office of Tax Appeals, 1900 Kanawha Boulevard, East, Building 3, Suite 100, Charleston, WV 25305, and served on the West Virginia State Tax Commissioner via certified U.S. mail, return receipt requested.

[________________________________]

[ATTORNEY NAME]

9. WEST VIRGINIA PRACTICE NOTES

• 60-day deadline (Notice of Assessment). Petition for reassessment must be filed with OTA within sixty (60) calendar days of service of the Notice of Assessment under W. Va. Code §§ 11-10-9 and 11-10A-9. Jurisdictional and not equitably tolled.
• 3-year deadline (Refund claims). Refund claims under W. Va. Code § 11-10-14 must be filed within three (3) years of the due date of the return at issue. Different rules apply where there is a federal final determination (six-month tail) or where the parties have an extension agreement.
• 60-day deadline (Refund denial). A taxpayer may petition OTA within sixty (60) days of a denial of a refund claim under W. Va. Code § 11-10-14(p).
• Wayfair / § 11-15A-6b. West Virginia adopted economic nexus effective January 1, 2019, with thresholds of $100,000 in gross revenue OR 200 separate transactions in the immediately preceding or current calendar year. The statute also imposes collection on marketplace facilitators and referrers.
• Streamlined Sales Tax. West Virginia is a full member of the Streamlined Sales and Use Tax Agreement. Use the SSUTA exemption certificate (Form F0003) where available.
• Manufacturing / direct-use exemption. W. Va. Code § 11-15-9(b)(__) exempts property and services directly used in manufacturing. The "directly used" definition (W. Va. Code § 11-15-2(b)(8)) is critical and frequently litigated.
• Drop shipments. Where a remote retailer drop-ships into WV, the WV-registered shipper may accept a multistate exemption certificate (MTC Uniform or SSUTA) under W. Va. C.S.R. § 110-15-104.
• Sampling. The Tax Division relies heavily on stratified random sampling for sales/use audits. Demand a written sampling agreement before sampling commences. Object to projection where the underlying population is materially different from the sample stratum.
• Records retention. W. Va. Code § 11-10-7 and W. Va. C.S.R. § 110-15-14 / 14a require preservation of sales and exemption records for at least three years; longer if any limitation period remains open.
• Penalty defense. Reasonable-cause abatement is available under W. Va. Code § 11-10-18a; in sales/use cases, document collection-system limitations and good-faith reliance on advisors.
• Local sales taxes. Many WV municipalities have imposed additional 1% municipal sales/use taxes administered by the State Tax Division. These follow state-tax exemption and procedural rules.
• Successor liability. A purchaser of a business may inherit unpaid sales-tax liabilities under W. Va. Code § 11-15-32. Always obtain a tax-clearance certificate before closing.
• Interest on refunds. Interest on overpayments accrues from the date of overpayment under W. Va. Code § 11-10-14a; insist that the Tax Division compute interest correctly.
• Judicial review. Appeal from an adverse OTA decision lies to the Circuit Court of Kanawha County (or, where authorized, to the circuit court of taxpayer's residence/principal place of business) within sixty (60) days under W. Va. Code § 11-10A-19.

10. SOURCES AND REFERENCES

• W. Va. Code Ch. 11, Art. 15 (Consumers Sales and Service Tax) — https://code.wvlegislature.gov/11-15/
• W. Va. Code Ch. 11, Art. 15A (Use Tax) — https://code.wvlegislature.gov/11-15A/
• W. Va. Code § 11-15A-6b (Marketplace facilitators / remote sellers) — https://code.wvlegislature.gov/11-15A-6B/
• W. Va. Code § 11-10-14 (Overpayments; credits; refunds; limitations) — https://code.wvlegislature.gov/11-10-14/
• W. Va. Code Ch. 11, Art. 10A (Office of Tax Appeals) — https://code.wvlegislature.gov/11-10A/
• 121 C.S.R. 1 — OTA Procedural Rules — https://taxappeals.wv.gov/SiteCollectionDocuments/Procedural%20Rules.pdf
• W. Va. C.S.R. tit. 110, ser. 15 (Sales and Use Tax) — https://www.law.cornell.edu/regulations/west-virginia
• South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018)
• WV Tax Division — https://tax.wv.gov/
• WV Office of Tax Appeals — https://taxappeals.wv.gov/
• Streamlined Sales Tax Governing Board — https://www.streamlinedsalestax.org/
• TSD-300 — Sales and Use Tax — https://tax.wv.gov/

Disclaimer: This template is provided for informational purposes only and does not constitute legal or tax advice. A West Virginia-licensed tax attorney must review and customize this document before filing. Statutory deadlines are jurisdictional. Verify all citations and current procedures before use.