By Stephen Smoot
In last week’s Town of Franklin council meeting, elected officials heard the first reading of a proposed ordinance that would impose a one percent – one penny on every dollar spent for certain goods and services – sales and use tax within the town limits.
As Frank Wehrle, Town of Franklin administrator, explained, if passed, “The money raised by the sales tax will go toward general fund expenses, such as street improvements and general maintenance.” With inflation driving up costs of materials, municipalities all over the nation have been forced to make tough financial choices.
The town obtained a template created by the State of West Virginia for its use as it considers the tax. The tax would be placed on, as state code says, “tangible personal property, custom software, and the results of taxable services.” The state tax commissioner would collect the “1 percent of the purchase price” alongside the state sales tax, then separate the town tax from the state and remit it back to the town.
Sales and use taxes would not apply to exempt products. These include “the sale or use of motor fuel,” “the sale or use of motor vehicles,” “the purchase or use of any tangible personal property, custom software, or service that . . . is prohibited from taxing under the laws of this State or the United States,” or other exempt categories.
In other examples, such as the sale of alcoholic beverages, hotel, motel, or other lodging covered under the hotel-motel tax, amusement tax, and special district excise taxes, the sales tax will be in addition to state taxes on these products or services.
If the town passes the ordinance, collection of these taxes would not commence until July 1, 2025, the start of the next fiscal year. Also conditional on passage, the state will require maps from the town to determine which individuals or businesses charged with collecting the tax are in or outside of town limits. Those outside town limits will not be required to collect the tax.
Online sales will reflect this as well. Only businesses located within the town limits will have to collect the sales and use tax. Those based outside of Franklin will not be subject.
