HOUSE BILL NO.         

Excise tax amendments.

Sponsored by:  Joint Revenue Interim Committee

A BILL

for

AN ACT relating to taxation and revenue; providing amendments to excise tax provisions as specified; clarifying the exemption for business personal property when a business is sold; providing for a tax on admission to places of recreation and equipment used as specified; clarifying the exemption for motor vehicles used in interstate commerce; imposing penalties for failure to remit collected excise taxes; requiring a nonresident contractor to register a construction project as specified; clarifying tax liability of a subcontractor hired to provide labor only to the improvement of real property; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.  W.S. 39-15-101(a)(vii)(M), 39-15-103(a)(i)(H), 39-15-105(a)(ii)(B), 39-15-108(c)(iv), 39-15-303(b)(ii) and by creating a new paragraph (iv), 39-16-101(a)(iii)(M), 39-16-105(a)(ii)(A), 39-16-108(c)(xiv) and 39-16-303(b)(ii) and by creating a new paragraph (iv) are amended to read:

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Issue #2.  Exempt tangible personal property that is part of business when the business is sold and certain conditions are met.

39-15-101.  Definitions.

(a)  As used in this article:

(vii)  "Sale" means any transfer of title or possession in this state for a consideration including the fabrication of tangible personal property when the materials are furnished by the purchaser but excluding an exchange or transfer of tangible personal property upon which the seller has directly or indirectly paid sales or use tax incidental to:

(M)  The sale of a business entity when sold to a purchaser of all or substantially all not less than eighty percent (80%) of the value of all of the assets which are located in this state of the business entity when the purchaser continues to use the tangible personal property in the operation of an ongoing business entity in this state.  As used in this subparagraph, "business entity" means and includes an individual, partnership, corporation, corporate division, joint stock company or any other association or entity, public or private, or discreet business unit thereof.

39-16-101.  Definitions.

(a)  As used in this article:

(iii)  "Sale" means the transfer of title or possession of tangible personal property from a vendor for a consideration for storage, use or other consumption in Wyoming excluding the exchange or transfer of tangible personal property upon which the seller has directly or indirectly paid sales or use tax incidental to:

(M)  The sale of a business entity when sold to a purchaser of all or substantially all not less than eighty percent (80%) of the value of all of the assets which are located in this state of the business entity when the purchaser continues to use the tangible personal property in the operation of an ongoing business entity in this state.  As used in this subparagraph, "business entity" means and includes an individual, partnership, corporation, corporate division, joint stock company or any other association or entity, public or private, or discreet business unit thereof.

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Issue #3.  Tax admissions to places of recreation.

39-15-103.  Imposition.

(a)  Taxable event.  The following shall apply:

(i)  Except as provided by W.S. 39-15-105, there is levied an excise tax upon:

(H)  The sales price paid for each admission to, or user fee charged for the use of any place of amusement, entertainment, recreation, games or athletic event or the equipment located on such facility, whether indoors or outdoors. If any persons other than employees, officers of the law on official business or children under twelve (12) years of age are admitted free or at reduced rates to any such place when an admission charge is made to other persons, an equivalent tax shall be paid by these persons based on the price charged to other persons;

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Issue #6.  Clarify exemption granted to motor vehicles used in interstate commerce to those vehicles in excess of 10,000 pounds gross vehicle weight.

39-15-105.  Exemptions.

(a)  The following sales or leases are exempt from the excise tax imposed by this article:

(ii)  For the purpose of exempting sales of services and tangible personal property protected by federal law, the following are exempt:

(B)  Sales of railroad rolling stock including locomotives purchased by interstate railroads, aircraft purchased by interstate air carriers which are holders of valid United States civil aeronautics board permits or authorities and trucks, truck-tractors, trailers, semitrailers and passenger buses in excess of ten thousand (10,000) pounds gross vehicle weight which are purchased by common or contract interstate carriers or which are operating in interstate commerce under exemption clauses in federal law if they are to be substantially used in interstate commerce;

39-16-105.  Exemptions.

(a)  The following purchases or leases are exempt from the excise tax imposed by this article:

(ii)  For the purpose of exempting sales of services and tangible personal property protected by federal law, the following are exempt:

(A)  Railroad rolling stock including locomotives purchased by interstate railroads, aircraft purchased by interstate air carriers which are holders of valid United States civil aeronautics board permits or authorities and trucks, truck-tractors, trailers, semitrailers and passenger buses in excess of ten thousand (10,000) pounds gross vehicle weight which are purchased by common or contract interstate carriers or and which are operating in interstate commerce under exemption clauses in federal law if they are to be substantially used in interstate commerce;

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Issue #8.  Provide an enforcement tool for a vendor who collects but fails to remit excise taxes.

39-15-108.  Enforcement.

(c)  Penalties.  The following shall apply:

(iv)  Any vendor who under the pretense of collecting the taxes imposed by this article collects and retains an excessive amount or who intentionally fails to remit to the department the full amount of taxes when due is guilty of:

(A)  A misdemeanor if the amount of taxes collected is five hundred dollars ($500.00) or less punishable by a fine of not more than seven hundred fifty dollars ($750.00), or imprisonment in the county jail for not more than six (6) months, or both; or

(B)  A felony if the amount of taxes collected exceeds five hundred dollars ($500.00) punishable by a fine of not more than five thousand dollars ($5,000.00), or imprisonment for not to exceed three (3) years, or both.

39-16-108.  Enforcement.

(c)  Penalties.  The following shall apply:

(xiv)  W.S. 39-15-108(b)(ii), (c)(iv) and 39-15-107(b)(iv) apply to use taxes under this article;

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Issue #9.  Provide a method of insuring the state against the nonpayment of tax by a nonresident contractor.

39-15-303.  Imposition.

(b)  Taxpayer.  The following shall apply:

(iv)  Any nonresident prime contractorand any resident prime contractor who hires a nonresident subcontractor shall register any project with the department of revenue not less than fifteen (15) days following the start of a project pursuant to a contract.  The nonresident prime contractor shall provide a properly executed bond as required by paragraph (iii) of this subsection, or a cash deposit of not less than four percent (4%) of the total payments due under the contract.  The cash deposit shall be refunded to the contractor upon the department's receipt of a properly executed surety bond or upon satisfactory completion of the project.  Failure to register with the department within the time period required by this paragraph shall result in a penalty assessment of one percent (1%) of the total payments due under the contract.

39-16-303.  Imposition.

(b)  Taxpayer.  The following shall apply:

(iv)  Any nonresident prime contractor and any resident prime contractor who hires a nonresident subcontractor shall register any project with the department of revenue not less than fifteen (15) days following the start of a project pursuant to a contract.  The nonresident prime contractor shall provide a properly executed bond as required by paragraph (iii) of this subsection, or a cash deposit of not less than four percent (4%) of the total payments due under the contract.  The cash deposit shall be refunded to the contractor upon the department's receipt of a properly executed surety bond or upon satisfactory completion of the project.  Failure to register with the department within the time period required by this paragraph shall result in a penalty assessment of one percent (1%) of the total payments due under the contract.

***  STAFF COMMENTS ***

Issue #10.  Clarify there is no tax due for a contractor who hires a subcontractor to provide "labor only to real property".

39-15-303.  Imposition.

(b)  Taxpayer.  The following shall apply:

(ii)  Any subcontractor who contracts with a general or prime contractor is liable for sales taxes as a general or prime contractor. The general or prime contractor shall withhold three percent (3%), plus the increased rate under W.S. 39-15-104(b) if the tax under that section is in effect, of the payments due a nonresident subcontractor arising out of the contract entered into between both contractors. The contractor shall withhold the payments until the subcontractor furnishes him with a certificate issued by the department showing all sales taxes accruing by reason of the contract between them have been paid. The department may demand the withholdings at any time to satisfy the sales tax liability of the subcontractor and any balance shall be released by the department to him. If a contractor fails to withhold payments or refuses to remit them upon demand by the department he is liable for any sales taxes due the state by the nonresident subcontractor.  This paragraph shall not apply to any subcontractor hired to provide labor only to alter, construct, improve or repair real property;

39-16-303.  Imposition.

(b)  Taxpayer.  The following shall apply:

(ii)  Any subcontractor who contracts with a general or prime contractor is liable for use taxes as a general or prime contractor. The general or prime contractor shall withhold three percent (3%), plus the increased rate under W.S. 39-16-104(b) if the tax under that section is in effect, of the payments due a nonresident subcontractor arising out of the contract entered into between both contractors. The contractor shall withhold the payments until the subcontractor furnishes him with a certificate issued by the department showing all use taxes accruing by reason of the contract between them have been paid. The department may demand the withholdings at any time to satisfy the use tax liability of the subcontractor and any balance shall be released by the department to him. If a contractor fails to withhold payments or refuses to remit them upon demand by the department he is liable for any use taxes due the state by the nonresident subcontractor.  This paragraph shall not apply to any subcontractor hired to provide labor only to alter, construct, improve or repair real property;

Section 2.  This act is effective July 1, 2001.

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