W. Va. Code R. § 110-15-58 - Collection Agencies

58.1. Collection agencies are required to collect consumers sales and service tax on the commissions, fees or other consideration they receive for services rendered on collection transactions which originated within this State. The measure of this tax shall be the amount of consideration received by the agency without deducting any amount paid by the collection agency to other collection agencies which may be involved in the collection process. For example: A doctor who resides and practices medicine in Clarksburg, West Virginia, is owed two hundred dollars ($200.00) by a patient who refuses to pay. The doctor refers the matter to a West Virginia collection agency to collect the debt. They agree that the fee will be fifty percent (50%) of the amount collected. The agency is successful in its efforts and collects the full two hundred dollars ($200.00); therefore, it must bill the doctor its fee of one hundred dollars ($100.00) plus the consumers sales and service tax on such fee. Thus, the agency will retain or the doctor will pay to the agency one hundred and six dollars ($106.00), and the agency will remit six dollars ($6.00) of that amount to the State Tax Department as consumers sales and service tax. Six dollars ($6.00) would be the amount collected and remitted even if the agency paid another collection agency to assist it in collecting the doctor's fee.

58.2. Any collection transaction originating outside this State will not be taxable even though a West Virginia collection agency may be involved in the collection process, and even though such local agency may receive some consideration for work which it does in the collection of a particular debt. For example, if the doctor in the example above resided in and practiced medicine in Columbus, Ohio instead of Clarksburg, West Virginia, the agency would not collect and remit any tax for its services to the doctor.

Notes

W. Va. Code R. § 110-15-58