The State Tax Department has issued guidance in its Code to Taxpayer on bundled transactions for sales and service tax, as well as use tax.
For purposed of West Virginia taxes, a bundled transaction is defined as “a retail sale of two or more distinct and identifiable products, other than real property and services to real property, sold for one non-itemized price.” If a transaction fails to meet any of the elements of the definition, it is not a bundled transaction.
Distinct and identifiable products do not include packaging accompanying the retail sale of a product, products provided free of charge, or items included in the definition of sales price and purchase price. The sales price or purchase price of a bundled transaction is not for one non-itemized price when, the sales price varies with the purchaser’s selection of the distinct and identifiable products, or the price is separately identified by product on binding sales documents.
A transaction is not considered a bundled transaction if it is “a retail sale of tangible personal property and a service where the property is essential to the use of the service and is provided exclusively in connection with the service and the true object of the transaction is the service.” Nor is it a bundled transaction if it is “a retail sale of services where one service is provided that is essential to the use or receipt of a second service and the first service is provided exclusively in connection with the second service and the true object of the transaction is the second service.”
A bundled transaction is not a transaction that includes both taxable and nontaxable products, when the sales price of the taxable products is de minimis. A bundled transaction does not include the retail sale of exempt tangible personal property.
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