Despite repeated studies by bright and well-intentioned individuals, the bulk of what we might think of as the West Virginia municipal tax system is not part of a grand scheme adopted at a singular moment to further a discrete set of agreed-to goals. Authority to impose municipal taxes has evolved and morphed over time to meet specific needs. Accordingly, a hodge-podge of municipal revenue sources appear in municipal budgets.
The most significant, broad-based municipally administered revenue source is the municipal business and occupation tax. All West Virginia municipalities are granted plenary power to impose a municipal business and occupation tax similar to the State business and occupation tax in effect over 30 years ago. W.Va. Code § 8-13-5. The permissible maximum municipal business and occupation tax rates are generally fixed with respect to a structure in effect a half a century ago (as of January 1, 1959)! W.Va. Code § 11-13-25.
The municipal business and occupation tax has been a workhorse generator of municipal funds as a result of legislation passed more than 70 years ago. See Baldwin v. City of Martinsburg, 133 W.Va. 513, 56 S.E.2d 886 (1949) (discussing W.Va. Acts 1947, Ex. Sess., c. 3). It brings with it all those ancient classification and jurisdictional issues fought under the banner of the former broad-based State business and occupation tax, so the jurisprudence developed over the many years (and discussed at virtually all pre- 1990 West Virginia Tax Institutes) regarding State-level disputes did not become obsolete with the repeal of the broad-based State business and occupation tax 30 years ago.
In addition to at least five published West Virginia Supreme Court of Appeals decisions dealing with municipal business and occupation taxes after the repeal of the broad-based State business and occupation tax, a number of circuit court cases over the past dozen years have addressed municipal business and occupation tax disputes.
Town of Burnsville v. Kwik-Pik, Inc., 185 W.Va. 696, 408 S.E.2d 646 (1991); Town of Burnsville v. Cline, 188 W.Va. 510, 425 S.E.2d 186 (1992); City of Morgantown v. West Virginia University Medical Corp., 193 W.Va. 614, 457 S.E.2d 637 (1995); Citizens Bank of Weston, Inc. v. City of Weston, 209 W.Va. 145, 544 S.E.2d 72 (W.Va. 2001); City National Bank v. City of Beckley, 213 W.Va. 202, 579 S.E.2d 543 (2003).