Bluefield Daily Telegraph, Bluefield, WV

Local News

June 30, 2014

Realtors, city disagree over B&O tax

BLUEFIELD — Whether real estate agents selling property within the city of Bluefield are required to pay B&O taxes to the city is a question now being considered.

The city recently notified real estate agents that they were required to purchase licenses in the city, according to Sue Williams, president of the Mercer/Tazewell County Board of Realtors. Real estate agents do not agree that they should buy a license or pay B&O taxes, and are waiting to see what the city will do, she said.

The notices came earlier in June, and there were no public hearings to explain the situation, Williams said.

According to city code, real estate agents are responsible for a portion of B&O taxes and are required to have a business license to conduct business in the city, said Mayor Tom Cole.

“I would also say we recognize that there are some inefficiencies, and we will be working to resolve it and come up with an updated policy,” Cole said.

Bluefield has submitted a home rule application to the state, and a presentation will be made to state officials on July 7, he said. West Virginia’s Home Rule Program allows municipalities to identify rules that may restrict the capability to conduct their public duties. Some items Bluefield could consider if it receives home rule status include retail sales tax implementation, on-spot citations, and the procurement of architect and engineering services. It would also allow the city to make adjustments in its B&O tax structure, Cole said.

One problem is that real estate agents, who work for a broker, are considered statutory independent contractors by the Internal Revenue Service, according to Ray Froy, a local CPA. There is some question among municipalities about whether these contractors should be taxed.

An independent contractor, also known as a statutory employee, is treated as an employee by law for certain employment tax withholdings, according to the Society for Human Resource Management. In certain professions designated by the IRS, a person still operates as an independent contractor under common law rules, but certain taxes must be withheld; this creates the middle-ground relationship of statutory employee.

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