(a) Rate and Measure of Tax. Upon every person engaging or continuing within the City in the business of contracting, the tax shall be equal to two dollars ($2.00) per one hundred dollars ($100.00) of the gross income of the business.
(b) Discount for Prepayment of Tax on Large Construction Projects. When the contract for a specific construction project is fifty million dollars or more, the contractor may elect to prepay the tax due under this section with respect to the contract in one lump sum to the City Treasurer. When the prepayment is made to the Treasurer within thirty days after the earlier of receiving the building permit from the City, or the start of construction, the contractor is entitled to a discount equal to the sum of the Wall Street Journal prime rate for the date of prepayment plus two points times the gross contract price: Provided, That the rate of the discount may never exceed eight percent, and the taking of the discount is subject to the following rules:
(1) Monthly estimates of tax. During the period of the construction contract, the contractor shall not be required to file monthly estimates of business and occupation tax liability with the City Treasurer unless (A) the contractor has gross income from other contracting activity or from other business activity within the City, or (B) the contractor's gross income from the contract exceeds the gross income amount used to compute the prepayment discount. The contractor shall remit with the return the amount of tax shown thereon to be due the City on gross income not included in the prepayment discount computation.
(2) Annual return. A contractor not required to file monthly tax returns shall file annual business and occupation tax returns during the pendency of the construction contract, reporting gross income received from the contract during the year for which the return is filed and the amount of tax due on such amount. The contractor may claim credit against this tax liability for the amount of tax prepaid plus the amount of the discount. Unused credit may be carried forward until used or a final return is filed for the construction project, whichever is the first to occur.
(3) Final contract return. A final tax return for that contract shall be filed with the Treasurer within thirty days after the contract is completed. With this final return, the contractor shall attach a schedule showing:
A. The total gross income received or receivable by the contractor from the contract;
B. The contract gross income amount used to compute the prepayment discount allowable under this subsection;
C. The amount of the prepayment discount;
D. The amount of tax due under this section on the amount reported under clause A.;
E. The amount of tax remitted in monthly installments on gross income received or receivable under the contract in excess of the gross income amount reported in clause B.; and
F. The amount of tax due, if any, with the final return for the contract.
(4) Refund of overpaid tax. When the total amount of tax prepaid on the contract, plus the amount of early payment discount allowed under subsection (b) of this section, plus the amount of additional tax paid on the contract exceeds the amount of tax otherwise due under this section on the gross income received or receivable by the contractor from the contract, the contractor shall be entitled to a refund of the excess amount of tax paid.
(5) Recapture of discount. When the gross income received or receivable by the contractor under the contract is less than fifty million dollars, the contractor shall forfeit the discount previously claimed for prepayment of the tax due on the contract. The interest and penalty provisions of Section 737.29 of Article 737 of the Code of the City of South Charleston shall apply to the amount of tax due because of the forfeiture, which shall be computed based on when the tax would have been paid had there been no prepayment discount.
(6) Termination. The provisions of subsection (b) of this section shall terminate on the first day of July, 2012, unless sooner terminated by City Council or subsection (b) of this section is extended or made permanent before such date. However, the termination of subsection (b) of this section shall not apply to a contractor who before the termination date claimed a prepayment discount on a construction contract that is completed on or after the termination date of subsection (b) of this section, who shall retain that entitlement and shall remain subject to subsection (b) of this section as if it had not terminated. (Ord. 2109. Passed 7-17-08.)