Key figures
West Virginia payables
2026, with sources
Contractors are new hires too
West Virginia’s new-hire law reaches independent contractors. An employer doing business in the state reports any contract for services in West Virginia with an independent contractor once payments reach $2,500 in a year, or once it signs a contract for that much, within 14 days. Rehires and returns to work, of employees or contractors, are reported too.
An example: a startup hires a West Virginia-based designer on a $4,000 contract in May. It reports the contract to the Bureau for Child Support Enforcement within 14 days of signing, because the contract is for more than $2,500, even if the first invoice hasn’t been paid yet.
Use tax on purchases
West Virginia’s consumers sales and service tax reaches more than goods. “Service” is defined broadly as nonprofessional activities performed for others for consideration, and prewritten computer software is treated as tangible personal property. Electronic data processing services, meaning processing another’s data or providing access to computer equipment to process or examine data, and related software are exempt.
When an out-of-state vendor doesn’t charge West Virginia tax on something taxable, the buyer owes 6% use tax, plus any municipal use tax. Accounts payable needs a step that classifies software and service invoices.
The federal baseline
This page covers what West Virginia adds. The federal rules underneath it apply here too.
Common questions
Do we report contractors in West Virginia?
Yes, once you contract to pay a contractor $2,500 or more in a year, or have paid that much. West Virginia requires employers to report independent contractors performing services in the state, within 14 days of the earlier of the payments reaching $2,500 or signing a contract for that amount.
Do we owe use tax on the software and services we buy?
Possibly. West Virginia’s sales tax applies to services generally unless an exemption applies, and to prewritten software. Electronic data processing services and related software are exempt. If an out-of-state vendor sells you something taxable without charging West Virginia tax, you owe 6% use tax.
Payables next door
- KYKentucky payablesKentucky asks for 1099s only when Kentucky tax was withheld; on the payables side, the issue is a flat 6% use tax that reaches SaaS subscriptions bought from vendors that do not collect.
- MDMaryland payablesMaryland wants 1099s only when Maryland tax was withheld, classifies workers for unemployment with the ABC test, and since July 2025 taxes the software and IT services a company buys.
- OHOhio payablesOhio taxes the business software you buy, so untaxed SaaS invoices carry use tax; 1099s go to Ohio only when they report Ohio withholding.
- PAPennsylvania payablesPennsylvania wants 1099s by January 31 and 3.07% withheld from Pennsylvania-source payments of $5,000 or more to nonresident contractors. Because SaaS is taxable, use tax on software is a real payables item.
- VAVirginia payablesVirginia presumes workers are employees, requires new independent contractors to be reported within 20 days, and wants 1099s only when Virginia tax was withheld. SaaS purchases carry no use tax.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
More of the West Virginia guide
- AccountingAccounting and state tax in West VirginiaCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in West VirginiaSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayrollPayroll taxes and employer rules in West VirginiaWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in West VirginiaRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in West VirginiaCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
- W. Va. Code § 48-18-125 — Employment and income reporting
- W. Va. Code § 11-15-3 — Consumers sales and service tax rate
- W. Va. Code § 11-15-2 — Definitions (“service”, custom software)
- W. Va. Code § 11-15-9 — Exemptions (electronic data processing services)
- W. Va. Code § 36-8-7 — Report of abandoned property
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.