West Virginia City B&O Tax: How Municipal Business and Occupation Tax Works, Classes and Caps

If you open a shop, take on contracting work or sell services in West Virginia, you will run into the term B&O tax and may assume it is a state tax. For most businesses it is not. The state business and occupation tax applies only to public service and utility businesses. The gross receipts tax that reaches retailers, contractors and service firms is levied by cities, and it comes with a city business license and a weekly per-worker city service fee. Owners who search for west virginia b&o tax usually want three answers: what the city charges, how the number is calculated, and what limits apply.

This guide covers how the city tax works, how cities set classes and rates, the statutory caps, how returns are filed, and where the figures you find online may be out of date. This is informational content, not legal or tax advice. Confirm your obligations with your city's Finance office and with a qualified CPA or attorney, especially if you work in more than one city.

Who Levies the Tax

Under W. Va. Code 8-13-5, the gross receipts tax on ordinary businesses is a municipal tax. The state B&O tax reaches only public service and utility businesses. A retailer in Charleston or a plumbing contractor in Fairmont therefore deals with a city rate, not a state rate.

West Virginia has 55 counties and 230 incorporated places, including towns, cities and villages. Cities set their own rates and their own forms, so two businesses one mile apart across a city line can owe different amounts for the same sale. The first step is confirming what your city charges for your activity, in writing, from the city Finance office.

What Cities Can Tax

City authority is narrow. Under the statute, a city may tax only the activities the state taxed before July 1, 1987, and it may set rates no higher than the 1959 state rates. Those limits are why city schedules look different from one city to the next: each city builds its own schedule inside the same outer boundary.

In practice, you will see the tax applied to retail sales, to services and to contracting work. If your activity does not fit one of the classes your city publishes, ask the Finance office how it is treated before you assume it is exempt or taxable.

Rate Classes

Cities group businesses into classes, usually retail, service and contracting, and each class carries its own rate per $100 of gross receipts. The rates below come from city documents in our research. They are a snapshot, not a current schedule.

City	Class	Rate per $100	Source in our research
Charleston	Retail	0.50	2022 FAQ
Huntington	Retail	0.25	2021 form (see note)
Wheeling	Retail	0.365	April 2015 schedule
Wheeling	Service	0.88	April 2015 schedule
Martinsburg	Retail	0.45	2025 city page
Fairmont	Retail	0.35	Undated city document
Fairmont	Service	0.70	Undated city document

Three things to keep in mind about this table. First, the dates vary, and a 2015 schedule may no longer be the rate. Rates change by city ordinance, so treat every row as a starting point to verify. Second, our plan notes also record that Huntington has waived its retail B&O since 2021, which conflicts with the 2021 form above. Do not rely on either figure for Huntington until the Huntington Finance office confirms which one applies. Third, the Wheeling service rate is higher than its retail rate, which is common, but the spread between classes is a reason to confirm the class your work falls into before you file.

Contracting Rates and the Caps

Contracting carries a figure of 2.00 per $100 in our research. That number is above the 1% cap described below, and both cannot apply to the same gross receipts as written. We have not confirmed how the cap and the contracting rate interact, so treat the 2.00 figure as unconfirmed. Ask the city which schedule governs your contracting work and how the cap applies to it.

The two statutory caps work as outer limits. Under W. Va. Code 8-13-2k, the tax on gross income is capped at 1%. Under W. Va. Code 8-13-2m, the tax on proceeds is capped at 0.3%. Which cap governs a given business depends on how the statute categorizes its receipts, so the question is not answered by the rate alone. When a city rate looks high for your activity, check the cap first and then ask the Finance office which category it has placed you in.

Recent Changes and Exemptions

Two items often come up in owner questions, and both need a direct answer from the city:

• New-car B&O: The B&O tax on new car sales was eliminated effective July 1, 2025. Dealers should confirm how their city has updated its schedule and its filings.
• The $2,500 exemption: Some sources describe a $2,500 B&O exemption for 2025. That exemption does not appear in the current text of W. Va. Code 8-13-5 as we reviewed it, so do not assume it applies to you. Ask your city Finance office whether any small-business exemption is in effect and how to claim it.

Filing and Paying

City B&O returns are filed quarterly. Each city administers its own return, so the form, the payment method and the due dates come from the city, not from the state. Set up a quarterly calendar on day one and keep gross receipts sorted by class so you can complete each return without rebuilding the numbers.

House Bill 4418, in effect June 11, 2026, directs the state to create an optional e-filing system for city B&O returns. The system carries a 1% fee and becomes available only after participating cities exceed $30 million in B&O revenue. Our research does not show the system as live for any city, so ask your Finance office whether it accepts returns through the state system before you change how you file.

Licenses on Top of the Tax

West Virginia has no general statewide business license. Several separate items apply to most new businesses, and each one is a different agency or filing:

• City business license and city service fee: Your city issues its business license and collects the weekly per-worker city service fee. Confirm both amounts with the city before you open.
• Business Registration Certificate: The State Tax Division issues this certificate for $30. It is a one-time fee, the certificate is permanent until the business name, location or ownership changes, and each fixed business location needs its own certificate. You can apply on Form WV/BUS-APP or online at business4.wv.gov. Registering an LLC or corporation with the Secretary of State is a filing, not a license, and does not replace this certificate.
• Trade licenses: The Contractor Licensing Board requires a license for residential work above $5,000 and commercial work above $25,000. The State Fire Marshal licenses electricians. The Division of Labor licenses plumbers and HVAC technicians. The Alcohol Beverage Control Administration (ABCA) governs alcohol sales. The West Virginia Department of Agriculture (WVDA) covers cottage food, hemp, kratom and pesticides.

Occupational, professional and municipal licenses may apply on top of the Business Registration Certificate, so review the list above against your specific activity rather than treating it as complete.

Sales Tax Is a Separate Question

Do not confuse B&O with sales tax. The state sales tax rate is 6%. In 101 municipalities, a 1% city sales tax is added to the state rate, rising to 107 municipalities from January 1, 2027. A shop in one of those cities may collect sales tax on each sale and also pay the city B&O tax on its gross receipts. These are two different taxes with two different returns.

Practical Checklist

1. Confirm in writing that your city taxes your activity and which class it falls into.
2. Get the current rate schedule from the city Finance office, and note its date.
3. Ask which statutory cap applies to your receipts, and resolve the contracting question if you do contracting work.
4. Register with the State Tax Division and pay the $30 Business Registration Certificate fee for each location.
5. Obtain the city business license and confirm the weekly per-worker city service fee.
6. Ask about the 2025 $2,500 exemption and whether the state e-filing system is open to your city.
7. Set a quarterly filing calendar and keep gross receipts by class.

Official Resources

• West Virginia State Tax Division: https://tax.wv.gov/
• Online business registration (WV One Stop Business Portal): https://business4.wv.gov/
• West Virginia Secretary of State, Business Division: https://sos.wv.gov/business
• West Virginia Small Business Development Center: https://wvsbdc.com/

Your city Finance office is the authority for its own rates, classes, forms and due dates. Start there for any figure in this guide that you plan to rely on.

Disclaimer and When to Get Help

This article is informational content about West Virginia city B&O taxes. It is not legal or tax advice, and it does not create an attorney-client or accountant-client relationship. City rates and rules change, and some points here are unconfirmed. Before you set prices, sign a lease or file a return, confirm the current rules with the city and talk with a qualified CPA or attorney. Get that help sooner if you operate in more than one city, do contracting work, sell both goods and services, or are unsure which cap or class applies to your business.