CHARLESTON, W.Va. -- People who shop in Charleston will have to dig a little bit deeper starting Tuesday, when merchants begin collecting the city's half-cent per dollar sales tax.
That's pretty small change for most people, but those pennies -- or half pennies -- add up. City leaders hope to collect more than $6 million a year, enough to pay for up to $50 million of improvements at the aging Civic Center.
City and state tax officials have been working behind the scenes for months to make sure the transition goes as smoothly as possible.
"Generally speaking, retailers don't have a problem transitioning from one sales tax to another because they already have systems in place," said Tonja Oakes, director of the state Tax Account Administration Division.
The state Tax Department already has systems in place, too. They've been running the state sales tax program for years, and have worked with local sales taxes programs for several communities.
Huntington started charging a 1 percent sales tax in January 2012. Like Charleston, Huntington levied its tax under the state's pilot home rule program, which gives a handful of cities more control over their finances and operations. Wheeling is also slated to join the party on Tuesday with a half-cent tax.
Some smaller towns are also climbing on the local sales tax bandwagon, through another quirk in state tax law that allows non-home-rule cities or towns to charge a sales tax if they don't have (or eliminate) business and occupation taxes on retailing.
Williamstown pioneered its sales tax two years ago, Rupert joined in this April, and Quinwood and Harrisville are scheduled to start on Tuesday.
To help prepare for the tax, Charleston officials first needed to compile a list of the hundreds of nine-digit ZIP codes in the city, so mail-order retailers would know who lives in Charleston. The sent the list to state tax officials, along with a copy of the city's May 20 ordinance that enacted the sales tax, on May 31.
"Once a town or city provides us with an ordinance, the Tax Department upgrades our tax system to include their city or town, and their tax rate," Oakes said. "We will provide 120-day notice to the sellers to let them know [the tax] will be coming."
That notice went to every retailer that has an account with the state, around 130,000 businesses. The Tax Department also put information on its website and otherwise alerted merchants, she said.
When Mayor Danny Jones and city officials first started pitching the sales tax to City Council members, they said a few items would be exempt, like vehicles and groceries. But upon further review by lawyers, the exemptions grew.
"The truth is our code has to mirror state code," city Finance Director Joe Estep said. "It's a pretty big list: nonprofits; satellite TV sales; automobile, but they collect their own tax.
"I started getting nervous after I provided the [annual revenue] estimate when I saw the list," Estep said.
Though the rules for when and where local sales taxes are charged are a bit complicated, merchants should know the ropes.
"West Virginia is a destination-sourcing state, which means the tax is imposed at the destination rather than the purchase," Oakes said.
"An easy example, the one I like to use, is pizza delivery," she said. "If they're located outside the city but deliver inside the city, they have to collect the tax. If you pick up at the location, you don't have to pay the tax."
For catalog and other merchants who mail goods to city residents from outside Charleston, anyone who already collects the state sales tax would also collect the city tax, Oakes said.
Estep is sticking with his original projection for how much the tax will bring in -- $6.175 million in gross tax collections each year.