FISCAL NOTE
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
A New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to create the West Virginia Tourism Development Act. The bill provides for an inducement for the construction of tourism development projects and expansion of existing tourism attractions in West Virginia, by providing for a new tourism development project tax credit to be applied against sales taxes collected on the gross receipts generated directly from the operations of the new or expanded tourism development project.
As written, we are unable to accurately estimate the revenue loss to the General Revenue Fund from the passage of this bill. The bill seeks to enact inducements for “eligible” companies to create new and expanded tourism projects. The “eligible” companies must be approved by the Development Office and are allowed a credit against sales tax imposed “on the sales generated by or arising from the operations of the tourism development project”.
The amount of revenue loss associated with this bill would depend on the type and number of such development projects approved. Also, the bill states that the approved company may claim the credit by reducing the amount of consumers sales and service tax required to be remitted monthly by the amount of its “aggregate” annual credit allowance. According to our interpretation, this credit is not taken against any tax liability of the company, but against sales tax collected by the approved company and paid by tourists when visiting the new or expanded attraction. Overall, the refund would be limited to 25 percent of the approved costs of the project.
Additional administrative costs to the Tax Department would be minimal during the current fiscal year due to notifying taxpayers of these changes.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2004
Increase/Decrease
(use"-") |
2005
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
4,000 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
4,000 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
As written, we are unable to accurately estimate the revenue loss to the General Revenue Fund from the passage of this bill. The bill seeks to enact inducements for “eligible” companies to create new and expanded tourism projects. The “eligible” companies must be approved by the Development Office and are allowed a credit against sales tax imposed “on the sales generated by or arising from the operations of the tourism development project”.
The amount of revenue loss associated with this bill would depend on the type and number of such development projects approved. Also, the bill states that the approved company may claim the credit by reducing the amount of consumers sales and service tax required to be remitted monthly by the amount of its “aggregate” annual credit allowance. According to our interpretation, this credit is not taken against any tax liability of the company, but against sales tax collected by the approved company and paid by tourists when visiting the new or expanded attraction. Overall, the refund would be limited to 25 percent of the approved costs of the project.
Additional administrative costs to the Tax Department would be $4,000 during the current fiscal year due to notifying taxpayers of these changes.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us