Date Requested:February 16, 2005
Time Requested:01:57 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R697 Intro HB2210
CBD Subject: Churches Exempt from Special Taxes
FUND(S)
State Road Fund
Sources of Revenue
Other Fund State Road Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The stated purpose of this bill is to exempt sales of propane gas for any church, religious sect, society or denomination consumption use from the imposition of the Motor Fuels Excise Tax.
    
    As written, we are unable to accurately estimate the loss to the State Road Fund from passage of this bill. However, the loss could be significant. This bill would provide a refundable exemption from the flat rate (i.e., 20.5 cents per gallon) portion of the Motor Fuel Excise Tax for purchases of gasoline and propane gas by churches and other religious sects. The bill is very broad in scope. It does not provide guidance as to the use of the propane or gasoline (e.g., heating or other off-road use) nor does it specifically define church or religious denomination or sect.
    
    Currently, all sales of propane gas are per se exempt from the flat rate portion of the Motor Fuel Excise Tax under §11-14C-9(a)(4), and no Excise Tax is paid on those gallons. Also, under §11-14C-9(c)(9), tax paid on gallons of gasoline and special fuel are allowed a refundable exemption from the flat rate for certain off-highway uses (e.g., heating any public or private dwelling, building or other premises).
    
    There would be no additional administrative costs to the Tax Department.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2005
Increase/Decrease
(use"-")
2006
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    As written, we are unable to accurately estimate the loss to the State Road Fund from passage of this bill. However, the loss could be significant. This bill would provide a refundable exemption from the flat rate (i.e., 20.5 cents per gallon) portion of the Motor Fuel Excise Tax for purchases of gasoline and propane gas by churches and other religious sects. The bill is very broad in scope. It does not provide guidance as to the use of the propane or gasoline (e.g., heating or other off-road use) nor does it specifically define church or religious denomination or sect.
    
    Currently, all sales of propane gas are per se exempt from the flat rate portion of the Motor Fuel Excise Tax under §11-14C-9(a)(4), and no Excise Tax is paid on those gallons. Also, under §11-14C-9(c)(9), tax paid on gallons of gasoline and special fuel are allowed a refundable exemption from the flat rate for certain off-highway uses (e.g., heating any public or private dwelling, building or other premises).
    
    There would be no additional administrative costs to the Tax Department.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    This bill, as written, provides a refundable exemption from the flat rate portion of the Motor Fuel Excise Tax for gasoline and propane gas for any church, religious sect or denomination consumption use. The bill does not clarify that the exemption applies to sales or that the church or religious organization must make the purchase for the exemption to apply. It is also unclear as to what qualifies as “use or benefit as consumption use.”
    
    There is no specific definition of church or religious sect or denomination. Therefore, the bill is very broad in scope.