Date Requested:February 17, 2005
Time Requested:02:08 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R392 Intro HB2460
CBD Subject: Funerals Exempted
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 exempt funeral services, supplies and equipment from the consumer sales tax.
    
    Since the bill does not provide definitions for “funeral services”, “supplies” or “equipment”, the exemption could be subject to a very broad interpretation that would extend the exemption to sales by a funeral home to its customers, sales to funeral homes and sales of flowers, food and other items related to funeral services. According to our interpretation of this bill and based upon available data, it is estimated that passage of this bill would result in a reduction in the State General Revenue Fund of approximately $3.0 million in Fiscal Year 2006 and thereafter for sales by a funeral home to its customers. The Tax Department does not have access to the data necessary to estimate the potential revenue reduction to the State General Revenue Fund associated with sales to funeral homes and sales of flowers, food and other items related to funeral services.
    
    Additional administrative costs to the Tax Department associated with passage of this bill would be minimal.
    

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 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 -3,000,000 -3,000,000
3. Explanation of above estimates (including long-range effect):
    The bill would exempt funeral services, supplies and equipment from the Consumers Sales and Service Tax.
    
    According to our interpretation of this bill and based upon available data, it is estimated that passage of this bill would result in a reduction in the State General Revenue Fund of approximately $3.0 million in Fiscal Year 2006 and thereafter for sales by a funeral home to its customers. The Tax Department does not have access to the data necessary to estimate the potential revenue reduction to the State General Revenue Fund associated with sales to funeral homes and sales of flowers, food and other items related to funeral services.
    
    Passage of this bill would result in a minimal increase in cost for the Tax Department. The additional cost would be for printing and mailing materials to inform taxpayers of the law change.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to exempt funeral services, supplies and equipment from the consumer sales tax.
    
    As written, the bill does not provide definitions for “funeral services”, “supplies” or “equipment”. Thus, the exemption could be subject to a very broad interpretation that would extend the exemption to sales by a funeral home to its customers, sales to funeral homes and sales of flowers, food and other items related to funeral services.