Date Requested:March 25, 2005
Time Requested:12:17 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2005R2001 Intro HB3301
CBD Subject: Timber Severance Tax Rebate
FUND(S)
Forestry Tax Fund
Sources of Revenue
Other Fund Forestry Tax 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 provide for a two percent rebate to the tax-payer of the timber severance tax.
    
    According to our interpretation and based upon available data, passage of this bill would result in a net loss to the Forestry Tax Fund of less than $100,000 annually.
    
    Additional administrative costs to the State Tax Department associated with 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 -100,000 -100,000
3. Explanation of above estimates (including long-range effect):
    According to our interpretation and based upon available data, passage of this bill would result in a net loss to the Forestry Tax Fund of less than $100,000 annually.
    
    Additional administrative costs to the State Tax Department associated with this bill would be due to the printing and promotional expense of notifying taxpayers.


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The bill says the taxpayer shall receive the 2 percent “rebate of the total amount due upon payment of same”. The bill does not define “rebate”. Black’s Law Dictionary defines “rebate” as “discount” and “tax rebate” as “an amount returned (i.e., refunded) to the taxpayer after he has made full payment of the tax.”
    
    Issuing a 2 percent refund would be an inefficient way to collect 98 percent tax liability. The “rebate” is to be received by the taxpayer “upon payment” of tax due. The only way this would be possible is if the rebate is received as a discount rather than as a refund. In short, administratively, the rebate should be built into the tax return so that it is unnecessary to issue a refund.