FISCAL NOTE
FUND(S):
General Revenue Fund
Sources of Revenue:
General 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 amend the code in order to neutralize the holding in Syncor International Corporation v. Palmer, 208 W. Va. 658 (2001). That case held, contrary to long standing administrative policy embodied in legislative rule 110 C.S.R. 15, ยง92, that radiopharmaceuticals purchased by medical service providers are exempt from sales tax when they are purchased for use and consumption in providing a professional service and are specially formulated by the pharmaceutical company for a specific, identified patient. The reasoning of the court might be used, however, and extended in a different case to exempt all purchases of drugs, durable medical goods, mobility enhancing equipment, prosthetic devices and insulin for use in providing a professional or personal service. This bill would codify long standing administrative policy embodied in legislative rule that was modified by the Syncor decision. It would reverse the loss of revenue resulting from that decision and would avoid future revenue loss should a court apply the Syncor reasoning to other purchases by health care providers for use in providing professional and personal services.
Passage of this bill would likely result in some increase in General Revenue associated with the imposition of tax on certain purchases by medical service providers. However, the level of revenue change cannot be readily determined.
The State Tax Department would incur administrative costs of roughly $4,000 for printing and promotion.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2007
Increase/Decrease
(use"-") |
2008
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):
This bill would codify an administrative policy embodied in legislative rule that was modified by the Syncor International Corporation v. Palmer, 208 W. Va. 658 (2001) decision. Passage of this bill would likely result in some increase in General Revenue associated with the imposition of tax on certain purchases by medical service providers. However, the level of revenue change cannot be readily determined.
The State Tax Department would incur administrative costs of roughly $4,000 for printing and promotion.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us