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 gradually repeal the business franchise tax.
Passage of this bill would result in a decline in the General Revenue Fund as shown in the table below. Although the tax is abolished for tax years beginning on or after July 1, 2013, current collection patterns indicate some residual collections would occur up to three years later.
FY2009 ($33.0 million)
FY2010 ($50.0 million)
FY2011 ($70.0 million)
FY2012 ($92.0 million)
FY2013 ($115.0 million)
FY2014-16 ($120.0+ million)
Additional administrative costs to the State Tax Department associated with this bill would be roughly $37,500 in the next fiscal year and about $26,500 each fiscal year thereafter due to notifying taxpayers of the changes and programming costs.
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 |
0 |
37,475 |
26,475 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
26,475 |
26,475 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
11,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
-115,000,000 |
Explanation of above estimates (including long-range effect):
Passage of this bill would result in a decline in the General Revenue Fund as shown in the table below. Although the tax is abolished for tax years beginning on or after July 1, 2013, current collection patterns indicate some residual collections would occur up to three years later.
FY2009 ($33.0 million)
FY2010 ($50.0 million)
FY2011 ($70.0 million)
FY2012 ($92.0 million)
FY2013 ($115.0 million)
FY2014-16 ($120.0+ million)
Additional administrative costs to the State Tax Department associated with this bill would be $37,500 in the next fiscal year and $26,500 each fiscal year thereafter due to notifying taxpayers of the changes and programming costs.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us