FISCAL NOTE
FUND(S):
General Revenue Fund, county governments
Sources of Revenue:
General Fund,Other Fund county governments
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 limit each county commission imposing a mortgage recording tax of not more than one dollar per thousand dollars.
According to our interpretation, passage of this bill would reduce General Revenue Fund collections by up to $13.0 million per year beginning in FY 2008. Additionally, county government would lose up to $7.0 million in tax collections with another $5.9 million being redistributed for alternative use which may be required to comply with the Uniform Electronic Transaction Act, §39A-1-1 et. seq.
There would be no additional administrative costs to the State Tax Department associated with passage of this bill.
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 |
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 |
-13,000,000 |
-13,000,000 |
Explanation of above estimates (including long-range effect):
The stated purpose of this bill is to limit each county commission imposing a mortgage recording tax of not more than one dollar per thousand dollars.
According to our interpretation, passage of this bill would reduce General Revenue Fund collections by up to $13.0 million per year beginning in FY 2008. Additionally, county government would lose up to $7.0 million in tax collections with another $5.9 million being redistributed for alternative use which may be required to comply with the Uniform Electronic Transaction Act, §39A-1-1 et. seq.
There would be no additional administrative costs to the State Tax Department associated with passage of this bill.
Memorandum
The stated purpose of this bill is to limit each county commission imposing a mortgage recording tax of not more than one dollar per thousand dollars.
The purposed bill removes “mortgages or deeds of trust given as security for a debt” from the statutory definition of document in W. Va. Code §11-22-1(4). This removes such items from Code §11-22-2, which imposes a tax on any document presented for recording. The purposed bill inserts language in W. Va. Code §11-22-2 specifically excepting mortgages and deeds of trust from the state excise tax. Because the county excise tax in the second paragraph of current §11-22-2 is imposed on “such documents as defined in section one,” this effectively removes the county tax on real estate transfers as well because mortgages and deeds of trust are no longer defined as documents in section one. The bill then adds a new paragraph at the end of Code §11-22-2, re-imposing a separate state excise tax on “any mortgage or deed of trust given as a security for a debt,” at the rate of fifty cents per five hundred dollars value, without re-imposing a comparable county tax.
The overall effect of this is to remove the country tax on real estate transfers altogether and to reduce the state tax from its current rate of one dollar and ten cents per five hundred dollars’ value to a rate of fifty cents per five hundred dollars’ value.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us