FISCAL NOTE
FUND(S):
General Revenue Fund and State Road Fund
Sources of Revenue:
General Fund,Other Fund State Road 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 return to the Division of Highways the sales tax collected on materials purchased by highway contractors for use in highway construction and maintenance projects.
As written, the passage of this bill would provide a refundable sales tax exemption on purchases of construction and maintenance materials by contractors for use on highway projects. The tax paid shall be refunded to the Division of Highways through a reimbursement from the General Revenue Fund to the State Road Fund of an amount based upon 40 percent of total expenditures by the Division for highway construction projects in a fiscal year. As a result, approximately $13.5 million would be transferred from the General Revenue Fund to the State Road Fund annually.
There would be no additional administrative costs to the State Tax Department from the 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 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The stated purpose of this bill is to return to the Division of Highways the sales tax collected on materials purchased by highway contractors for use in highway construction and maintenance projects.
As written, the passage of this bill would provide a refundable sales tax exemption on purchases of construction and maintenance materials by contractors for use on highway projects. The tax paid shall be refunded to the Division of Highways through a reimbursement from the General Revenue Fund to the State Road Fund of an amount based upon 40 percent of total expenditures by the Division for highway construction projects in a fiscal year. As a result, approximately $13.5 million would be transferred from the General Revenue Fund to the State Road Fund annually.
There would be no additional administrative costs to the State Tax Department from the passage of this bill.
Memorandum
The stated purpose of this bill is to return to the Division of Highways the sales tax collected on materials purchased by highway contractors for use in highway construction and maintenance projects.
The bill does not define the phrases “construction”, “maintenance”, “construction or maintenance materials”, “highway project”, and “highway construction and maintenance”. Further, the bill does not provide specific guidance on the form and content of the itemized list the commissioner of highways is to provide to the tax department, nor any provision for the promulgation of legislative rules to provide such guidance. Also, it is unclear when and how the payment of the “reimbursement” is to be made.
In lieu of the refundable exemption provided through a “reimbursement”, the purpose of this bill might be better accomplished through an appropriation of revenue from the General Revenue Fund to the State Road Fund.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us