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 provide a refundable exemption for purchases by a contractor when the purchased materials will be used or consumed in the construction, alteration, repair or improvement of a new or existing building or structure to be used primarily by persons or entities exempt from the sales tax on purchases.
Passage of this bill would result in a roughly $2.6 million annual loss to the General Revenue Fund.
Additional administrative costs to the State Tax Department associated with this bill would be minimal.
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 |
-2,600,000 |
-2,600,000 |
Explanation of above estimates (including long-range effect):
Passage of this bill would result in a roughly $2.6 million annual loss to the General Revenue Fund.
Passage of this bill creates a refundable exemption for purchases by a contractor when the purchased materials meet certain criteria. Currently, the code exempts purchases by contractors performing maintenance and repair for the mining industry and will exempt similar purchases by manufacturing industry contractors beginning July 1, 2007. The current legislation proposes to add transportation and utilities contractor purchases to the currently exempt industries. All exemptions would be effective for purchases on or after July 1, 2007.
Additional administrative costs to the State Tax Department associated with this bill would be due to printing and promotional expenses.
Memorandum
The stated purpose of this bill is to provide a refundable exemption for purchases by a contractor when the purchased materials will be used or consumed in the construction, alteration, repair or improvement of a new or existing building or structure to be used primarily by persons or entities exempt from the sales tax on purchases.
Taxpayers eligible for the refundable exemption provided for in section §11-15-9(b)(2) include taxpayers engaged in “the activities of manufacturing, transportation, transmission, communication, production of natural resources, gas storage, generation or production or selling electric power, provision of public utility service or the operation of a utility service or the operation of a utility business”.
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us