FISCAL NOTE
FUND(S):
General Revenue Fund & State and Unauthorized Substances Tax Account
Sources of Revenue:
General Fund,Other Fund
Legislation creates:
A New Program,A New Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to impose excise taxes on certain unauthorized substances, including cocaine, certain low-street-value drugs, marijuana, certain controlled substances, illicit alcoholic liquor, certain beer, certain wine and mash.
Based upon a similar law in North Carolina, we estimate that this new tax could generate about $1.9 million per year. The provisions of this bill would impose volume-based excise taxes at various rates upon dealers of a variety of illegal substances. Tax payment stamps would be issued to the taxpayer as verification that tax was paid. As written, this bill would allocate 75 percent of proceeds to the State or local law-enforcement agencies that contribute to collection of this tax. The remainder shall be deposited into the State’s General Revenue Fund.
Additional administrative costs to the State Tax Department would be roughly $350,000 per year. Since this tax would be involuntary, administration would be manually intensive. Therefore, most of the costs associated with the passage of this bill would be related to personnel expenses.
Fiscal Note Detail
Effect of Proposal |
Fiscal Year |
2008 Increase/Decrease (use"-") |
2009 Increase/Decrease (use"-") |
Fiscal Year (Upon Full Implementation) |
1. Estmated Total Cost |
0 |
0 |
347,024 |
Personal Services |
0 |
0 |
97,179 |
Current Expenses |
0 |
0 |
114,100 |
Repairs and Alterations |
0 |
0 |
0 |
Assets |
0 |
0 |
39,345 |
Other |
0 |
0 |
96,400 |
2. Estimated Total Revenues |
0 |
0 |
1,900,000 |
Explanation of above estimates (including long-range effect):
Based upon a similar law in North Carolina, we estimate that this new tax could generate about $1.9 million per year. The provisions of this bill would impose volume-based excise taxes at various rates upon dealers of a variety of illegal substances. Tax payment stamps would be issued to the taxpayer as verification that tax was paid. As written, this bill would allocate 75 percent of proceeds to the State or local law-enforcement agencies that contribute to collection of this tax. The remainder shall be deposited into the State’s General Revenue Fund.
Additional administrative costs to the State Tax Department would be roughly $350,000 per year. Since this tax would be involuntary, administration would be manually intensive. Therefore, most of the costs associated with the passage of this bill would be related to personnel expenses.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us