Date Requested:February 01, 2008
Time Requested:05:23 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2008R1836 Introduced SB552
CBD Subject: ELIMINATE 911 FEE REPLACE WITH SALES TAX ON WIRELESS SALES
FUND(S)
General Revenue Fund, Wireless Enhanced 911 Fee Fund
Sources of Revenue
General Fund,Other Fund see above
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 an alternative means of equitably collecting and remitting telecommunications taxes, fees and charges applicable to prepaid wireless calling arrangements.
    
    As written, this bill would remove prepaid wireless calling service from the $3.00 per month per subscriber wireless enhanced 911 fee imposed by W. Va. Code §24-6-6b and subject the sale of prepaid wireless service to the 6 percent Consumers Sales and Service Tax imposed by W. Va. Code §11-15 et al. The bill also provides that the State Tax Commissioner is to remit monthly to the Public Service Commission the proceeds of the 6 percent tax on prepaid wireless services. The amount of tax proceeds to be remitted to the Public Service Commission in the first year is to be determined as an amount equal to one-twelfth of the wireless enhanced 911 fees collected from prepaid wireless calling services during the July 1, 2007 to June 30, 2008 period. In subsequent years, the amount to be remitted will be adjusted by an amount proportionate to the increase or decrease in the enhanced wireless 911 fee paid to the Public Service Commission during the previous twelve months.
    
    Since current reporting of the wireless enhanced 911 fee does not segregate the amount attributable to prepaid services, we are unable to accurately estimate the potential revenue impact of this proposal. To the extent that some prepaid wireless providers (e.g., calling card sellers) may not have been paying the wireless enhanced 911 fee, the imposition of Consumers Sales and Service Tax will effectively broaden the 911 fee base. However, with various wireless packages now available for less than $50 per month, the imposition of the sales tax at 6 percent may actually yield less revenue than the $3.00 per month wireless enhanced 911 fee. In such cases, there would be a loss to the General Revenue Fund.
    
    Additional administrative costs to the State Tax Department associated this bill would be minimal. The Public Service Commission may incur additional administrative costs due to passage of this bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2008
Increase/Decrease
(use"-")
2009
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
3. Explanation of above estimates (including long-range effect):
    Passage of this bill would remove prepaid wireless calling service from the $3.00 per month per subscriber wireless enhanced 911 fee imposed by W. Va. Code §24-6-6b and subject the sale of prepaid wireless service to the 6 percent Consumers Sales and Service Tax imposed by W. Va. Code §11-15 et al. The bill also provides that the State Tax Commissioner is to remit monthly to the Public Service Commission the proceeds of the 6 percent tax on prepaid wireless services. The amount of tax proceeds to be remitted to the Public Service Commission in the first year is to be determined as an amount equal to one-twelfth of the wireless enhanced 911 fees collected from prepaid wireless calling services during the July 1, 2007 to June 30, 2008 period. In subsequent years, the amount to be remitted will be adjusted by an amount proportionate to the increase or decrease in the enhanced wireless 911 fee paid to the Public Service Commission during the previous twelve months.
    
    The wireless enhanced 911 fee yielded roughly $26.7 million in FY2007. However, current reporting of the wireless enhanced 911 fee does not segregate the amount attributable to prepaid services or postpaid services. Thus, we are unable to accurately estimate the potential revenue impact of this proposal. To the extent that some prepaid wireless providers (e.g., calling card sellers) may not have been paying the wireless enhanced 911 fee, the imposition of Consumers Sales and Service Tax will effectively broaden the 911 fee base. However, with various wireless packages now available for less than $50 per month, the imposition of the sales tax at 6 percent may actually yield less revenue than the $3.00 per month wireless enhanced 911 fee. In such cases, there would be a loss to the General Revenue Fund.
    
    Additional administrative costs to the State Tax Department associated this bill would be minimal. The Public Service Commission may incur additional administrative costs due to passage of this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us