Date Requested:March 10, 2009
Time Requested:04:59 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2009R2191 Introduced HB3079
CBD Subject: MEDICINE FOR ANIMALS EXEMPT FROM SALES TAX
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 amend the definition of “health care provider” and “drug” for the purpose of consumers sales tax. This bill will exempt from the consumers sales tax drugs purchased by veterinarians to be dispensed upon prescription for the medical treatment of animals.
    
    According to our interpretation, the passage of this bill would expand the current exemption for prescription drugs to include the purchase of veterinary drugs by both veterinarians and consumers. Since the effective date of the bill is the date of passage, the additional loss to the General Revenue Fund would be roughly $250,000 in the current fiscal year. Thereafter, the additional loss would be up to $1 million per year.
    
    Additional administrative costs to the State Tax Department would be minimal.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
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 -250,000 -1,000,000 -1,000,000
3. Explanation of above estimates (including long-range effect):
    The stated purpose of this bill is to amend the definition of “health care provider” and “drug” for the purpose of consumers sales tax. This bill will exempt from the consumers sales tax drugs purchased by veterinarians to be dispensed upon prescription for the medical treatment of animals.
    
    According to our interpretation, the passage of this bill would expand the current exemption for prescription drugs to include the purchase of veterinary drugs by both veterinarians and consumers. Since the effective date of the bill is the date of passage, the additional loss to the General Revenue Fund would be roughly $250,000 in the current fiscal year. Thereafter, the additional loss would be up to $1 million per year.
    
    Additional administrative costs to the State Tax Department would be minimal.


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