Date Requested:March 24, 2009
Time Requested:10:55 AM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2009R1463 Amendment HB2722
CBD Subject: CASH REGISTER REPROGRAMMING CREDIT
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 $100 tax credit to certain businesses that are required to reprogram its cash registers because of a change in the sales tax rate imposed on the sale of food and food ingredients.
    
    As written, the bill would provide a credit of $100 to taxpayers engaging in business activities classified under the North American Industry Classification System with the first three- digits of 445 (supermarkets, grocery stores, convenience stores, and other food stores), with a six-digit code of 446110 (pharmacies and drug stores), and with a six-digit code of 447110 (gasoline stations with convenience stores) when the business is required to reprogram its cash registers because of a change in the sales tax rate imposed on the sale of food and food ingredients. However, the bill does not require that the above indicated activities be the primary business activity of the taxpayer. Thus, there is a potential for a broad interpretation of who might be eligible for the credit. An amendment to the bill makes the credit retroactive to January 1, 2006, but only for purposes of the Corporation Net Income Tax. Assuming that the retroactive provision of this bill would also extend to the Personal Income Tax, the potential revenue impact attributable to the rate changes that were effective January 1, 2006, July 1, 2007, and July 1, 2008 will likely result in a reduction in the General Revenue Fund of $750,000 to $1.5 million in Fiscal Year 2010. Additionally, passage of this bill may result in a reduction in the General Revenue Fund of up to $500,000 in periods following a change in the sales tax rate imposed on the sale of food and food ingredients.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill 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 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):
    The stated purpose of this bill is to provide a $100 tax credit to certain businesses that are required to reprogram its cash registers because of a change in the sales tax rate imposed on the sale of food and food ingredients.
    
    As written, the bill would provide a credit of $100 to taxpayers engaging in business activities classified under the North American Industry Classification System with the first three- digits of 445 (supermarkets, grocery stores, convenience stores, and other food stores), with a six-digit code of 446110 (pharmacies and drug stores), and with a six-digit code of 447110 (gasoline stations with convenience stores) when the business is required to reprogram its cash registers because of a change in the sales tax rate imposed on the sale of food and food ingredients. However, the bill does not require that the above indicated activities be the primary business activity of the taxpayer. Thus, there is a potential for a broad interpretation of who might be eligible for the credit. An amendment to the bill makes the credit retroactive to January 1, 2006, but only for purposes of the Corporation Net Income Tax. Assuming that the retroactive provision of this bill would also extend to the Personal Income Tax, the potential revenue impact attributable to the rate changes that were effective January 1, 2006, July 1, 2007, and July 1, 2008 will likely result in a reduction in the General Revenue Fund of $750,000 to $1.5 million in Fiscal Year 2010. Additionally, passage of this bill may result in a reduction in the General Revenue Fund of up to $500,000 in periods following a change in the sales tax rate imposed on the sale of food and food ingredients.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kpetry@tax.state.wv.us
    The stated purpose of this bill is to provide a $100 tax credit to certain businesses that are required to reprogram its cash registers because of a change in the sales tax rate imposed on the sale of food and food ingredients.
    
    While the bill, as drafted, appears to limit the credit to taxpayers engaging in business activities classified under the North American Industry Classification System with the first three- digits of 445 (supermarkets, grocery stores, convenience stores, and other food stores), with a six-digit code of 446110 (pharmacies and drug stores), and with a six-digit code of 447110 (gasoline stations with convenience stores), there is no provision requiring the listed activities to be the primary business activity of the taxpayer.
    
    An amendment to the bill makes the credit retroactive to January 1, 2006, for purposes of the Corporation Net Income Tax. However, the Personal Income Tax section was not amended.