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 reduce the Consumers Sales and Service Tax on food and food ingredients to 2%, beginning on January 1, 2012. As stated, the passage of this bill would reduce the Consumers Sales Tax on food for home consumption from 3 percent to 2 percent, beginning on January 1, 2012. The following table provides estimates of revenue loss to the General Revenue Fund. Fiscal Year 2013 represents the first full year effect of the rate reduction of the Consumers Sales Tax on food sold for home consumption. Sales of Food Meant for Home Consumption Only FY2012 -$11.0 million FY2013 -$26.0 million The aforementioned estimate for FY2012 was included in the Governor’s official revenue estimates for FY2012. Additional administrative costs to the State Tax Department would be $74,000 in FY2012 due to notifying taxpayers of the rate change and for programming changes.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 74,000 0
Personal Services 0 0 0
Current Expenses 0 48,000 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 26,000 0
2. Estimated Total Revenues 0 -11,000,000 -26,000,000


Explanation of above estimates (including long-range effect):


The stated purpose of this bill is to reduce the Consumers Sales and Service Tax on food and food ingredients to 2%, beginning on January 1, 2012. As stated, the passage of this bill would reduce the Consumers Sales Tax on food for home consumption from 3 percent to 2 percent, beginning on January 1, 2012. The following table provides estimates of revenue loss to the General Revenue Fund. Fiscal Year 2013 represents the first full year effect of the rate reduction of the Consumers Sales Tax on food sold for home consumption. Sales of Food Meant for Home Consumption Only FY2012 -$11.0 million FY2013 -$26.0 million The aforementioned estimate for FY2012 was included in the Governor’s official revenue estimates for FY2012. Additional administrative costs to the State Tax Department would be $74,000 in FY2012 due to notifying taxpayers of the rate change and for programming changes.



Memorandum






    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov