Date Requested:January 20, 2011
Time Requested:03:26 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1423 Introduced HB2662
CBD Subject: EXEMPTION FOR CHURCH HEATING OIL
FUND(S)
State Road Fund
Sources of Revenue
Other Fund State Road 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 exempt existing churches from paying a tax on propane and other heating oils used for the purpose of heating a church building.
    
    As written, we are unable to accurately estimate the loss to the State Road Fund from passage of this bill. This bill provides a refundable exemption from the variable rate component of the Motor Fuel Excise Tax on purchases of propane and other forms for heating oils by churches existing on July 1, 2010, to be used exclusively for heating church buildings. The bill is very broad in scope. It does not provide guidance as to what constitutes a “church building” (e.g., a gymnasium or business annex owned by the church), nor does it specifically define “other heating oils”.
    
    There would be no additional administrative costs to the Tax Department from the passage of this bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
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):
    As written, we are unable to accurately estimate the loss to the State Road Fund from passage of this bill. This bill provides a refundable exemption from the variable rate component of the Motor Fuel Excise Tax on purchases of propane and other forms for heating oils by churches existing on July 1, 2010, to be used exclusively for heating church buildings. The bill is very broad in scope. It does not provide guidance as to what constitutes a “church building” (e.g., a gymnasium or business annex owned by the church), nor does it specifically define “other heating oils”.
    
    There would be no additional administrative costs to the Tax Department from the passage of this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to exempt existing churches from paying a tax on propane and other heating oils used for the purpose of heating a church building.
    
    This bill provides a refundable exemption from the variable rate component of the Motor Fuel Excise Tax on purchases of propane and other forms for heating oils by churches existing on July 1, 2010, to be used exclusively for heating church buildings. The bill is very broad in scope. It does not provide guidance as to what constitutes a “church building” (e.g., a gymnasium or business annex owned by the church), nor does it specifically define “other heating oils”. In addition, there may be administrative difficulties because most of the substances considered as “heating oil” can serve a dual purpose. It maybe difficult to track whether the fuel is being used for an exempt purpose or non-exempt purpose.
    
    Also, this bill may have Constitutional problems. The proposed exemption would only apply to churches in existence on July 1, 2010, which would create a disparity in treatment of churches created after that date. This may violate Article X, Section 1 of the West Virginia Constitution, which provides that “taxation shall be equal and uniform throughout the State”.