Date Requested:January 20, 2011
Time Requested:03:36 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2081 Introduced HB2649
CBD Subject: FOOD TAX REDUCTION
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
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 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
3. 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