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 update code provisions to conform to the Streamlined Sales and Use Tax Agreement. The bill adds new definitions and clarifies present definitions. The bill incorporates changes to the Streamlined Sales and Use Tax Agreement and adds computer software maintenance contracts as a Streamlined Sales and Use Tax Agreement. The bill also relieves a seller of tax liability in certain instances. The bill provides new effective dates.
    
    As written, this bill will update West Virginia’s Sales and Use Tax Administration Law with the Streamlined Sales and Use Tax Agreement, as in effect prior to January 31, 2011. The bill clarifies administration of the sales and use tax by adding definitions for “computer software maintenance contract” (with further delineation of “mandatory computer software maintenance contract” and “optional computer maintenance contract”) and “delivered electronically.” The bill also adds a provision concerning the administration of exemptions. Generally, a seller is required to obtain an exemption certificate from a purchaser claiming an exemption from tax. For transactions for which the State Tax Commissioner requests substantiation of an exempt sale, the seller is relieved of any liability for the tax if the seller obtains the necessary supporting documentation, unless it is discovered that the seller had knowledge or had reason to know the information relating to the exemption was materially false. According to our interpretation, passage of this bill will have no impact on State revenue.
    
    Additional administrative costs to the State Tax Department associated with this bill will be minimal.
    



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 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


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


    As written, this bill will update West Virginia’s Sales and Use Tax Administration Law with the Streamlined Sales and Use Tax Agreement, as in effect prior to January 31, 2011. The bill clarifies administration of the sales and use tax by adding definitions for “computer software maintenance contract” (with further delineation of “mandatory computer software maintenance contract” and “optional computer maintenance contract”) and “delivered electronically.” The bill also adds a provision concerning the administration of exemptions. Generally, a seller is required to obtain an exemption certificate from a purchaser claiming an exemption from tax. For transactions for which the State Tax Commissioner requests substantiation of an exempt sale, the seller is relieved of any liability for the tax if the seller obtains the necessary supporting documentation, unless it is discovered that the seller had knowledge or had reason to know the information relating to the exemption was materially false. According to our interpretation, passage of this bill will have no impact on State revenue.
    
    Additional administrative costs to the State Tax Department associated with this bill will be minimal.
    



Memorandum


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