Date Requested:February 07, 2011
Time Requested:04:51 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R2416 Introduced HB3027
CBD Subject: LEGALIZE FIREWORKS TO FUND FIRE DEPARTMENTS
FUND(S)
Volunteer Fire Department Fireworks Fund
Sources of Revenue
Special Fund
Legislation creates:
A New Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The stated purpose of this bill is to authorize the sale of prohibited fireworks; to require the sales tax on fireworks to be ten percent; and to establish a special fund that distributes the firework sales tax proceeds equally to each West Virginia volunteer fire department.
    
    As written, this bill would place a 10% sales tax on the sale of fireworks authorized by §29-3-24. The passage of this bill could result in annual revenue of between $1 million and $2 million for the “Volunteer Fire Department Fireworks Fund”.
    
    However, it should be noted that this bill would be in violation of the Streamlined Sales and Use Tax Agreement (SSUTA), of which West Virginia is a member state. The SSUTA restricts member states from having multiple state sales and use tax rates on property or services, with the exception of food and drugs.
    
    There would be a one-time administrative cost of $76,800 to the State Tax Department. Additional costs would be for programming changes and creation of tax returns necessary for this new tax on the sale of fireworks. Thereafter, there would be no additional administrative costs 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 76,800 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 76,800 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 authorize the sale of prohibited fireworks; to require the sales tax on fireworks to be ten percent; and to establish a special fund that distributes the firework sales tax proceeds equally to each West Virginia volunteer fire department.
    
    As written, this bill would place a 10% sales tax on the sale of fireworks authorized by §29-3-24. The passage of this bill could result in annual revenue of between $1 million and $2 million for the “Volunteer Fire Department Fireworks Fund”.
    
    However, it should be noted that this bill would be in violation of the Streamlined Sales and Use Tax Agreement (SSUTA), of which West Virginia is a member state. The SSUTA restricts member states from having multiple state sales and use tax rates on property or services, with the exception of food and drugs.
    
    There would be a one-time administrative cost of $76,800 to the State Tax Department. Additional costs would be for programming changes and creation of tax returns necessary for this new tax on the sale of fireworks. Thereafter, there would be no additional administrative costs 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 authorize the sale of prohibited fireworks; to require the sales tax on fireworks to be ten percent; and to establish a special fund that distributes the firework sales tax proceeds equally to each West Virginia volunteer fire department.
    
    The proposed bill would be in violation of the Streamlined Sales and Use Tax Agreement (SSUTA), of which W.Va. is a member state. The SSUTA restricts member states from having multiple state sales and use tax rates on property or services, with the exception of food and drugs. This bill proposes to have a higher sales tax rate on fireworks than other personal property or services.