Date Requested:February 02, 2012
Time Requested:01:59 PM
Agency: Alcohol Beverage Control Administration
CBD Number: Version: Bill Number: Resolution Number:
2011R2766 Carry Over HB3178
CBD Subject: FUNDING FOR SUBSTANCE ABUSE
FUND(S)
7351
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.

    It is te WVABCA's understanding that the Tax Department will or should address the handling of issues with respect to increasing the Beer Barrel Tax from $5.50 to $11 and increasing the Wine
    Liter Tax from 26.406 cents to 52.812 cents.
    
    Remember taxes are likely passed on to the end consumer. Also regressive taxes may raise revenue but can have a
    secondary impact of decreasing volume and thereby negatively impacting overall revenue.
    
    With respect to language in W.Va. Code 60-3A-17, this language would essentially double the WVABCA's required transfers. In W.Va. Code 60-3A-17, section (b) uses the same language as in section (a) and this language has the practical effect of requiring the WVABCA to transfer the equivalent of what it transfers annually to General
    Revenue also annually to the Prevention Trust Fund.
    
    For FY 2011 the WVABCA transferred 13,000,000, in FY 2010 $12,150,000, in FY 2009 $14,800,000 and in FY 2008 $13,000,000 for an average of $ 13,237,500.
    
    This bill would require the WVABCA to establish wholesale prices to retail liquor outlets that would generate an additional $ 13,237,500 for a total transfer of $26,475,000.
    
    Raising prices on consumers using by such a high margin would likely have a negative impact on sales volume thus requiring an even greater rise in the markup for retail pricing to consumers in order to achieve the desired amount of $26,475,000 in revenue transfers.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 6,424,500 6,424,500 6,424,500
Personal Services 300,000 300,000 300,000
Current Expenses 5,824,500 5,824,500 5,824,500
Repairs and Alterations 0 0 0
Assets 300,000 300,000 300,000
Other 0 0 0
2. Estimated Total Revenues 13,237,500 13,237,500 13,237,500
3. Explanation of above estimates (including long-range effect):
    It is te WVABCA's understanding that the Tax Department will or should address the handling of issues with respect to increasing the Beer Barrel Tax from $5.50 to $11 and increasing the Wine Liter Tax from 26.406 cents to 52.812 cents.
    
    Remember taxes are likely passed on to the end consumer. Also regressive taxes may raise revenue but can have a secondary impact of decreasing volume and thereby negatively impacting overall revenue.
    
    With respect to language in W.Va. Code 60-3A-17, this language would essentially double the WVABCA's required transfers. In W.Va. Code 60-3A-17, section (b) uses the same language as in section (a) and this language has the practical effect of requiring the WVABCA to transfer the equivalent of what it transfers annually to General
    Revenue also annually to the Prevention Trust Fund.
    
    For FY 2011 the WVABCA transferred 13,000,000, in FY 2010 $12,150,000, in FY 2009 $14,800,000 and in FY 2008 $13,000,000 for an average of $ 13,237,500. The cost to generate this revenue would be $5,824,500 plus personnel and equipment costs (a rough guess of $600,000) to stock and deliver the liquor products assuming that volume would not decrease. However with higher prices there could be a drop off in volume.
    
    This bill would require the WVABCA to establish wholesale prices to retail liquor outlets that would generate an additional $ 13,237,500 for a total transfer of $26,475,000.
    
    Raising prices on consumers using by such a high margin would likely have a negative impact on sales volume thus requiring an even greater rise in the markup for retail pricing to consumers in order to achieve the desired amount of $26,475,000 in revenue transfers.


Memorandum
Person submitting Fiscal Note:
WVABCA General Counsel, Anoop Bhasin
Email Address:
Anoop.K.Bhasin@wv.gov
    It is te WVABCA's understanding that the Tax Department will or should address the handling of issues with respect to increasing the Beer Barrel Tax from $5.50 to $11 and increasing the Wine
    Liter Tax from 26.406 cents to 52.812 cents.
    
    Remember taxes are likely passed on to the end consumer. Also regressive taxes may raise revenue but can have a
    secondary impact of decreasing volume and thereby negatively impacting overall revenue.
    
    With respect to language in W.Va. Code 60-3A-17, this language would essentially double the WVABCA's required transfers. In W.Va. Code 60-3A-17, section (b) uses the same language as in section (a) and this language has the practical effect of requiring the WVABCA to transfer the equivalent of what it transfers annually to General
    Revenue also annually to the Prevention Trust Fund.
    
    For FY 2011 the WVABCA transferred 13,000,000, in FY 2010 $12,150,000, in FY 2009 $14,800,000 and in FY 2008 $13,000,000 for an average of $ 13,237,500.
    
    This bill would require the WVABCA to establish wholesale prices to retail liquor outlets that would generate an additional $ 13,237,500 for a total transfer of $26,475,000.
    
    Raising prices on consumers using by such a high margin would likely have a negative impact on sales volume thus requiring an even greater rise in the markup for retail pricing to consumers in order to achieve the desired amount of $26,475,000 in revenue transfers.