Date Requested:February 08, 2012
Time Requested:02:30 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2012R2039 Introduced SB539
CBD Subject: WV TOURISM DEVELOPMENT ACT
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 amend the Tourism Development Act by adding a small scale tourism development component and credit to the Act; by removing the cap on the amount of annual credit that may be awarded for destination tourism expansion projects approved after June 30, 2012; by providing a rule for determining the amount of allowable credit when an approved project is a multi-year, multi-phase project, including a presumption that consumers sales and service tax is collected on calendar year basis; and by adding an ancillary tourism facilities development component and credit.
    
     As written, this bill proposes changes to the West Virginia Tourism Development Act and the embedded tax credit by increasing the expenditure to qualify for the tourism development project tax credit and tourism development expansion project tax credit components from $1 million to $2.5 million; establishing a small scale tourism development project tax credit for projects with approved costs in excess of $250,000 but less than $2.5 million; establishing an ancillary tourism facilities development project tax credit for projects with approved costs in excess of $100,000 but less than $1 million; establishing the application fees for the new components. The bill provides that the total amount of small scale tourism development project tax credit approved in any calendar year may not exceed $1.5 million and that the total amount of ancillary tourism facilities development project tax credit approved in any calendar year may not exceed $0.5 million.
    
     According to our interpretation and based on language in the bill, passage of this bill could result in an annual reduction in the General Revenue Fund of up to $2 million.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal. The Development Office may incur additional administrative costs due to passage of this bill.
    

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 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 -2,000,000 -2,000,000
3. Explanation of above estimates (including long-range effect):
     As written, this bill proposes changes to the West Virginia Tourism Development Act and the embedded tax credit by increasing the expenditure to qualify for the tourism development project tax credit and tourism development expansion project tax credit components from $1 million to $2.5 million; establishing a small scale tourism development project tax credit for projects with approved costs in excess of $250,000 but less than $2.5 million; establishing an ancillary tourism facilities development project tax credit for projects with approved costs in excess of $100,000 but less than $1 million; establishing the application fees for the new components. The bill provides that the total amount of small scale tourism development project tax credit approved in any calendar year may not exceed $1.5 million and that the total amount of ancillary tourism facilities development project tax credit approved in any calendar year may not exceed $0.5 million.
    
     According to our interpretation and based on language in the bill, passage of this bill could result in an annual reduction in the General Revenue Fund of up to $2 million.
    
     Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal. The Development Office may incur additional administrative costs due to passage of this bill.
    


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